Hamish Douglass, manager of the Magellan Global Equity Fund, is holding over 15% of the fund’s $5.4 billion in cash, Financial Advisor reports. The fund beat 99% of its competitors over the last five years, and with a 0.4% gain over the past year has beaten 90% of its peers over that period (during which the MSCI All-Country World index lost 13%). Douglass more than tripled the fund’s cash holdings from July to August 2014 and now says, “we’re happy to bide our time in the cash position.” He remarks, “it’s better being six months too early than six minutes too late on these things.” Although the move to cash was prompted in part by expectations of market turmoil, Douglass remains in cash due to concerns about valuations. He says that high-quality stocks “are still at very expensive levels, effectively factoring a zero interest rate virtually forever,” and so “we’re holding cash rather than the most defensive equities we would have otherwise held.” The MSCI World Minimum Volatility Index, composed of stocks thought to be relatively safe in tumultuous times, is trading at a 31% premium over MSCI’s regular world share price gauge. Douglass predicts that “China will steady over the next 12 months,” and continues: “if that happens, as U.S. rates start to go up, we’ll get some interesting repricing that enable us to deploy the cash.”