Bloomberg is looking at the high cash levels across the universe of fixed income funds this morning…
Mutual funds in the U.S. that focus on bonds have the highest percentage of their assets in cash since 2008, which may temper a rise in yields from about record lows as managers put that money to work.
Managers are sitting on about $243 billion of cash and short-term securities, or about 9.79 percent of assets, after investors plowed $90 billion into taxable bond funds this year, according to Morningstar Inc. and the Investment Company Institute in Washington. That’s up from 9.1 percent last year and above the average of 8.43 percent in the decade ended 2010.
As a for instance, Doubleline‘s widely-followed Jeffrey Gundlach is sitting with a ten percent cash position, five times the norm. He thinks asset prices are coming down. Gundlach’s running $8.5 billion in his relatively new flagship bond fund and beat 99% of his peers last year, worth paying attention to.