A month ago, fund managers were being heavily criticised for their defensive positions in holding high cash levels and missing out on the huge gains enjoyed by UK and US equities.
Managed funds have generally underperformed tracker funds and the major indices over the last year. Analysts have pondered how long some funds could continue to hang back from investing fully in equities.
According to the monthly survey from Merrill Lynch, published last week, the shift may have begun, with a sharp decrease in cash held by funds.
If fund managers thought it was risky being in the major equity markets a month ago, what has happened to change the situation?
Most analysts have been arguing that the US market is fully valued and opinion is divided on whether it will continue to run and, if so, how far.
The Dow Jones industrial average is at a record high and the FTSE 100 index has also rocketed in the past year although there is a general consensus that UK stock represents fair value.
Funds buying into these markets now are getting in at prices higher than they would have found a few months ago. But they are still buying.
Buyers of UK equities outnumber sellers by 14 per cent, the highest figure since mid-1995. In the US, buyers outnumber sellers by 10 per cent.
It is a difficult time for fund managers. As one said despairingly last week: "How long can we continue to be criticised for returning 20 per cent a year?"
Last December, fund managers had an average of 7.6 per cent of their assets in cash. This was the highest level of liquidity since 1990, when the UK was in recession and the Gulf War was inflating oil prices.
Cash holdings have now dropped to 5.8 per cent, with Merrill Lynch predicting further falls. Those in the survey planning to reduce cash outnumber those planning to raise cash by 35 per cent, the highest figure in more than three years.
Merrill's worldwide poll was completed in early February, involving 282 institutions managing more than $6,058bn.
Two fund management groups which have borne the brunt of much of the criticism for their cash holdings are PDFM and Gartmore. Both these groups are sticking to their guns and maintain that a defensive position is needed.
They argue that their performance should be measured over the longer term, not forgetting that most tracker funds have not yet had to measure up against a bear market.
Gartmore fund managers will not comment on its asset allocation but a spokesman for the group says there is some scepticism in the industry regarding the validity of the Merrill Lynch survey.
It is Gartmore's opinion that many of the big houses are becoming increasingly shy of equities although Gartmore has been the only group to question the survey openly.
As for its reasons for maintaining its high cash holdings, the spokesman says: "Gartmore as a house is concerned about corporate profits relative to expectations."
Gartmore believes that, although there are some powerful technical forces pushing the market in the short term, the group's defensive position will be vindicated in the longer term. Its current asset allocation sees about 17 per cent of funds under management in cash and bonds.
PDFM spokesperson Anne Baker says its cash holdings in an average balanced fund stand at about 13.5 per cent.
"We are still sticking to the fact that markets are overvalued in our opinion and we are remaining cautious," she says.
Like Gartmore, PDFM is paying the price for its nervousness on equities. Both groups have recently lost big pension fund mandates.
Last week, National Australia Group, which owns Yorkshire and Clydesdale banks, sacked PDFM and Gartmore as managers of an £800m equity fund and PDFM lost its contract with Railpen, the rail workers' pension fund.
Merrill Lynch says the more benign interest-rate outlook is one of the key reasons behind fund managers dumping their cash.
That outlook may have been strengthened with the news that underlying inflation in the UK has dipped to the the Government's target rate of 2.5 per cent. However, the Bank of England seems intent on not relaxing interest rates and is even making noises that the next move will be up.
Unsurprisingly, Merrill Lynch reports that opinion on the future direction of UK base rates is split, with 50 per cent of fund managers saying up and 44 per cent tipping a cut.
It has not stopped a big increase in interest in gilts, with buyers outnumbering sellers by 22 per cent.
Throw the Asian saga into the mix, and its possible effect on worldwide equity growth, and there is plenty of uncertainty in the markets.
Three months ago, there were fears that Asia was likely to go down the plughole altogether but more recent signs suggest the early stages of a recovery.
About 25 per cent of US-based managers believe that Asia will have a significant impact on corporate earnings in the domestic market compared with 7 per cent of their counterparts in Europe.
Henderson director Christopher Clark says the giant £1.5bn Witan investment trust remains almost fully invested but is not geared at present.
Clark believes that the big international generalist funds managed to outperform most of the specialist trusts last year by avoiding some of the more volatile areas.
The managers of Witan, which reported a capital return to shareholders of 20.8 per cent last year, remain bullish on UK and European equ ities. However, Witan is underweight in the US, which Henderson concedes runs the risk of missing further gains.