As much as fund managers would shy away from accepting the fact, many of them are today grappling with high cash reserves. The two reasons when fund managers hoard cash are – when they do not see opportunities or when they sense a higher than usual redemption. The lack of opportunity is triggered by high valuations today. There is no doubt that market valuations have gone up considerably in the recent months. The price to earnings ratio (PE) is the indicator of valuation, which is the ratio of the market price of a stock or index to its earning per share.