Huge cash in equity schemes near fund houses: waiting for the right opportunity

Mumbai, Ta. December 17, 2019, Tuesday

The sharp decline in equity falls in November may be a relief for some fund managers, especially the mid and small cap fund managers. In this segment, more than a dozen equity schemes hold on average seven per cent of cash. Fund houses are waiting for the right opportunity to invest the money under the scheme in which the investor is coming.

Some mid-cap and small-cap schemes have received good response from investors, in which case fund managers have also been selective. Fund managers are waiting for real time to prevent cash available, said an analyst.

Index stocks and quality mid-cap stocks are currently running exponentially despite correction in the market. Last year, Nifty mid-caps were speaking at a higher premium than Nifty, while at the current year, they are running at a great discount, a fund manager said.

At present, there is also the risk of money being stuck in falling stocks. Disruptions are currently taking place in some trade sectors in the country.

Seven percent of the falls in small cap schemes are cash-on-hand, while in mid-cap schemes this figure is around five percent. In large caps schemes, cash is also increasing.

Large caps schemes usually focus on bluechip stocks. In November, equity flows fell 5 per cent to a half-year low of Rs 5 crore.