US fund managers recommended cutting global stock holdings in their model portfolio to the lowest since the financial crisis and suggested increasing higher cash and property allocations, a Reuters poll showed.
Stock markets in the US and a few Asian countries have rallied to record highs in recent weeks, even though the Federal Reserve is widely expected to end its stimulus program next month and raise rates by June.
But a poll of 12 funds taken over the past week showed money managers preferred to lower their exposure to equities to 55.9 percent this month from 56.1 percent. Cash allocations soared to a six-year high of 5 percent of their total portfolio.
Investors probably cut their equity allocations after the benchmark Standard & Poor's 500 index crossed the 2,000 mark for the first time in late August, according to Keith Hembre, chief investment strategist at Nuveen Investments.
However, stocks are unlikely to lose much of their appeal. Data last week confirmed the US economy is recovering steadily and a government report on Friday is expected to show more than 200,000 jobs were created in September.
A recent Reuters poll indicated global equity markets are shifting away from central bank cash and are relying on economic optimism to fuel the next surge. American and British shares are expected to lead the rally.
"It's hard to get too bearish if earnings are still going right," Hembre said. His firm expects to raise its equity holding over the last quarter of this year.
Within equities, fund managers suggested buying more US stocks and reducing a cut in euro zone holdings to its lowest since September last year.
The European Central Bank on Thursday is expected to disclose more details on its asset-backed securities and covered bonds purchase plan.
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