Cash holdings with the top 20 mutual fund (MF) houses dropped to a 10-month low of 5 per cent in March as fund managers decided on equities, with the benchmark equities falling to their lowest levels in five months in early March.

According to a note by Motilal Oswal Financial Services (MOFSL), cash holdings as of end-February were at 6.2 per cent — the highest since May 2021.

“Equity market valuations are more reasonable today than they were in March last year. Consequently, we have lowered the cash component across most schemes,” said Anish Tawakley, deputy chief investment officer-equity and head of research, ICICI Prudential Asset Management Company (AMC).

The benchmark S&P BSE Sensex had slipped to as low as 57,085, while the National Stock Exchange Nifty stumbled below 17,000 in March in the midst of a sell-off in global equities instigated by the banking maelstrom in the US and Europe.

“Cash lyin