This Manager Of A $55 Billion Fund Is Dumping Equities In Favor Of Cash

Cash is king, at least it is for David Samra, a fund manager who oversees around $55 billion for Artisan Partners.

In an interview with Bloomberg, Samra said that his fund's exposure to cash now stands at around 13 percent, which is close to the 15 percent maximum. The fund manager has been active in selling companies he considers to have reached fair value and has a hard time finding suitable replacements.

Samra accurately timed the market early this year and was buying near February's lows. He was also active in buying after the Brexit vote sent global markets crashing only to soar back higher. Investors looking to use a "coattail" investment philosophy may consider trimming their equity holdings in favor of cash at this time.

"When stock-market rallies are broad-based like they are now, it makes it more difficult to find significantly undervalued securities," he explained.

UBS Is Still Attractive

UBS Group AG (USA) UBS is trading at such a low valuation, shareholders receive the firm's investment banking unit for free.

Meanwhile, UBS' wealth management business is "by far the best in the world," yet investors are correlating the bank with its troubled European peers.

"I think people are still fighting the last fight," he said. "They're still worried about the financial crisis. They're worried about increasing regulation. The regulatory structures are yet to be settled. It's in the category of a European bank. There's a lot of negative news about large European banks like Deutsche Bank and what's happening in the Italian banking system, most of which has very little directly to do with UBS."

What To Do When Little Is Attractive?

Samra noted in his interview that instead of looking for new investment ideas, he is spending time working with companies his fund already owns to improve their operations.

For example, he recently met executives from Samsung, which is the fund's biggest holding at $2.1 billion. Samra is calling on the South Korean-based company to add at least three international C-suite executives to its board of directors and for the company to list American depository receipts.

Posted In: NewsMediaBrexitCashCoattail InvestingDavid SamraPortfolio Allocation
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