InvestorQ : In this market, will it make sense to focus more on companies that are sitting on cash rather than being invested?
Riya Dwivedi made post

In this market, will it make sense to focus more on companies that are sitting on cash rather than being invested?

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rhea Babu answered.
1 year ago
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Frankly, holding cash is not a great idea because you need the fund to be fully invested at all times. You can hold cash yourself. Some cash is fine but I have seen some funds holding 15-20% in cash. That is absolutely a waste of opportunities and letting them go begging. Equity funds can hold cash between 1% and 5% of a fund’s corpus depending on the circumstances. You should still prefer a fund that uses sharp corrections in the market to churn the portfolio and reallocate than just sit on cash. It is not the job of a mutual fund to try and catch a bottom. It should focus on reallocation and right allocation.

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