By Claire Milhench
LONDON (Reuters) - Global investors dumped equities in July and raised bond allocations after Britain's vote to leave the European Union and subsequent signs of damage to economic growth prompted a dash toward fixed income.
The Reuters monthly poll of 44 fund managers and chief investment officers in the United States, Europe, Britain and Japan was conducted between July 15 and 28 and is the first to fully reflect the fallout from the Brexit vote.
After the vote, sterling crashed to 31-year lows and some $2 trillion was wiped off global stock markets, as investors stampeded into the safe haven of bonds.
Markets have recouped some of the losses, but data released since then indicates the fallout will spread through the British economy and the rest of Europe.
"After the UK referendum, we are increasingly biased toward a risk-off stance," said Matteo Germano, global head of multi-asset investments at Pioneer Investments.
"Scarce visibility on the political front leads us to take an even more cautious approach toward equities - especially in developed markets and Europe."
The poll showed equity holdings at 42.9 percent in investors' global balanced portfolios, down from 45.6 percent in June - the lowest in at least five years.
At the same time, they raised the weighting of bonds to 40.9 percent from 38.1 percent in June, also the highest level in at least five years.
Boris Willems, a strategist at UBS Asset Management, said uncertainty over the full economic implications of Brexit was keeping investors jittery.
Within equity portfolios, investors cut exposure to U.S. stocks by just over two percentage points to 38.4 percent, possibly taking profit after a strong rally.
The S&P 500 (.SPX) is up over 6 percent so far this year and reached all-time highs in July.
UK equity allocations held steady at 11.5 percent and holdings of eurozone stocks edged up one percentage point from June to 19.2 percent.
Peter Lowman, chief investment officer at UK-based wealth manager Investment Quorum, said loose monetary policies would continue to stimulate equity markets, but it was likely to be "a roller-coaster ride" over coming months. "Equities are likely to remain volatile but rewarding," he said.
Global fund managers also trimmed property allocations to 2.4 percent from 2.9 percent in June. However, the drop was bigger among British funds, which on average almost halved holdings of property from the previous month to 3.8 percent.
Real estate is expected to be one of the biggest victims of Brexit, with prime housing and commercial property prices in London already moving lower. Several property funds have suspended trading after a wave of redemption requests following the June 23 vote.