Global funds dump U.S. stocks and bonds amid January storm: poll

Fri Jan 29, 2016 10:33am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Claire Milhench

LONDON (Reuters) - Global investors cut their U.S. equity and bond holdings in January, a Reuters poll of fund managers showed on Friday, as the S&P 500 .SPX suffered its worst January since 2009 and after the U.S. Fed began tightening.

U.S. stocks shrank 1 percentage point to 37 percent of asset managers' global equity portfolios, the lowest level in at least five years, against a backdrop of falling share prices that saw over $8 trillion wiped off global stock indexes.

Investors also cut their U.S. bonds allocation by 2.4 percentage points to 35.8 percent of their global fixed income portfolios, the lowest since June 2014.

The move followed a rate rise by the Federal Reserve in December and a spike in U.S. high yield credit spreads as concerns mounted over the finances of energy companies.

The survey of 46 fund managers and chief investment officers in the United States, Europe, Britain and Japan was conducted between Jan. 15 and 27.

During this period, a collapse in oil prices to 12-year lows, heightened Chinese market volatility and worries about structurally low growth and high global debt sent investors stampeding for cover, pushing stocks deeper into bear market territory.

"Clearly, global equity markets have been driven by panic and anxiety so far this year," said Peter Lowman, chief investment officer at UK-based wealth manager Investment Quorum.

Perhaps not surprisingly given this backdrop, investors raised their cash levels to 6.5 percent of their global balanced portfolios, the highest since June.   Continued...

Traders work on the floor of the New York Stock Exchange January 28, 2016. REUTERS/Brendan McDermid