"Emerging Markets Godfather" Mobius: Funds holding 95% cash to deal with tariff risks.

Mark Mobius, known as the "Emerging Markets Father", has most of his fund holdings in cash, waiting for trade-related uncertainties to pass, which could last up to six months. Mobius said, "Cash is king at the moment. So, 95% of my fund is in cash," "Now, we must preserve cash and be ready to take action when the time is right." Mobius has been investing in developing markets for about thirty years, and he believes that some emerging markets like India will perform quite well in the current environment, "but we have to wait for everything to stabilize and see this uncertainty gradually fade away." While many Wall Street managers and strategists are moving towards defensive strategies in stock allocation, Mobius' high cash holdings indicate that escalating trade tensions have increased risks. A survey by Bank of America earlier this month showed that investors' sentiment about the economic outlook is at the most pessimistic level in 30 years. Mobius said investors may only be able to assess market opportunities after the end of trade negotiations in the next four to six months. He also mentioned that he will not hold onto this much cash for longer than "three to four months" and will start deploying some funds based on opportunities. "If the market falls further, we will certainly invest more funds." Mobius said in an interview in 2023 that he manages assets of about $300 million. The fund manager expects India to benefit as Trump seeks to reshape global supply chains to no longer depend on China, the largest economy in Asia. "The U.S. is very keen to make deals with India because it will be an alternative outside of China," he said, adding that Indian stocks related to software and hardware are also in his focus. On the other hand, if there is a fundamental change in the government's attitude towards trade and domestic consumption issues, "I will become very optimistic about China." Mobius also mentioned that he holds a "small amount of S&P 500 index funds" to track the market, and he expects the index to rebound from its current levels by the end of the year as investor confidence in U.S. investments returns. He said, "Trump does not want to see a significant market crash, so he will make adjustments and announcements that will give market participants more confidence."