* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/asset-allocation-polls?s=6J&st=G poll data
By Shrutee Sarkar
BENGALURU, June 30 (Reuters) - U.S. fund managers recommended increasing equity holdings in June, preferring European assets on improved sentiment about the euro zone economy, but suggested little change to domestic allocations, a Reuters poll showed on Friday.
The survey comes as many global stock indexes have been repeatedly testing - and in the past few days, backing away from - new record highs alongside what are mostly fading expectations of a sudden pickup in inflation.
In the latest survey of 12 U.S.-based fund managers taken June 19-28, the model portfolio comprised 57.3 percent in equity holdings and 34.9 percent in bonds, with the remainder spread between cash, property and alternative assets.
While the latest recommendation is for a move up in stocks and a slight cutback in bond allocations compared with the previous month that may be partly because of a change in the composition of contributors.
The findings of the latest survey of fund managers is in line with a Reuters poll of equity strategists published on Thursday which showed most global stock markets are expected to continue rising, with notable optimism about an economic revival in Europe. But they were less bullish about the U.S.
"We continue to overweight equities in our portfolios, particularly in international and emerging markets where activity has shown noticeable improvement so far in 2017," said Alan Gayle, director of asset allocation and senior investment strategist at RidgeWorth Investments. He, too, cited Europe as a favoured destination.
The euro zone economy has outperformed most of its developed nation peers in recent months and the recovery has improved sentiment in the bloc.
That was reflected in the regional breakdown in the latest poll, which showed an increase in allocations to euro zone stocks in June to the highest since at least the financial crisis. Within the fixed-income portfolio too, fund managers increased recommendations for euro zone debt.
But they kept allocations of domestic assets broadly unchanged compared with May even as recent U.S. data has come out weaker than expected, including inflation.
"The U.S. economy remains sound, in our opinion, with limited chance of recession. That said, economic momentum in the U.S. has slowed in recent months and the prospects of meaningful fiscal policy initiatives have dimmed, which we believe increase the odds of a near-term stock market correction," said Gayle.
"(But) we do not believe conditions warrant a significant correction," he added.
Global wrap-up: Europe poll story: UK poll story: Japan poll story: China poll story: (Polling by Rahul Karunakar and Krishna Eluri; Editing by Ross Finley/Jeremy Gaunt)