European funds lift equity holdings to 8-month high:Reuters poll

By Natsuko Waki

LONDON (BestGrowthStock) – European fund managers lifted their equity holdings to an eight-month high in October and cut bonds and cash as strong corporate earnings and the resilience of the global economy push world stocks to two-year peaks.

The poll of 17 Europe-based asset management firms outside of Britain released on Thursday showed a typical mixed portfolio holding 48.4 percent in equities this month, the highest since February.

It held 39.0 percent in bonds — including government and corporate debt — which is the lowest level since June.

Cash holdings fell to a nine-month low of 6.0 percent from 6.6 percent in September, reflecting a growing appetite among investors to put cash to work.

The poll was taken between October 19 and 27, when world stocks (.MIWD00000PUS: ) hit their highest level in two years thanks to corporate earnings and anticipation that central banks would inject more liquidity to support the economy.

Investors allocated 32.3 percent of their equity investments into the United States and Canada, up from 31.3 percent last month. Euro zone equity holdings fell to 36.4 percent from 38.9 percent.

Within equities, investors were underweight utilities — often considered as a defensive sector — and financials, while they liked energy stocks.

In fixed income, respondents allocated 67.2 percent to the euro zone, down from 68.2 percent last month.

Overall, they held 53.2 percent in government securities, down from 58.4 percent in September, while they had 29.4 percent in investment grade corporate paper and 8.2 percent in high-yield bonds.

Respondents were most underweight in U.S. Treasuries, while they overweighted corporate bonds — maintaining the trend seen in the past several months.

Overall, investors were most overweight on equities, while they were most underweight in bonds.

(Additional reporting by Michel Rose; editing by Stephen Nisbet)

European funds lift equity holdings to 8-month high:Reuters poll