Italian funds trimmed equities for a third consecutive month in April to just over 50 percent, while moving away from Japanese shares after the earthquake and tsunami, a Reuters survey showed. Cash holdings edged up to 7.4 percent in the balanced portfolios of eight fund managers polled by Reuters.
The move confirmed the more cautious stance on risky assets taken last month after unrest in North Africa sent oil prices to their highest levels in years. Exposure to bonds, largely underweight except for corporates, was unchanged from March. While most participants remained overweight on equities, the poll showed more fund managers were underweighting the Tokyo bourse. Exposure to Asian emerging markets rose and US stocks continued to be favoured by five of the fund managers.
"The outlook is slightly better for the US because the Federal Reserve activity is market-friendly and the weak dollar helps companies. But sooner or later the US government will have to take action on the debt," said Nicola Trivelli, chief of investments at Sella Gestioni SGR.
Fund managers confirmed their preference for stocks linked to commodity prices such as miners and oil and gas companies. The price of silver spiked this month to a 31-year high, gold touched a record high and US crude oil climbed to 2-1/2-year peaks. Participants increased weighting in technology shares, betting on merger activity in the sector and on capital spending by cash-rich companies.
"We are positive on US tech shares, although we still have to assess the impact of the Japanese disaster on these companies", said Marco Bonifacio, fund manager of Zenit SGR. Pessimism grew again over insurers in the month, with more asset managers underweighting the sector that is likely to bear the costs of the Japanese earthquake, tsunami and nuclear disasters.