The average suggested equity weightings over the next three months fell to 82.5 percent from a five-month high of 83.9 percent a month earlier, according to the poll of eight China-based funds conducted during the past week.

"I'm most worried about three things -- a possible worsening of macro-economic data, more monetary tightening and a potential slide in corporate profits," said a Shanghai-based fund manager who declined to be identified.

Fund managers doubled their suggested bond allocation to 10 percent, highest since May 2009, but slashed recommended cash weightings to 7.5 percent from 11.1 percent a month earlier.

Bond yields have been rising due to tightening liquidity. The central bank has raised banks' reserve ratios five times, and benchmark interest rates twice so far this year to tame stubbornly high inflation.

Annual inflation, which was at 5.3 percent in April, is could rise further due to a drought and power shortages, leading to possible additional tightening measures.

However, the fund managers polled expected that the Shanghai Composite Index to rise to 2,927 points over the next three months, compared with 2,732 points in afternoon trade on Monday.

Within an equities portfolio, the suggested weighting for consumer stocks rose to a five-month high of 25.88 percent from last month's 19.1 percent, as some investors sought bargains after the shares' recent corrections.

Recommended allocation for financial shares fell to 18.1 percent from 20.6 percent a month earlier, on concern that tight liquidity would sap demand for big-cap stocks such as banks and insurers.

Copyright Reuters, 2011