Flexi Cap Fund Cut Cash 40%: Is Your SIP Safer Now?

One of India's most-watched flexi cap funds has sharply reduced its cash holdings, signalling that its fund managers now see better value in the stock market. Here's what that means for your SIP returns.

Here's what happened: A leading flexi cap fund reduced its cash allocation from a peak of around 25% to roughly 14-15%, deploying capital into equities.. The fund's CIO indicated that the outlook for future returns has improved, suggesting valuations are looking more attractive than they were.. Flexi cap funds are permitted by SEBI to invest across large, mid, and small-cap stocks with no fixed allocation — cash management is part of their active strategy..

What you should do: Check your flexi cap fund's latest monthly factsheet on AMFI or the fund house website — look for 'cash & equivalents' in the portfolio allocation.. Compare the fund's 1-year and 3-year rolling returns against its benchmark to judge whether the active cash strategy has actually added value for you.. Avoid stopping your SIP based on a fund manager's cash movements — systematic investing works best when you stay invested through the manager's full market cycle..

A fund holding high cash during a rally will underperform — but it also falls less in a crash. Before judging 'underperformance', always compare against the fund's own benchmark, not Nifty 50.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.