More and more fund managers are keeping their powder dry. Cash positions rose to 5.7 percent in June from 5.5 percent in May, the highest level we've seen since November 2001, according to a Bank of America Merrill Lynch survey released last week.
Cash allocations spiked after 9/11, then fell back through 2007. But even when they rose again at the time of the collapse of Bear Stearns and Lehman Brothers in September 2008, cash holdings still only reached about 5.5 percent, below their recent peak. More recently, managers have been raising their cash positions pretty steadily since 2013.
One theory is that managers are holding back until they see what happens with Brexit - the potential British exit from the European Union. That vote is slated to occur on Thursday of this week.