Leading investors cut cash holdings in May

LONDON, May 31 (Reuters): The world's top investors cut cash holdings this month to their lowest since November and put money to work in risky assets, on the expectation that developed market interest rates will remain low, Reuters polls showed on Friday.
Property holdings and emerging market stocks and bonds were among beneficiaries of the hunt for yield. The European Central Bank (ECB) is expected to ease monetary policy next week, and mixed US economic data have pushed back forecasts for a rise in US interest rates.
The monthly polls covering 51 leading investment houses in the United States, Japan and Europe showed cash holdings within the model portfolio fell to a six-month low of 5.7 per cent in May, down from 6.0 per cent in April.
Bond holdings rose to a two-month high of 35.9 per cent from 35.6 per cent, while equity holdings eased to a two-month low of 50.8 per cent from 51 per cent.
Property holdings rose to their highest since June 2011, though remained at a relatively modest 2 per cent.
The poll was taken between May 12 and 28, when world stocks rose to 6-1/2 year highs and investors became less nervous about tensions between Russia and Ukraine.
The U.S. S&P 500 hit record highs and emerging stocks moved firmly into the black for the year.
"Equities...look fairly priced in valuation terms and need firm evidence of a sustainable increase in corporate earnings to make further significant progress," said Robert Pemberton, investment director at HFM Columbus.
"Commercial property continues to produce solid, consistent, low volatility returns with a low correlation to other asset classes. It produces a regular income return at a time of historically low bond yields and limited alternative income-producing assets."
Within equities, investors boosted their holdings of risky emerging markets at the expense of North American stocks.
They raised Asian stock holdings to 7 per cent, their highest since November, from 6.3 per cent last month. They also added to holdings in emerging Europe, bringing them to a four-month high of 2.2 per cent, and in Latin America, to a five-month high of 1.5 per cent.
Investors cut North American equity holdings to a four-month low of 41.5 per cent but added slightly to euro zone stocks, to 18.4 per cent.
The respondents lifted North American bond holdings to two-month highs of 35.1 per cent, and cut euro zone debt holdings to 30 per cent.