Value fund managers who have once again fallen out of favor are now accumulating conspicuous amounts of cash in their portfolios, TheStreet.com reports.
While growth funds are doubling down on equity bets in the current bullish market environment, cash holdings have grown to 36% of the FPA Capital Funds total portfolio and could very well rise higher in 2005.
Don Yacktman, who oversees the value-driven Yacktman fund, attests that undervalued stocks are in short supply. Slightly more than 20% of the Yacktman funds holdings is currently in cash positions. Longleaf Partners fund and the Clipper fund also maintain cash positions exceeding 20% of their total portfolios.
Bulging cash allocations in value fund portfolios are expected to rankle investors who fear being sidelined during the next market upturn. Investors are also likely to grouse about management fees while a sizeable portion of their assets are out of the market.