Many funds have an allowable cash range of zero to 20 per cent of the assets of the fund. On the latest figures, some funds had no cash holdings while others were holding more than 10 per cent. There's nothing particularly significant about cash holdings in themselves - they may just mean that a fund, for example, has had a big inflow of money and is yet to put that money to work. Or it may mean that the manager has a negative view on the market and is using cash strategically to keep some powder dry for cheaper buying if a fall comes. Unfortunately, unless the manager has a stated policy on its cash holdings, the information is of little use to investors in predicting the longer-term performance of the fund.
Stock picking is a different matter.
Sams says it appears from InTech's research that fund managers having a beta value of less than one could explain why the average manager is more likely to outperform in bad markets. Yes, I know, we're getting into gobbledygook territory - but put very simply, a beta is just a way of measuring how sensitive a portfolio is to market movements. If a portfolio has a beta of less than one, it will generally move less than the market. If the beta is greater than one, it should move by more than the market. Sams says the easiest way to understand beta values is to understand that they also apply to individual shares.