Global equity allocations accounted for 51.4 percent of this
month's portfolio, barely changed from 51.3 percent in both
September and October, with bonds trimmed slightly to 37.3
percent from 37.6 percent.
Those are near record lows and highs, respectively, for survey
data going back to 2007. That stands in sharp contrast to
recommended levels in early 2010, of above 66 percent for
equities and below 30 percent for bonds.
Steady overall data recently suggest a holding pattern since the
Fed decided against raising interest rates at its September
meeting. It is nearly a decade since its last rate rise. Since
then, U.S. stock markets have rallied and are near record highs.
<.DJI> <.SPX>
Still, fund managers trimmed equity recommendations for nearly
all regions, except for the euro zone and emerging Europe, which
they increased to 14.5 percent from 13.4 percent and to 3.3
percent from 1.5 percent, respectively.
"We are encouraged by the steady economic recovery in the
European Union as a further sign of broader global stability.
This favors the equity market as we approach 2016," said Alan
Gayle, senior investment strategist at RidgeWorth Investments.
Gayle kept his global equity allocation steady in November, but
increased his preference for North American stocks.
Overall North American equity recommendations were downgraded to
67.8 percent from 69.1 percent, the lowest since December 2014,
and fund managers' preference for North American bonds were cut
to 70.0 percent, the lowest in seven months.
"The bond market represents more of an evolving risk given the
likely onset of Federal Reserve rate hikes near-term, which in
turn will lead to speculation as to when the rest of the world
will follow," said Gayle.
Wealth managers suggested reducing investment in government
securities significantly, to 42.8 percent in November from 48.2
percent, while upgrading investment grade and high-yield
allocations as they look for better returns.
November's model portfolio highlights the divergent monetary
policy paths likely to be undertaken by the European Central
Bank and the Fed in the coming months.
While markets are now pricing in an around 75 percent chance of
a Fed rate hike in a few weeks, expectations have been growing
that the ECB will expand its quantitative easing program. [ECILT/EU]
Bond allocations for the euro zone increased to 12.7 percent
from 11.8 percent.
Asset managers also increased their recommendations for cash
holdings and property, to 4.1 percent from 3.9 percent and to
2.5 percent from 1.3 percent, respectively, while alternate
investments were reduced to 4.8 percent from 5.8 percent.
(Polling by Khushboo Mittal and Kailash Bathija; Additional
reporting by Hari Kishan; Editing by Ruth Pitchford)
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