By David Randall
NEW YORK (Reuters) - U.S. fund managers cut equity weightings in their model global portfolios to the lowest level in four months in February even as the benchmark Standard & Poor's 500 hit new record highs, according to a Reuters poll.
The latest findings suggest that the rally in U.S. shares over recent weeks has been driven by dealers and brokers, not long-term investors. Some fund managers are noticing the disconnect between market performance and companies themselves.
"Earnings have not been growing as much as the market has, and stocks are pretty fully valued," said Steven Bleiberg, the head of asset allocation at Legg Mason.
Instead of adding to positions in the United States, Bleiberg has actually moved money into emerging markets where stocks have plummeted along with their currencies and offered more bargains.
The percentage of equities held in global model portfolios fell to 56.2 percent of assets in February, according to the monthly poll. While only a slight drop from 56.4 percent in January, it was the lowest percentage in model global portfolios since 55.9 percent in October.
That compares with an average of above 60 percent about a year ago. The weighting has been declining since then even as the U.S. stock market has continued to hit record highs.
The poll of 12 asset management firms, with more than $3 trillion (1.79 trillion pounds) under management combined, was conducted on February 12-27.
Recommended holdings by U.S. fund managers of euro zone stocks rose to 15.2 percent of assets, the highest in more than three years.
The largest declines came in the percentage of assets invested in Japanese stocks, which fell to 4.6 percent of a model portfolio. Japan's benchmark Nikkei index is down 7.6 percent so far this year. It has rallied 43 percent since late 2012.
The rally in U.S. stock markets has continued.
The S&P 500 closed at a record high on Thursday after Federal Reserve Chair Janet Yellen lent support to the view that recent evidence of weaker U.S. economic performance was at least in part because of exceptionally harsh winter weather.
Investors are in a "really tough situation with respect to the effect of weather on the economic data. You have to ask if it's a glass half full or a glass half empty," said Douglas Gordon, senior investment strategist at Russell Investments.
Recommended bond holdings hit a four-month high but regional allocations did not move much.
The percentage of bond portfolios invested in the United States and Canada dipped 0.3 percentage points, to 66.5 percent of assets, while no other category moved by more than 0.2 percentage points in either direction.
Cash holdings fell slightly, to 3.7 percent of assets from 3.8 percent the month before.
(Polling and analysis by Anu Bararia and Hari Kishan; Editing by Susan Fenton)