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5 Funds Buck the Trend and Hoard Cash

Not everyone thinks cash is trash.

This article was originally published in the April 2017 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor here.

This far into a bull market, cash is unappealing. It's too hard for cash-heavy funds to keep pace with cashless indexes.

But, of course, that's some of its appeal. Cash provides defense, and it's dry powder to put to use in a down market. There are five Morningstar Medalists with big cash positions worth noting. Most funds with big cash stakes today hold a lot of cash most of the time.

Seeing so many of these disciplined value funds with near-peak cash certainly gives one pause about the current state of the market.

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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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