Cash strapped fund managers look but can't buy
This sh1t cracks me up.......Like crack heads, buy, buy ,buy. Reminds me of when a husband pulls the wife's credit card for being irresponsible.
Just looking
Cash-strapped fund managers browse but can't buy
By Jonathan Burton, CBS.MarketWatch.com
Last Update: 4:55 AM ET Feb. 8, 2003
NEW YORK (CBS.MW) -- A majority of mutual fund managers worldwide are favoring U.S. stocks over non-U.S. equities for the first time in months. That's the good news out of a closely watched Merrill Lynch survey of global fund managers.
Trouble is, managers are short on cash to buy stocks in the U.S. -- or anywhere, for that matter. With cash on hand averaging just 4.8 percent and shareholders fleeing for the perceived safety of bonds and money markets, equity-fund managers hoping for a shopping spree can look but not touch.
"Managers are sure the market is cheap, but cash is not coming in," Sarah Franks, a Merrill strategy analyst, said about the firm's monthly polling of more than 70 managers, released Tuesday. "It's hard to shop for bargains when you don't have anything in your wallet."
A global liquidity crunch suggests that an upturn in U.S. stock prices is unlikely, Franks said, regardless of fund managers' optimism. Previous buy signals have hinged on managers believing equities are attractive at the same time they hold plenty of cash, she added.
Managers usually reserve a modest amount of cash in their portfolios for opportunistic bargain hunting and, importantly, to handle shareholder redemptions without being forced to unload securities. Cash positions among funds typically hover closer to 6 percent, Franks explained, and reached 7.5 percent in October 2001 just prior to a short-lived but powerful rally. Comparable conditions were present last October as well, she observed, with similarly positive results. Supporting evidence also indicates that such bullish circumstances don't exist now. See full story.
"Perhaps," Franks said, "this isn't the most profitable time for equities."
New funds for emerging markets
An index fund for U.S. investors to buy a basket of South African stocks launched Friday on the American Stock Exchange.
The iShares MSCI South Africa Exchange-Traded Fund (EZA: news, chart, profile) offers exposure to a Morgan Stanley Capital International index of South African equities. In its first trading day, the fund slipped 24 cents to close at $39.08.
South Africa finished among the best-performing international markets in 2002, up 28 percent. Top holdings in the market-capitalization weighted MSCI South Africa Index include metals and mining company Anglo American Corp., the largest position at 28 percent, oil and gas concern Sasol, representing 8 percent, and investment manager Old Mutual, at 7 percent, according to MSCI.
Barclays Global Investors manages the iShares South Africa fund. The San Francisco-based asset management giant oversees a broad array of U.S. and international exchange-traded funds listed under the iShares name.
ETFs are index funds that are bought and sold like common stocks. Like many traditional index funds, ETFs feature below-average management fees and portfolio turnover.
Separately, BGI is awaiting regulatory approval for a recently proposed China ETF intended to track the FTSE/Xinhua China 25 Index of large-cap Chinese stocks. Lee Kranefuss, head of BGI's individual investor business, said the firm also is considering an ETF that would consolidate several emerging markets into one fund.
Jonathan Burton covers the mutual fund industry for CBS MarketWatch.com |
