Investors brace for 2012 with higher cash, stocks: Reuters poll

Mon Dec 19, 2011 9:22am EST
 
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By Natsuko Waki

LONDON (Reuters) - Investors raised their cash balance to the highest in a year in December as they prepared for a jittery 2012 with growing concerns over the euro zone debt crisis, although some dipped back into cheap equities, Reuters polls showed on Monday.

The surveys of 56 leading investment houses in the United States, continental Europe, Britain and Japan showed a typical balanced portfolio held 6.6 percent of its assets in cash, its highest since at least December 2010, from 6.4 percent last month.

The polls also showed exposure to stocks rose to 51.3 percent, the highest since July, from 50.6 percent, led by U.S. and Japanese investors.

Bonds fell to 34.3 percent from 35.3 percent, the lowest since March. <ASSET/WRAP>

"Despite the more lackluster prospects for economic growth next year, we are positive on the longer-term prospects for equities, reflecting low valuations and the relatively strong financial positions of many companies," said Alec Letchfield, Chief Investment Officer, Wealth at HSBC Asset Management.

"However, further volatility is likely and downside risks remain in the event of another escalation of the euro zone crisis."

Within equities, Britain and emerging Asia gained in popularity, while allocation to North America and euro zone stocks fell.

The global equity market, measured by MSCI .MIWD00000PUS, is winding down a volatile 2011 with a year-to-date loss of more than 12 percent, which has lowered valuations across the board.   Continued...