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Could you suggest whether it’s worth taking up the NAB retail entitlement, considering my portfolio consists of 40% banks and Telstra shares?
Also, where do the fund managers invest their cash when they state they’re sitting on the sidelines waiting for better value in the market?
A: Very hard for me to offer you a specific opinion without a fuller understanding of your investment objectives, financial situation etc.
If the banks and Telstra component is around 40% of your allocation to Australian equities, then you are around index weight. I wrote last week that I still saw value in banks – feel that being around index weight is about the correct position – and that NAB is my preferred bank. I am taking up my rights – so I guess that gives you some idea.
If you don’t plan to take them up, rights trading ceases on Monday.
Where do fund managers park cash? With the bank (on deposit), or they invest in bank bills or Treasury notes. These securities are very, very liquid.
