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London - Global investors increased their exposure to equities in November despite weaknesses on many bourses, while US and British fund managers stepped away from crisis-hit eurozone bonds.
Surveys of 55 leading fund management houses in the United States, Japan, Britain and Europe ex UK showed a continuing desire to invest in stocks heading towards year-end.
This was despite the fact that world stocks as measured by MSCI have fallen close to 6% from a high early in the month.
A good part of the reason for that decline was worry about eurozone government bonds, epitomised by fears that Ireland, now the recipient of a bail out, would not be able to meet its debt obligations and that the rot would spread to others such as Portugal and Spain.
The poll showed investors were divided over eurozone debt with the so-called Anglo-Saxons, Britain and the United States, cutting their exposure sharply, but others increasing.
Eurosceptic Britain was the most negative, slicing the average exposure to eurozone debt to 7.9% of the bond portion of a typical mixed asset portfolio from 10.7% a month earlier.
"There will be more nasty surprises next year. The European banking system still has major issues and bad debts to write off," said Jeremy Beckwith, chief investment officer at wealth manager Kleinwort Benson.
By contrast, primarily eurozone European investors outside Britain increased their exposure. Some of this may have been a case of investors bringing their assets home.
The poll also does not differentiate between moves into core eurozone debt such as German and peripheral debt such as Portugal.
Overall, however, investors appeared to be keeping relatively bullish, boosted by both the US Federal Reserve's asset-buying quantitative easing programme and signs of better-than-expected global economic recovery.
The managers raised equity exposure to 53.2%, the highest since March, from 52.7% on October. Bond holdings slipped to 34.2% from 34.6% and cash dropped to 4.6% from 5.%.
Regionally
US fund managers increased exposure to stocks and slowly cut back on bonds for the third month in a row.
The poll of 14 US-based fund management companies showed firms increased their equity holdings to an average 63% of their assets, up from 62.4% in November and 61.7% in September.
They trimmed their exposure to bonds to 30.2% from 30.4% in October. Cash holdings dropped to 2.8% from 3.3%.
Japanese fund managers also lifted their global stock weightings, to an 11-month high in November.
The survey showed 13 money managers raised their average weighting for global equities to 47.2% from 46.6% the previous month.
The average weighting for bonds rose slightly to 46.9% from 46.8% while the average allocation to cash fell to 3.2% from 3.7%.
The poll of 17 Europe-based asset management firms outside Britain showed a typical mixed portfolio holding 49.6% in equities this month, the highest since February, compared with 48.4% in October.
It held 37.3% in bonds including government and corporate debt - which is the lowest level since January.
Cash holdings ticked higher to 6.1% in November from a nine-month low of 6.0% previously.
British fund managers bucked the global trend, cutting exposure to equities to 52.8% in November from 53.5% in October.
Bond holdings rose slightly, to 22.5% from 22.2%. But there was a large cutback in eurozone bonds.
A separate poll, not included in the global calculations, showed China-based funds cutting stocks and adding to cash.
