While fund managers are now slowly testing the waters of the equity markets, leading super funds are still putting their money in cash on the back of investor demand.

The $4.2 billion Equipsuper invests cash in a variety of assets including bank deposits. This pertains to funds invested within the cash investment option and the fund's diversified investment options that include an allocation to the asset class.

While the Federal Government guarantee for Australian bank desposits does not extend to super funds, Equipsuper, like many other industry funds, are finding safe havens in products covered by the guarantee.

Currently the balance of Equipsuper's cash is invested in securities backed by Australian banks. These securities are comprised of bank bills and certificates of deposits - placing them safely under the banner the government's guarantee of wholesale funding to Aussie banks.

Meanwhile the cash investments of the $6.1 billion MTAA Super also seem to be weathering the volatile markets.

MTAA Super said the "bulk" of its cash is invested in the Macquarie Treasury Fund, while Macquarie has advised that 99 per cent of the securities in the MTF are eligible for the government guarantee on bank deposits.

A small residual cash component is on deposit with the National Australia Bank, which is also eligible for the guarantee.

In contrast to super investors' appetite for cash, Australian fund managers' interest in cash investments fell from 50 per cent to 13 per cent in six months, according to a Russell survey.

The research found the number of Australian fund managers that are optimistic in their outlook of Australian equities increased by 22 per cent to 54 per cent over a six month period.

"The past 12 months have been characterised by a flight to safety away from equities to cash, however the latest results show this trend is slowly reversing. Managers are becoming more bullish and are slowly buying up assets they think are undervalued," said Andrew Pease, Russell Investments investment strategist.