U.S. funds hold portfolios steady, equities near survey lows: Reuters poll

By Rahul Karunakar

(Reuters) – U.S. fund managers made no significant changes to their model global portfolio in June, a Reuters poll found on Thursday, even after Britain’s vote to leave the European Union last week sent global financial markets into a frenzy.

A punishing global markets sell-off on the shock UK vote in favor of Brexit at the end of last week has fueled doubts about further hikes in U.S. interest rates and global growth.

The survey of 13 U.S. fund managers conducted June 15-30 but with all responses coming in after the Brexit vote, showed that global equity allocations accounted for 51.1 percent of the model portfolio in June.

That was unchanged after four months of falls. Bond allocations came to 35.7 percent, according to the survey.

Those allocations have been steady this year but are down considerably compared with early 2013, when they stood above 60 percent for equities and below 35 percent for bonds, suggesting a shift towards assets seen as safer over the past three years.

“We have been and will remain relatively risk-averse while this correction period runs its course,” said Alan Gayle, director of asset allocation and senior investment strategist at RidgeWorth Investments.

“Brexit may extend that period of risk aversion, but we will continue to follow our investment process of selecting quality companies and assets with healthy upside potential growth.”

Asset managers left their recommendations for cash, property and alternate investment holdings steady in June at 4.4 percent, 2.0 percent and 6.9 percent respectively.

Among the global bond portfolio fund managers recommended an increase in North American debt to 66.2 percent from a two-and-a-half year low of 65.8 percent the previous month.

Within the fixed-income portfolio, funds favored exposure to sovereign debt.

(Polling by Shrutee Sarkar and Kailash Bathija; Editing by Hugh Lawson)