The latest Wren Advisers Portfolio Poll shows that global share funds continued to lift their holdings in the US during the December quarter 2017.
One of the driving forces behind the overall increase is the rising allocations by American fund managers. For the past few years, US managers have been more pessimistic about their own equities market than their European counterparts but that has reversed during the last twelve months. These funds have mostly been reallocated from Continental Europe and the United Kingdom although managers are still overweight in these regions. Once again, British funds are underweight in Continental European stocks and vice versa. However the combined European weighting has dropped to 24.3%, its lowest level since we have been conducting this survey. This is a mirror image of the situation in Asia where fund managers are lifting their allocations but are still underweight the FTSE All-World benchmark of 12.7 per cent.
Emerging market equities, which tend to outperform when the US dollar is weakening, are again very much in favour with global fund managers. The latest survey shows an average weighting of 5.4 per cent which is well above the neutral benchmark of 2.7 per cent. The average weighting in Japanese equities is 8.5 per cent which is roughly where it has been since 2011.
Wren Advisers Global Equities Poll – December 2017
|Poll Average (%)||51.6||8.5||7.5||16.7||6.9||5.4||3.4|
|Over / Under (%)||0.3||-0.1||1.4||1.0||-5.8||2.7||0.5|