Managers increase cash as 'market chaos' fears grow

Investment managers across the asset class spectrum have been raising cash allocations on fears of an equity market correction and a fresh bond market ‘taper tantrum'.

The latest Global Fund Manager Survey by Bank of America Merrill Lynch revealed fund managers and asset allocators are holding their highest cash allocations in 10 months, with global cash holdings jumping to a net 23% overweight in May, from just a 7% overweight the previous month.  Meanwhile, allocations to US equities have slumped to the lowest level since 2008 as the S&P 500 index reached an all-time high. RWC's Ian Lance and Nick Purves are among managers using their cash holdings in the view markets are overvalued: the Enhanced Income fund has 20% in cash, and the Global Enhance...