Global funds raise U.S. equity holdings, eye emerging markets for 2016 bounce

Mon Nov 30, 2015 7:05am EST
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By Claire Milhench

LONDON (Reuters) - Global investors raised allocations to U.S. and British equities in November and lifted weightings of selected emerging market assets to multi-year highs as some managers positioned for a potential rebound in the sector.

The survey of 50 fund managers and chief investment officers in the United States, Europe, Britain, Japan and China was conducted between Nov. 17 and 26.

During this period, U.S. Federal Reserve officials strongly hinted that markets should expect an interest rate increase in December, its first since 2006. Mario Draghi, president of the European Central Bank, meanwhile indicated the ECB was ready to expand monetary easing at its Dec. 3 policy meeting.

Investors remained relatively bullish on the outlook for risk assets, keeping overall equity holdings steady in November at 48.2 percent in global portfolios. Bond holdings rose one percentage point to 37.4 percent while cash was cut to 5.4 percent from 6.3 percent in October.

Matteo Germano, global head of multi-asset investing at Pioneer, highlighted risks around China, emerging markets and the Fed as it exits almost a decade of near-zero interest rates. But he remains positive nevertheless.

"We believe that amid all the structural risks which are still present ... the drivers of a cyclical uptrend continue to be in place," Germano said.

This sentiment was most apparent within asset managers' equity portfolios, where they raised their U.S. holdings to 40.2 percent, up from 38.5 percent in October.

The S&P 500 .SPX rallied hard in October, ending the month 8.3 percent higher. It was unable to repeat the stellar performance in November, adding only half a percent, but investors remain upbeat about the outlook for the U.S. economy.   Continued...

Traders work on the floor of the New York Stock Exchange April 14, 2015.  REUTERS/Brendan McDermid