LONDON Investors kept their allocations pretty much unchanged in the first month of 2011, but shifted stock holdings from emerging markets and Europe into U.S. equity markets.
Overall, Reuters surveys of 56 leading investment houses in the United States, Japan, Europe ex UK and Britain showed investors focusing on an improved global economic outlook but also hedging a bit with extra cash holdings instead of bonds.
Equity holdings were at 54.2 percent in January, barely changed from 54.1 percent in December.
A typical mixed-asset portfolio held 33.7 percent in bonds, down from 33.9 percent the previous month, and 4.1 percent in cash, up from 3.9 percent.
Most of this month's polling took place before the crisis in Egypt, which has added some volatility to markets. But as longer-term investors, many of the respondents are unlikely to make quick changes.
The polls confirmed a continuing move by investors away from emerging equity markets, viewed as somewhat overbought, and into U.S. stocks, which have been benefiting from signs of a rebounding U.S. economy.
Emerging market stock holdings fell to 13.2 percent of stock portfolios from 14.3 percent in December. There were also cuts in holdings of UK and euro zone equities.
The beneficiary was North America, where mainly U.S. holdings rose to 44.0 percent from 41.9 percent.
"We are concerned about the overvaluation of many emerging markets, Asia in particular, which tend to be a very 'crowded' trade," said UBS strategist Manuel Wildhaber.
Generally, however, there was optimism about the recovery, tinged with caution about moving too fast.
"The stock markets in major economies are firm and bond markets are relatively calm because we are seeing an economic recovery in the United States," said Yoshinori Nagano, senior strategist at Daiwa Asset Management.
"But if we look at the volatility index and so on, investor sentiment in the stock market is becoming too optimistic."
U.S. fund managers slightly lowered their exposure to stocks in January but a pick up in the U.S. economic recovery kept sentiment buoyant.
Changes in the sample of the poll masked what was effectively a slight increase in stock exposure.
Based on 14 U.S.-based fund management firms, funds held 64.1 percent of their assets in equities, compared with 65.05 percent a month earlier.
It also showed money managers scaling back their exposure to bonds for a fifth consecutive month.
European fund managers increased their cash holdings as they grew cautious about valuations in risky assets, but equity holdings nonetheless remained unchanged at a one-year high.
The survey of 17 Europe-based asset management firms outside Britain showed a typical mixed portfolio in January, holding 50.1 percent in equities, unchanged from December and their highest level since January 2010.
Bond holdings, which include government and corporate debt, also held steady at 37.5 percent of asset managers' portfolios, cash holdings rose to 6 percent from 5.3 percent.
Japanese fund managers slightly cut their global stock and bond weightings on the view that recent rises in asset prices -- mainly in emerging nations -- were overdone.
They raised their cash allocation for the first time in three months.
The 13 asset managers' average weighting for equities fell 0.3 percentage point to 46.8 percent, the lowest since October. The weighting for bonds fell to 47.8 percent, down 0.5 percentage point from 48.3 percent last month.
British investors continued to buy more stocks, reducing their holdings of bonds and property.
The survey of 12 British investment managers showed the average allocation to equities increased to 55.9 percent from 54.2 percent a month earlier, while bond exposure fell to 21.1 percent from 22 percent.
January marks the second consecutive month of increased allocations to shares.
(Additional reporting Isabel Coles and Chris Vellacott in London, Akiko Takeda in Japan, Jennifer Ablan in New York and Bangalore Polling Unit; Editing by Hugh Lawson; Graphic by Scott Barber)