Mutual fund managers are still skittish about the markets, as evidenced by an increase in cash. A Merrill Lynch survey early this month revealed that 19% of all managers and 23% of asset allocators describe themselves as "overweight" in cash, the Associated Press reports.

"We are seeing a lot of managers, especially those for whom valuation is really important 1/4 build up cash stakes that are higher than historical averages," said Todd Trubey, a mutual fund analyst at Morningstar. "It's something we are seeing some very good managers do right now."

The higher liquidity indicates risk aversion that seemingly contradicts managers' confidence in global growth and expectations of growth in corporate profits, according to Merrill Lynch. However, the caution may be driven by uncertainty regarding inflation and companies' inability to raise prices.

Furthermore, value-oriented investments have been in short supply, causing a lot of money managers to sit on cash waiting for better buying opportunities.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.