funds cut equity allocations to lowest since financial
crisis: Reuters poll
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[April 29, 2016]
By Krishna Eluri
(Reuters) - U.S. funds recommended a cut to
equity allocations in April to their lowest since the financial crisis,
and an increase to alternative investments to the highest since that
time as well, a Reuters poll showed on Friday.
Non-traditional instruments, such as derivatives and commodities,
have become more attractive to asset managers this year. Wild
gyrations in financial markets earlier this year pushed many to look
outside of stocks and bonds for returns.
The poll of 13 U.S. fund managers running model global portfolios
cutting equity allocations to just 51.1 percent, the third straight
monthly downgrade to this category by the survey panel so far this
That figure has not been lower at any point across comparable
records that began in 2007.
Fund managers added to alternative investments for a third month in
a row, with the allocation rising to 6.8 percent from 6.2 percent
the previous month.
But recommended allocations to bonds, cash and property were
unchanged from the previous month.
A regional breakdown showed a fall in allocations to North American
stocks in April for a second consecutive month, to 64.2 percent, the
lowest in a year.
Within the fixed-income portfolio, fund managers kept their
recommendations largely unchanged from the previous month with North
American bond allocations at 66.2 percent.
Plenty of doubt remains about the U.S. Federal Reserve's likely
monetary policy path even as the central bank left the door open
this week for a June rate hike.
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Data released on Thursday confirmed that U.S. economic growth nearly
stalled in the first quarter, growing at a paltry 0.5 percent
annualized pace, braking sharply from an already-lackluster 1.4
percent. But most expect a pick-up in activity given that the labor
market remains strong.
"I'm looking for a firming economic outlook going into the second
half of the year, and I think that's going to create some
opportunity," said Alan Gayle, senior investment strategist at
"We remain cautiously optimistic that the economy and earnings will
re-emerge from the 2015 soft patch and finish the year higher," he
(Polling by Sarmista Sen and Anu Bararia; Editing by Toby Chopra)
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