MFs Sitting On Vast Cash Position

Sensing a purchasing opportunity following the recent fall in stock prices, most mutual fund houses have increased the cash levels of their top schemes by up to 50 per cent of the total corpus during the last one-and-a-half month. Most of the top performing equity mutual fund schemes have an average cash level of 15%, which is almost thrice the normal level maintained by them. Some schemes are even sitting on cash of up to 50% of their corpus. Reliance Mutual Fund's Long Term Equity fund, Prudential ICICI's Equity and Derivatives Fund and SBI's Magnum Global are some of the funds which are currently sitting on huge cash. Mutual funds bought equities worth a total of Rs 12,697.09 crore in February 2007 and sold equities worth Rs 12,971.14 crore, becoming net sellers of Rs 274.05 crore. This month, the funds have sold equities worth Rs 5,231.63 crore till 12 March 2007, while buying was restricted to Rs 4,362.35 crore. They have been net sellers of Rs 869.28 crore.