PMS cash holdings decline in June as market sentiment improves

Cash holdings of several PMS schemes saw a decline in June against May as the market rallied even as uncertainty due to rising COVID-19 cases and a spike in geopolitical tensions persisted.

In normal circumstances, a decline in cash holdings in PMS strategies indicates that the market is attractive for investment at the juncture. On the contrary, when the market is volatile or if there is strong uncertainty in the market, PMS strategies prefer to increase cash holding to minimise the risk of losses.

Out of the total 133 strategies that disclosed cash for both May and June 2020, there were 58 strategies that reduced cash in June while there were 41 strategies that increased cash.

As many as 34 strategies maintained the same level of cash in May and June.

In May, as many as 144 strategies disclosed cash, out of which 2 held more than 50 percent in cash. In June, 142 strategies disclosed cash out of which 1 held more than 50 percent in cash.

As many as 4 strategies, including Indian Multi Asset, Life Sciences and Speciality Opportunities, MNC Advantage and PE Fund, had at least 40 percent or above cash holding in the month of June.