Why is a mutual fund holding 50% in TREPS?

General
1

I noticed a recently NFO’d fund ICICI Prudential Flexicap fund holding more than 50% funds in TREPS.

What is the reason for holding 50% in TREPS? I assumed most of the capital collected would be deployed by the time the mutual fund is listed.

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2

@nithin or @siva can anyone shed some light on this?

3

@Bhuvan Can you.

4

It’s a new fund and it had raised almost Rs 10,000 crores. Given the amount, it takes time to deploy the entire corpus, which means the undeployed funds will be held in cash. TREPS is a cash equivalent.

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5

Is there a timeframe by which they should deploy all the funds?

6

Sooner the better, in short :slight_smile: But regulatorily, I’m not sure. The AMCs usually try to do it soon because cash is a drag on the performance.

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7

Oh alright! Thank you for the information! :grimacing: