Portfolio Poll: Funds look to the East

The enthusiasm of international fund managers for Asian equities continued in the March quarter 2006 according to our latest Portfolio Poll. Global equity funds have been gradually lifting their share holdings in the region since the 'Asia Crisis' in 1997 and average weightings are now at a nine-year high of 7.5%. That's a significant bet given that Asia only accounts for 5.5% of the world market.

However opinions remain quite divided with some fund managers having more than one-quarter of their assets in Asia while others hold as little as 2%. As a general rule, U.S. fund managers are more positive about these markets than their European or British counterparts.

The survey shows that this overweight position in Asia has predominantly come at the expense of U.S. equities, which have steadily lost favour since the middle of 2005. Most fund managers have around 43% of their money in the U.S. at present, well under the world benchmark weighting of 48%. This is particularly the case with European managers who have historically been negative on the U.S. market.