LONDON, May 30 (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 is expected to ease monetary policy next week, and mixed U.S. economic data have pushed back forecasts for a rise in U.S. 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 percent in May, down from 6.0 percent in April. (For table, see )
Bond holdings rose to a two-month high of 35.9 percent from 35.6 percent, while equity holdings eased to a two-month low of 50.8 percent from 51 percent.
Property holdings rose to their highest since June 2011, though remained at a relatively modest 2 percent.
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 percent, their highest since November, from 6.3 percent last month. They also added to holdings in emerging Europe, bringing them to a four-month high of 2.2 percent, and in Latin America, to a five-month high of 1.5 percent.
Investors cut North American equity holdings to a four-month low of 41.5 percent but added slightly to euro zone stocks, to 18.4 percent.
The respondents lifted North American bond holdings to two-month highs of 35.1 percent, and cut euro zone debt holdings to 30 percent.
Emerging European bond holdings rose to their highest since Dec 2010 at 2.2 percent, with yields comparing favourably to debt in the neighbouring euro zone.
Investors had just under half of their fixed income portfolios in government securities, while they had 27.7 percent in investment grade and 12.3 percent in high-yield bonds.
But investors continue to have a large overweight position in equities and underweight in bonds.
"The greatest risk to our global portfolios would be a policy error of the Federal Reserve to raise rates too early," said Sandra Crowl, member of the investment committee at Carmignac.
U.S. fund management firms slightly increased their stock holdings and pared back bond allocations even as both the S&P 500 index and U.S. Treasury debt rallied.
"The (stock) market advance is getting narrow and it argues for caution," said Alan Gayle, portfolio manager at RidgeWorth Investments.
European fund managers slashed cash holdings to 10-month lows and put the money into both stocks and bonds.
Among British investors, overall stock holdings fell to 53.8 percent from 55.6 percent, with money moving from North American and UK equities to emerging markets.
Japanese fund managers increased stocks and cut bonds, hoping that accommodative monetary policy in Europe and Japan would underpin risk assets. (Additional reporting by Jemima Kelly in London, Rahul Karunakar in Bangalore, David Randall in New York and Hideyuki Sano in Tokyo; Editing by Susan Fenton)