Cash Levels in Mutual Funds Are Near Cycle Lows

Everyone is talking about FII flows. Very few are looking at how much cash domestic fund managers are holding. Many equity mutual funds are running with relatively low cash positions, which means a large part of the money is already deployed. If markets correct, fund managers may have limited dry powder, but any fresh SIP inflows could quickly find their way into stocks. Large-cap names such as $HDFCBANK , $RELIANCE , $ICICIBANK and $BHARTIARTL could remain key beneficiaries of continued domestic inflows.