Japan fund managers keep stocks allocations steady in December

TOKYO: Japanese fund managers kept their holdings of global stocks unchanged in December after the US Federal Reserve’s first interest rate hike since 2006 spelled uncertainty ahead for risk assets, a Reuters survey found on Tuesday.

A survey of six Japan-based fund managers, conducted between Dec 14 and 18, showed respondents on average wanted to allocate 41 percent to stocks in December, unchanged from November. So far this month the Dow has lost more than 3 percent, Japan’s Nikkei has shed 5 percent and Germany’s DAX has dropped more than 6 percent as falling commodity prices have added to concerns about global equities.

Some still saw an opportunities in stocks. “Near-term market volatility might be rising, but we are mildly overweight on equities as we see an upside in these assets in the medium to long-term,” said a fund manager who declined to be named due to company policy. The respondents kept their global bond allocation at 53.3 percent, unchanged from the previous month.

Within bonds, they trimmed their holdings of US and Canadian debt to 28.1 percent in December from 31.3 percent in November as the Fed tightened monetary policy. They raised their euro zone bond allocation to 18.4 percent from 16.6 percent. Euro zone bonds were hit earlier this month after the European Central Bank’s milder than expected monetary policy easing, but the market has been well supported overall on deflationary pressures from sliding crude oil prices.


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