The latest Wren Advisers Portfolio Poll shows that global equities fund managers still have a strong preference for U.S. and European stocks.
The average U.S. weighting of 50.2 per cent in the June quarter is close to a record high and around 2 percentage points above the neutral benchmark. Continental Europe is also a favoured destination with an average portfolio allocation of 19.2 per cent.
Perhaps indicating that the grass is always greener, European managers are more bullish on the U.S. than their American counterparts and vice versa. U.S. based funds have over 22 per cent of their money invested in Europe and a further 8 per cent in the United Kingdom.
The money heading into U.S. and European stocks has typically been sourced from underweight positions in Asia and to a lesser extent the U.K. and Japan.
Wren Advisers Global Equities Poll – June 2014 |
|||||||
|---|---|---|---|---|---|---|---|
| US | Japan | UK | Europe | Asia | Emerging | Other | |
| Average | 50.2 | 7.7 | 7.4 | 19.2 | 6.4 | 5.0 | 4.2 |
| Benchmark | 48.1 | 8.2 | 7.9 | 16.7 | 12.2 | 3.3 | 3.5 |
| + / - | 2.0 | -0.5 | -0.5 | 2.5 | -5.8 | 1.7 | 0.7 |
Another key highlight is the rising allocation to Asian stocks, which have been shunned by many international funds over the past few years. Although managers remain cautious on the region, presumably worried about a possible slowdown in China, they are not as negative as they were six months ago.
Managers are also noticeably bearish on the United Kingdom where the average weighting is at an eighteen-year low.
