Japanese fund managers kept their overall exposure to stocks steady and trimmed their bond holdings in December, a Reuters poll showed. Respondents on average allocated 39.1 percent of the model portfolios to stocks in December, unchanged from November. December was a challenging month for equities, with global economic growth concerns adding to existing investor worries such as the trade war between the United States and China.

MSCI's gauge of global stocks has declined 7 percent so far in December, touching its lowest since May 2017. "In addition to the US-China trade war's impact on corporate performance, the Fed's stance on monetary policy, slowing growth in emerging markets and Brexit are likely to keep weighing on equities," said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.

The fund managers kept their exposure to key equity markets unchanged from the previous month, with holdings of Japanese, North American and euro zone stocks steady at 48.8 percent, 28.7 percent and 13.2 percent, respectively. The respondents shaved their overall exposure to bonds to 53.8 percent in December from 54.0 percent in November. They nudged up their North American bond holdings to 30.7 percent in December from 29.5 percent in November, while trimming Japan bond exposure to 41.3 percent from 42.0 percent.

Copyright Reuters, 2018