Are top managers moving into cash?

The Equinox call center has received many calls over the last two weeks from nervous investors wanting to know what we think of recent volatile market conditions. As administrators we are not permitted to give advice to individual investors, as we are not in a position to evaluate clients' total assets, liabilities and investment objectives.

However, we are permitted to give our clients information on which they can base their own investment decisions. We can use our records to produce the information required, or canvas the opinions of fund managers and other investment experts on any given topic.

So are the top fund managers moving into cash? The records suggest that judging by the absolute percentages invested in cash, as well as fairly directionless trends, that fund managers are not substantially increasing cash holdings.

The figures below are the total cash (or cash proxy) holdings for leading funds over the last three quarters. Of course, this information would be fairly dated by now, as the cash holdings in the first column reflect the cash holdings of portfolios as at the end of September. They do however, give an indication of fund manager anxiety (or lack of it) as of the end of September.

Leading General Equity fund managers' cash holdings (or cash proxy) over three quarters

Some general equity fund managers are mandated to be fully invested in equities, so even if there were signs of market weakness, the would not necessarily be permitted to increase their cash holdings.

However, managers of balanced funds have the mandate to invest for best effect across a range of asset types.

Leading Prudential Fund (Medium Equity) cash holdings (or cash proxy) over three quarters