Personal Finance

Fund managers boost equity exposure

Investment fund managers hinted at improvement in the economy last month as they moved more money into the stock market, a survey has showed.

Reuters revealed that leading fund managers at 11 British institutions saw their exposure to equities jump during the month from 46.4% to 49.8%, up more than three percentage points.

While there was a 1.3 percentage point drop in more defensive bonds to 24.2% from 25.5%.

Research revealed that it was the first increase in equity holdings by market professionals in five months.

While fund managers in the UK and Japan moved funds into equities during August, those in the US and Europe reduced their positions - revealing a global disparity between the perceived outlook for different markets.

In the US, share holdings fell to 61.5% from July's 65% on mounting concerns that weakness in its housing market could pull the world's largest economy back into recession. If it does suffer a double-dip, the rest of the world is also likely to feel the effects and the confidence in the UK and Japan may prove misplaced.

At the same time in the US, bond holdings rose to 31.8% from 29.8% and cash allocations rose to 3.1% from 2%.

In Europe, investment professionals have 45.1% of their holdings in equities, down from 46.8% in July, and 41.2% in bonds compared with 40.6% last month. Cash holdings stood at 6.9%, compared with 6.7%.

Sam Jackson

Money Dashboard