The latest update to our Asset Allocator allocations database reveals a general decline in enthusiasm for most equities, but an uptick in exposure to the US, perhaps a reaction to rally earlier this year in technology stocks.
The database reveals the average equity exposure in the balanced portfolios we monitor fell to 54 per cent, having been around 56 per cent at the start of the year.
Within that, exposure to UK equity funds dropped to 13.8 per cent, that’s the lowest exposure ever recorded.
European equity funds fell even further from favour, with the average now being 4.4 per cent, a full one percentage point drop since the start of the year.
But US equities bucked the trend, even if the moves were more modest than a tech CEO’s latest proclamations, as the average exposure to US equity funds rose by half a percentage point, to 15.3 per cent.
This extends the rather surprising pattern of wealth managers having a greater proportion of their client’s capital in US than UK equities.
The house with the biggest gap between the two exposures is HSBC Asset Management, who have just 2 per cent in the home market, and 32 per cent in US equity funds.
The next DFM offering the meagrest of rations to UK equity folks is Charles Stanley, with 4 per cent in the UK and 22 per cent on Wall Street.
Among those defying the consensus by having a greater exposure to UK than US equity funds are Iboss, with an exposure of 17 per cent to UK equity funds, and just 9 per cent to the US.
Both of the Evelyn Partners model portfolio ranges, Active and Core, have a greater exposure to UK than US, each with about a 6 per cent margin.
Of course one of the factors behind the surge in US exposure may simply be market movements, given the strong start some of these funds had to 2023 due to the recent tech surge.
The most popular US equity fund among our allocators is Fidelity Index US and it has returned 12 per cent so far this year.
Something else that struck us from the latest update to the data, is the continued and significant increase in exposure to global funds among the allocators we cover.
As of September, the average is 8 per cent of the capital of a balanced portfolio deployed into such funds, compared with 6 per cent just three months ago.
Again, the reason for this may be market movements since may of the most popular global funds have an outsized exposure to the US.
The most popular global fund among DFMs is Fundsmith Equity, which has a 67 per cent exposure to the US.
