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."

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