BENGALURU (Reuters) – Global funds recommended an increase in bond holdings to the highest level in seven years, at the expense of stocks, and said the recovery in the coronavirus-hit world economy will be U-shaped, a Reuters poll showed.
FILE PHOTO: The floor of the New York Stock Exchange (NYSE) stands empty as the building prepares to close indefinitely due to the coronavirus disease (COVID-19) outbreak in New York, U.S., March 20, 2020. REUTERS/Lucas Jackson
U.S. stocks surged on Wednesday as hopes for an effective COVID-19 treatment prompted a broad rally and helped traders shrug off bleak gross domestic product data and words of warning from U.S. Federal Reserve Chair Jerome Powell.
But the April 16-30 poll of 34 fund managers and chief investment officers across North America, Europe and Japan – with over $2.5 trillion assets under management – showed a recommended cut to equity allocations to an average 45.1% of their model global portfolio from 45.9% in March. That would be the lowest in seven months.
Another focus has been the unprecedented fiscal and monetary policy from world governments and central banks to soften the economic damage. The European Central Bank at its news conference due at 1330 GMT on Thursday is expected to expand its bond-buying programme.
While the yield on benchmark U.S. 10-year Treasuries US10YT=RR has held around 0.6%, the poll suggested an increase to bond holdings t