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5 Cash-Heavy Funds for the Cautious Investor

Cash is not trash.

Following up on my theme of downside protection, I've gathered a few funds with big cash stakes that you might want to give a second look.

Funds with big cash stakes can lag in rallies, but I wouldn't pull the trigger on a good fund just for a bit of a slump. Funds with big cash stakes can do wonders in a downturn. But it goes beyond the cash stake itself.

Cash holders have an extra level of choosiness about their stocks and a wariness of losses that is reflected in the way the rest of the portfolio is run. It also is something that can be put to use in sell-offs, though I wouldn't go so far as to expect these managers to time their purchases perfectly.

Wally Weitz lives in Omaha, Nebraska, and he tries to invest like fellow Omahan Warren Buffett. So, it's no surprise that

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About the Author

Russel Kinnel

Director
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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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