US fund managers recommended cutting cash holdings to 13-month lows in their model global portfolio in June, a Reuters poll found, as they looked to take advantage of monetary stimulus by major central banks overseas. Recommended cash allocations were trimmed to 4.4 percent, the lowest since May last year. Alternative investments - including commodities, hedge funds and private equity - rose to a three-year high of 4.6 percent.
Equities made up 54.8 percent of the average model global portfolio in June, down from 55.4 percent in May. Bond holdings rose to 35.3 percent from 34.7 percent in May.
Cash is typically built up as a buffer against market volatility. A cut in cash suggests investment firms are looking through the latest worries over Greece's future in the euro, which worsened toward the end of the month.
Greece is almost certain to default on a debt repayment due later on Tuesday, and its euro zone membership will be put at risk by a referendum on July 5 about whether to accept creditors' proposals on an aid-for-reform deal.
But even with all the political drama, fund managers say stimulus programmes from the European Central Bank and the Bank of Japan make assets in those regions look attractive.
"Even if Greece somehow falls out - and it looks a lot closer now than it did even last Friday - the European economies will be fine overall," said Lorne Johnson, fund manager at SSGA.
Regional breakdowns suggested fund managers preferred Asian and European assets - both equities and bonds - to US and Canadian securities.
"That reflects our view on the relative policy stimulus being provided," said SSGA's Johnson. "Whereas the US central bank at some point in the next six months or so will probably begin raising interest rates, in contrast, in Europe and in Japan the asset purchase programmes are just getting started."
He also noted that US company earnings have been hurt by the rising dollar, which is also reducing appetite for taking on further exposure to US equities.
Within the fixed-income portfolio, fund managers have increased their recommended allocation of sovereign debt and high-yielding paper at the expense of investment-grade credit.
The allocation in government securities was the highest this year at 42.2 percent.
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