Why Is Sunil Singhania-Backed Abakkus Flexi Cap Fund Sitting on 80% Cash in Its First Portfolio?
The first portfolio disclosure of the newly launched Abakkus Flexi Cap Fund, backed by veteran investor Sunil Singhania, is drawing attention across Dalal Street for an unusual reason: caution. Despite a successful new fund offer (NFO) that mobilised nearly ₹2,500 crore, the fund has chosen to deploy only a small portion into equities, keeping over 80 percent of assets parked in cash and cash equivalents.
The disclosure for December 31, 2025, suggests that the fund’s strategy is not driven by urgency to chase markets but by patience and valuation discipline — a signal that many investors and traders are now trying to interpret.
Abakkus Flexi Cap Fund Reveals Highly Conservative Starting Position
According to its first official portfolio disclosure, the Abakkus Flexi Cap Fund managed assets worth ₹2,492.97 crore at the end of December, shortly after its NFO closed on December 22, 2025.
The asset allocation reveals a striking stance:
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Equity investments stood at ₹479.96 crore, or 19.24% of net assets
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₹1,998.59 crore, or 80.17%, was invested in reverse repo and TREPS
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Net receivables accounted for 0.59% of assets
Such a high cash allocation in a flexi-cap fund’s early days is uncommon and is widely being interpreted as a deliberate call on market valuations rather than a lack of conviction.
Banking Stocks Dominate the Initial Equity Allocation
Within the limited equity exposure that the fund has taken, financial stocks clearly dominate. HDFC Bank emerged as the single largest holding at 2.78% of net assets, followed closely by ICICI Bank at 2.42%.
Other banking names included:
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State Bank of India at 1.69%
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Federal Bank at 1.47%
This early positioning suggests that the investment team sees relative value in select banking franchises even while maintaining caution on broader market levels.
Portfolio Shows Diversification Beyond Financials
Outside financials, the portfolio reflects a gradual, diversified build-up across sectors rather than aggressive sectoral bets.
Notable holdings include:
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United Spirits at 1.59%, indicating exposure to consumption
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Larsen & Toubro at 1.47%, reflecting confidence in infrastructure
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Vedanta at 1.45% and Tata Steel at 0.72%, offering metals exposure
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NTPC at 0.93%, providing stability through power utilities
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Oracle Financial Services Software at 1.39%, adding technology exposure
Interestingly, the fund has also taken a small position in Urban Company (0.96%), reflecting selective exposure to emerging business models. Other smaller allocations to companies such as Inox India, Heritage Foods, Deepak Fertilisers, Supriya Lifescience and Emmvee Photovoltaic Power indicate a gradual bottom-up approach across market capitalisations.
There was no exposure to unlisted equities as of the end of December.
What the High Cash Allocation Really Signals to Investors
While the fund carries the brand of Sunil Singhania, it is managed by Sanjay Doshi, Head of Investments and Research at Abakkus Mutual Fund, along with the broader investment team. The strategy appears clear: preserve flexibility in the early phase rather than rush capital into expensive markets.
Market participants interpret the large cash buffer as a signal that the team may be waiting for:
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Better valuation comfort in mid- and small-cap stocks
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Greater clarity on global interest rate trajectory
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Correction-driven opportunities in quality companies
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Market volatility that offers more attractive entry points
For long-term investors, this approach may resonate with those who value capital protection alongside upside potential.
Here’s What Happened Today and Why Traders Reacted
The portfolio disclosure sparked discussion more than price action. While there was no broad market movement triggered by the news, it influenced sentiment in pockets.
Here’s how traders reacted:
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HDFC Bank and ICICI Bank saw mild buying interest as investors noted institutional preference
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AMC-related stocks remained stable, with the market treating this as a stock-specific development
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Small-cap counters mentioned in the portfolio saw brief attention but no speculative frenzy
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Broader indices remained rangebound, indicating that the market viewed this as an informational trigger, not a directional one
For professional traders, the takeaway was subtle: a respected investment house is choosing patience over aggression.
What This Means for Traders in the Coming Sessions
Short-term traders are unlikely to act directly on this disclosure, but many will track future monthly portfolios for signals.
Key cues traders may watch going forward include:
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Speed of equity deployment in upcoming months
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Increase in exposure to mid- and small-cap stocks
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Sectoral themes emerging within the portfolio
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Whether cash levels decline as market corrections unfold
A gradual rise in deployment could become a sentiment indicator for broader market confidence.
How This Development Impacts Investor Portfolios
For investors who have invested in the NFO, the message is clear: this is not a momentum-chasing fund. It is shaping up to be a patient, valuation-driven strategy.
Portfolio implications include:
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Lower near-term volatility due to high cash exposure
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Potentially slower initial returns if markets rally sharply
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Higher flexibility to capture opportunities during corrections
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Reduced downside risk if markets remain volatile
For investors considering allocation to flexi-cap funds, this disclosure reinforces the importance of understanding fund strategy, not just brand value.
A Cautious Start That Reflects Discipline, Not Hesitation
In a market environment where many fund managers feel pressured to stay fully invested, the Abakkus Flexi Cap Fund’s first disclosure stands out. Holding more than 80 percent in liquid instruments is not a lack of conviction — it is a statement of discipline.
For seasoned investors, this is a reminder that sometimes the most powerful investment decision is not what you buy, but when you choose to wait.
As future disclosures reveal how this cash is deployed, market participants will continue to watch this fund closely — not just for performance, but for the signals it sends about market valuations themselves.
