Cash in Equity Mutual Funds: What the Cash Line Means
An equity fund rarely has all its money in shares. The rest sits in cash and short-term paper, and how much of it there is says something about the fund.
By Rithick G · updated 26 October 2026
What counts as cash
In a portfolio disclosure, the lines that are not shares are mostly ways of holding cash. This site adds them up as cash & debt:
- TREPS and reverse repo: overnight lending against government securities. Most funds park their day-to-day cash here.
- Net receivables / payables: money owed to or by the fund, such as sales not yet settled or redemptions not yet paid.
- Money-market paper: treasury bills, certificates of deposit, commercial paper.
- Bonds and debentures: rare in an equity fund, more common in older or multi-asset schemes.
Fund pages also show cash alone (cash and net receivables) next to the wider figure.
Why a fund holds cash
- Redemptions: investors can sell any day, and the fund pays out in a day or two. A few percent in cash avoids selling shares for every withdrawal.
- Money arriving: a large inflow, a new fund offer or a lump of SIP money takes days or weeks to invest.
- Between trades: after selling one stock and before buying the next.
- A view on the market: some managers hold more cash when they find shares expensive. Category rules cap how far this can go: most equity categories must keep at least 65% to 80% in shares.
Why cash can be negative
When a fund owes more than it holds in cash, the net figure drops below zero. This happens with purchases not yet paid for, redemptions due, and especially derivative positions: a fund holding index futures carries the cash for them on its books, and the disclosure can show large negative payables against the futures. The futures themselves are left out of this site’s totals, so a fund using them can show unusual cash figures for that month.
What is typical
| Category | Funds | Stocks held | In top 10 | Cash & debt |
|---|---|---|---|---|
| Large Cap | 35 | 54 | 47.1% | 2.0% |
| Large & Mid Cap | 35 | 69 | 32.1% | 2.4% |
| Mid Cap | 33 | 70 | 27.7% | 2.9% |
| Small Cap | 36 | 84 | 26.1% | 4.4% |
| Flexi Cap | 44 | 67 | 35.8% | 3.0% |
| Multi Cap | 32 | 78 | 27.3% | 4.2% |
| ELSS (tax saving) | 48 | 53 | 41.8% | 3.4% |
| Focused | 26 | 29 | 50.8% | 4.2% |
| Value / Contra | 28 | 60 | 39.0% | 4.6% |
| Dividend Yield | 10 | 56 | 37.2% | 3.0% |
| Sectoral / Thematic | 235 | 43 | 46.8% | 3.0% |
Of the funds of ₹1,000 crore or more, 17 hold 10% or more in cash and debt. Index funds and ETFs, which are not covered here, typically hold almost none.
How to read a change
- A rise can be a manager getting cautious, but it is just as often a big inflow not yet invested, or shares sold just before month end. One month is not a call on the market; a rise that lasts several months is more telling.
- A fall usually means the fund has put money to work, or redemptions have drawn the cash down.
- Compare with peers. Each fund page ranks the fund’s cash against its category and charts its cash share month by month.
Cash softens falls and trails rises, so a fund that keeps a lot of it will usually lag a rising market and hold up better in a falling one. The portfolio guide covers the other non-share lines a disclosure lists.