They Read Markets Well and Sits on Cash, Buying on Dips

#PPFAS, Motilal Oswal, and Quant Mutual Funds lead cash holdings for March 2025

Mumbai: For the month of March, the largest cash holdings were seen in funds owned by major fund houses like PPFAS Mutual Fund (21.9%), Motilal Oswal Mutual Fund (17.8%), and Quant Mutual Fund (10.3%), according to a latest report by Motilal Oswal. On the other hand, the lower cash holdings ( amongst the top 20 funds) were seen in Mirae Asset Mutual Fund (1.3 percent) and Kotak Mahindra Mutual Fund (2.5 percent).

According to the report, the total equity value of the top 20 AMCs was up 7.5 percent MoM ( around 23.5 percent YoY) in March 2025. Among the Top 10 funds, the highest MoM increase was seen in Nippon India Mutual Fund (9.6 percent), Axis Mutual Fund (8.3 percent), Kotak Mahindra Mutual Fund (8 percent), DSP Mutual Fund (7.8 percent), and UTI Mutual Fund (7.5 percent)

For the month, mutual funds were buyers in 52 percent of stocks in the Nifty 50 with highest MoM net buying in in Jio Financial (18 percent), Tata Consumer (12.8 percent), Eternal/ Zomato (10.2 percent), and Bajaj Finserv (7.5 percent). In the Nifty Midcap 100, they were net buyers in 53 percent of stocks and Nifty Smallcap 100, they were net buyers in nearly 73 percent of the stocks.

In 2025
The Indian mutual fund (MF) industry closed FY25 with a 23 percent year-on-year (YoY) increase in total assets under management (AUM), surging by Rs 12.3 lakh crore to reach Rs 65.7 lakh crore, according to the fund folio report. This growth was largely driven by the performance of equity funds (Rs 66,600 crore), alongside liquid funds (Rs 15,800 crore), other exchange-traded funds (ETFs) (Rs 11,560 crore), balanced funds (Rs 10,960 crore), and income funds (Rs 9,330 crore).

According to the report, investor contributions to systematic investment plans (SIPs) also witnessed a significant uptick, with inflows totaling Rs 25,930 crore in March 2025, a 34.5 percent YoY growth despite a 0.3 percent month-on-month (MoM) decline.

A major trend in FY2025 according to the report was a strategic shift in sector allocations within equity funds. The weight of defensive sectors increased by 30 basis points to 29.7%, driven by higher exposure to Telecom and Healthcare. Healthcare, in particular, saw a 20 basis points rise in weight to 7.6%, moving it into the fourth position from fifth place in FY24. On the other hand, Technology, while holding onto its ranking in portfolios, experienced a 20 basis points decline in its weight to 8.5%.

The report added that domestic cyclicals have continued to be an important part in portfolio construction, with their weight increasing by 30 basis points to 61.5 percent. This increase was driven by higher allocations to private banks, retail, insurance, real estate, infrastructure, and cement. Private Banks saw the largest increase, with their weight rising by 150bps to 18.4%. On the other hand, PSU Banks saw a reduction in their weight, falling by 60bps to 2.8 percent.

On the other hand, the report noted that global cyclicals, particularly Oil & Gas, faced headwinds in FY25, with their combined weight declining by 70 basis points to 8.7 percent. The decline was largely attributed to uncertainties around global energy prices and the broader challenges facing the sector, such as the push for cleaner energy sources.