💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

U.S. funds prefer domestic assets and a but bigger cash buffer: Reuters poll

Published 10/31/2018, 09:39 AM
Updated 10/31/2018, 09:40 AM
© Reuters.  U.S. funds prefer domestic assets and a but bigger cash buffer: Reuters poll
US500
-
MIWD00000PUS
-

By Rahul Karunakar

(Reuters) - U.S. global fund managers made no significant changes to their recommended model portfolio in October, still preferring to hold North American assets but with a slightly larger cash buffer, a Reuters poll showed.

Equity allocations accounted for an average 56.7 percent of the global portfolio, essentially unchanged from 56.6 percent in September. Bonds were also static, at 35.5 percent, according to the Oct. 17-30 survey of 12 U.S. fund managers.

For the third month in a row, the notable change was a recommended increase in cash holdings, now up to 5.3 percent, the highest in over a decade.

Recommendations for allocations to North American stocks were also increased to the highest in two years, at the expense of euro zone and emerging market equities. Those findings are based on a smaller sub-set of respondents.

The cash holdings suggest even long-term investors are getting more defensive in the midst of market turmoil. The S&P 500 (SPX) is headed for its biggest monthly percentage drop in more than eight years and the broad world stocks index (MIWD00000PUS) losing about $4 trillion in value in October.

"The combination of aggressive Federal Reserve rate hikes, an escalating and potentially prolonged trade dispute with China and the upcoming mid-term elections has generated a great deal of anxiety for the markets," said Alan Gayle, president of Via Nova Investment Management. "Fear and uncertainty are currently dominating market psychology."

"We continue to favor the U.S. market over the international space, because of its higher earnings and revenue growth relative to the rest of the world. Moreover, despite the recent weakness in the U.S. markets, the domestic space has been a relative safe haven in a challenging market."

(Reporting and polling by Rahul Karunakar and Mumal Rathore, editing by Larry King)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.