Global funds recommended an increase in equity exposure in October to obtain better returns at a time when stocks and bonds have rallied simultaneously on policy easing and monetary stimulus offered by major central banks, a Reuters poll found.

That comes after these same global fund managers have ruled stocks out of favour for six months in a row on growth concerns, intensified by the US-China trade war.

While risks from the trade war and Brexit uncertainty have not completely diminished, recent optimism that Washington and Beijing will call a truce, along with expectations for further monetary policy easing, have pushed up stocks.

The S&P 500 closed at a record high for the second time in three sessions on Wednesday after the US Federal Reserve, as expected, cut interest rates by a quarter of a percentage point to range of 1.50% to 1.75%, while signalling it was done easing for now.

While the Oct. 8-29 poll of 37 asset managers was taken ahead of the Fed meeting, a rally in bond prices pushed global investors in search of better returns to increase their exposure to equities to an average 46.2% from 44.3% in September.

At the same time fund managers suggested a cut to fixed income holdings in a model global portfolio to 41.9% from 42.1% and cash levels to 5.9% from 7.6% in September.

All but one of 24 fund managers who answered an additional question said the prospect of global monetary easing was still a net positive for equities in the near-term.

The Bank of Japan and the Bank of Canada were the latest major central banks to signal the chance of a future rate cut, after the European Central Bank restarted its printing presses last month.

Still, separate Reuters polls of over 500 economists covering more than 45 major economies showed a steeper decline in global economic growth was more likely than a synchronized recovery, despite expectations for rounds of monetary easing by major central banks.

That lines up with responses to a separate question put to asset managers in the latest poll that showed a majority would roughly maintain the current risk positioning, suggesting fears of a recession have not been allayed yet.

"Currently we have a cautious stance and we expect to maintain that. It is important to highlight the fear of recessionary risks could actually lead to a recession, which could be directly negative for risk assets," said Pascal Blanqué, chief investment officer at Europe's largest asset manager, Amundi, in Paris.

"Should central banks implement aggressive measures to avoid a recession and fiscal measures also step in we could see another leg up for risky assets."

While a majority of funds said their strategy for the next six months would be driven by the Fed's policy path and trade war developments, debate among policymakers in the United States and Japan on further policy easing highlights the struggle many central banks are currently facing.

Even with risks aplenty, major central banks are mostly reluctant to ease policy aggressively because interest rates are already very low, or in some cases negative.

The US central bank cut rates for the third time this year on Wednesday, which it sold as insurance to help the economy weather the risks from the global trade war, highlighting the importance of the trade outlook to the global economy.

But Fed Chair Jerome Powell signalled additional cuts were unlikely because economic data so far has remained steady.

"The markets are questioning how much fuel is left in the monetary stimulus tank with negative interest rates a common feature of global government bond markets," said John Husselbee, head of multi-asset at Liontrust, in London.

While latest data showed US economic growth slowed less than expected in the third quarter, the trade war with China has eroded business confidence, contributing to the second straight quarterly contraction in business investment.

The cancellation of the Asia-Pacific Economic Cooperation summit scheduled for mid-November further dented hopes of a resolution to the 15-month trade war as the market has been expecting the United States and China to sign a partial trade deal there.

"We are encouraged by the progress on trade negotiations, but we will remain cautious on the equity market until we see greater clarity," said Alan Gayle, president at Via Nova Investment Management in Washington, D.C.

"The prolonged uncertainty has pushed many companies to delay capital investment. Until that fog of uncertainty is lifted, we will remain cautious."