Rising stock market volatility and the 7% crash in Shanghai-listed stocks twice in one week has put fund managers around the globe on the defensive.

In the U.S., the first trading session of 2016 began with a bang: The Dow Jones industrial average (INDU) posted its worst one-day performance of the new year since 1932, losing -2.2% in value. By the end of the first week of 2016, the Dow was off 6.4% and the S&P 500 (SPY) was down 4.8% in the worst first five-day start of trading in a new year on record.

As a result of these developments and nervousness about an aging bull market, certain fund managers are choosing to hold a larger cash cushion inside their portfolios.   

The FPA Crescent Fund (FPACX) is one example of an actively managed stock mutual fund with lots of cash.

According to the most recent third-quarter Morningstar data, the $18.9 billion fund allocated roughly 35% to cash, 43% to U.S. stocks, 10% to international stocks  and 10% to bonds. By comparison, the average percentage allocated to cash for U.S. long equity funds is just 4%.

To explain FPA’s approach, the company’s website says, “We aim to protect capital first and create long-term equity-like returns second. We cannot eliminate risk, but we conduct ourselves by hoping for the best, while preparing for the worst.”

On the extreme side, fund managers at the Intrepid Endurance Fund Investor Class (ICMAX) are in love with cash.

Although the fund is classified as a small-cap value fund by Morningstar, it has a whopping 68% invested in cash and just 16.%  allocated to stocks.

The Tweedy, Browne Global Value Fund (TBGVX) is another equity fund stuffed with cash.

TBGVX has 22% allocated to cash while 70% is committed to international stocks and just over 7% to U.S. equities. Despite its large cash holdings, the $8.7 billion global equity fund has achieved a five-star silver rating from Morningstar.

Although stocks have had a rocky start so far in 2016, prices could tick higher, creating a performance drag for funds with large cash positions.  Also, there’s no certainty fund managers will be able to deploy their cash holdings in the correct stocks at the correct time. History is riddled with fund managers who imperfectly time the stock market.

A positive backdrop for stocks in 2016 is that U.S. presidential election years have historically been the second best performing year during the four-year cycle. Moreover, stock market losses greater than 5% have been rare during election years – there have only been six such events since 1896. (Two of these events occurred in 2000 and 2008, which were both full-fledged bear markets.)   Aside from cash, relative strength so far in the early going of this year has been concentrated in defensive dividend-paying sectors like Utilities (XLU) and REITs (VNQ).

Ultimately, financial advisors that buy mutual funds with high cash balances on behalf of clients should be ready to answer customer questions about style drift and market timing. Although funds with a large cash pool may provide a softer cushion during turbulent markets, they are likely to lag during rising markets.

Finally, clients with elevated cash positions inside their portfolio could be over-diversifying their cash exposure by investing in funds with equally high cash balances.

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