Global funds trim stocks, wary on French elections
By Claire Milhench
LONDON (Reuters) - Global investors trimmed their equities exposure in February, with many arguing that markets had become too complacent about risks stemming from Europe's election calendar after a recent blistering stock market rally.
A Reuters monthly asset allocation poll of 48 fund managers and chief investment officers in Europe, the United States, Britain and Japan showed overall equity exposure in global balanced portfolios had been cut a fraction, to 45.5 percent of portfolios from 45.8 percent in January.
The share of bonds rose to 40.3 percent from 39.9 percent in January, the poll showed.
While the majority of participants expressed concerns about upcoming elections in Europe, especially in France, there was also a view that the reflation trade - a bet on economic growth and inflation - had run ahead of itself.
Investors have piled into equities since Donald Trump's election as U.S. president, betting that his pledges to cut taxes and boost spending will spur growth.
"We think that the reflation trade is widely discounted and that markets have become complacent to downside risks," said Joost van Leenders, chief economist for multi-asset solutions at BNP Paribas Investment Partners.
The poll was conducted between Feb. 13-27, a time when global stocks hit record highs .MIWD00000PUS and the market cap of the U.S. S&P 500 .SPX index surged past the $20 trillion mark for the first time.
However, Trump has given few details on how his programs will be implemented, prompting investors to marginally trim U.S. exposure to 41.2 percent of equity portfolios. Continued...