Reuters Fund Manager Survey: European Equity Exposure At Five-Year Highs

Aug 31 2017 | 10:51pm ET

Global investors added to Eurozone stocks in August, raising their equity exposure to the highest level in at least five years while trimming U.S. equity exposure to the lowest proportion in over a year. 

Bullishness on European stocks stems from accommodative central bank policy, economic growth momentum and strong company earnings, according to the most recent Reuters asset allocation poll of 48 fund managers and chief investment officers in Europe, the United States, Britain and Japan. 

The survey was conducted August 16-29, the company said in an article Thursday.

Eurozone stock allocations rose to 20.5% of global equity portfolios, the poll revealed, with almost 90% of managers who answered a question on the outlook for European equities saying they could touch fresh highs this year. Respondents pointed to cheap relative valuations, strong growth momentum and positive earnings revisions for the optimism, Reuters added. 

Overall equity allocations were hiked by 1 percentage point to 47.1 percent, the highest level since January 2016. 

Meanwhile, investors cut their U.S. equity holdings almost 1 percentage point to 38.5%, the lowest level since July 2016. Despite a late-September deadline to raise the U.S. debt ceiling and warnings from President Trump that he would shut down the U.S. government if he doesn’t get funding for a border wall with Mexico, 84% of the managers who answered a question on the funding battle thought chances of a U.S. technical default were less than 50/50, Reuters said.

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