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Waiting to Cash-in

Fund houses have preferred to sit on cash, rather than invest it in June

The markets have been rising, albeit in a very volatile manner, and concerns were voiced starting March that mutual fund managers have missed the bus as far as the current market rally was concerned as they were sitting on their cash, rather than investing it.

The position looks to be the same even today. Cash positions maintained by different mutual fund houses in their open ended equity category have not undergone any drastic change, if one takes a look at the figures between May-June, 2009.

Fund houses have kept 9.1 per cent of their assets in open-ended equity funds in cash in June, while it was almost the same at 9.4 per cent in May this year. However, there were some drastic falls that took place in some of the fund houses.

A look at the cash position of ICICI Prudential Mutual Fund shows that there was a total of Rs 1,282 crore in June in comparison to Rs 2,160 crore in May – a dip of Rs 878 crore. In one of its funds, ICICI Pru Infrastructure, a fall in cash holdings to the tune of 1,263 crore was recorded in June.

SBI Mutual Fund, whose cash positions stood at a Rs 1,203 crore in May, fell into negative territory at (-)Rs 6.65 crore in June, a fall of Rs 1,209 crore.

IDFC Mutual Fund recorded an increase of Rs 359 crore in its cash position in June when cash holdings soared to Rs 427 crore in comparison to Rs 68 crore in May. This was mainly caused due to increase in cash position in the assets of IDFC Enterprise Equity Fund, which got converted into an open-ended fund in June and increased its cash holdings to Rs 280 crore.

HDFC Mutual Fund almost doubled its assets cash component from Rs 479 crore in May to Rs 926 crore in June.

That a majority of fund managers have looked to sit and wait in June is clear from the fact that 17 fund houses have increased their cash holdings in June, while 16 have gone the other way round.

Cash Position: Top Equity Fund Houses
  Jun-09  May-09
Fund House  Cash (Rs Cr)  Cash (%)  Cash (Rs Cr)  Cash (%)
Reliance Mutual Fund 4462.61 15.77 4572.32 15.95
HDFC Mutual Fund 926.00 7.41 479.85 4.00
UTI Mutual Fund 1054.57 8.69 1278.73 10.60
SBI Mutual Fund -6.65 -0.06 1203.10 10.09
Franklin Templeton Mutual Fund 778.42 7.03 524.62 4.71
DSP BlackRock Mutual Fund 842.40 8.16 532.87 5.02
ICICI Prudential Mutual Fund 1282.11 12.64 2160.19 22.80
Birla Sun Life Mutual Fund 565.98 8.29 305.49 5.30
Sundaram BNP Paribas Mutual Fund 144.10 2.51 182.86 3.08
Tata Mutual Fund 273.91 6.79 174.26 4.29

Movers and Shakers: Schemes
  Jun-09  May-09  
Scheme  Cash (%)  Cash (Cr)  Cash (%)  Cash (Cr)  Change (Cr)
Top 5          
IDFC Enterprise Equity Plan A 31.49 280.27 -3.30 -32.79 313.07
HDFC Top 200 10.29 379.61 3.04 100.76 278.85
UTI Top 100 24.76 168.01 7.81 39.59 128.41
DSPBR T.I.G.E.R. Reg 11.54 383.18 7.50 257.52 125.66
Reliance Long Term Equity 24.60 473.06 18.42 355.38 117.68
Bottom 5          
ICICI Prudential Infrastructure 9.08 348.87 42.99 1612.15 -1263.28
Magnum Taxgain -0.31 -12.70 9.23 374.12 -386.81
Magnum Contra 0.18 4.81 9.61 258.49 -253.68
Magnum Global -1.26 -13.70 15.38 171.79 -185.48
Reliance Growth 14.97 774.14 17.45 913.57 -139.43