Indian fund managers are again under pressure. Amid global turmoil and persistent fear of redemptions from domestic retail investors, fund houses are playing safe by increasing their cash holdings in equity schemes.Though the overall cash level till July is not available, equity experts say cash holdings are on the rise.
According to fund managers Business Standard spoke to, cash exposure in some cases could be as high as 10-12 per cent.
The Bombay Stock Exchange's benchmark Sensex, since its earlier peak in November last year, has lost close to 20 per cent of its value till date.
Top equity schemes show negative returns of as high as 25 per cent in the current calendar year.
Last year in September, when Indian markets rallied, fund managers chose to keep little cash and deployed a larger chunk of funds.
The current cash holding among industry players is piling up again. Fund tracker Value Research says a majority of the top fund houses increased their cash levels during the quarter ended June 30, compared with September last year.
Dhruva Raj Chatterji, senior research analyst at Morningstar India, says:
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