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Small and mid-cap equity MFs raise cash-holdings

Average cash-holding in September about 8%

Sneha Padiyath Mumbai
Last Updated : Nov 14 2013 | 11:24 AM IST
Equity mutual funds investing in small and mid-cap stocks have increased their cash exposure by over 4% since the beginning of this year. 
 
According to data compiled by mutual fund tracker, Morningstar, the average cash-holding of these funds touched 7.39% in the September quarter. The average cash-holding in these funds stood at 3.73% in December 2012. The highest rise in cash exposure was seen in the March 2013 quarter, with the cash-holding almost doubling to 6.39%. 
 
Fund analysts attributed the rise in cash-holding to volatile equity markets and the poor performance of the mid and small-cap equities. Since the beginning of the year, the BSE Mid-Cap index was down about 22% while the BSE Small-Cap index was down 26%.
 
All Escort equity mutual fund schemes had a cash exposure of more than 15% as on September 2013. In most cases, equity funds with lower asset bases have relatively high cash exposures, with IDFC Premier Equity fund being a rare exception, which held 15% exposure in CBLO at the end of September 2013, a report by Morningstar noted.

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First Published: Nov 14 2013 | 11:21 AM IST

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