U.S. funds cut recommended equity allocations in August and increased exposure to debt, a Reuters poll found, largely maintaining a broad trend since the start of the year as stocks underperform and government bonds remain in demand.
Fund managers also cut cash allocations for a fourth consecutive month to under 4 percent of the global model portfolio to try and eke out some returns.
They lowered equity holdings to 52.6 percent, raised bond holdings to a record high of 37.7 percent and cut cash holdings to an 18-month low of 3.8 percent.
Both the Standard & Poor's 500 .SPX and Dow Jones .DJI indices have fallen below the level where they began the year, while bond yields have barely risen over the past eight months.
A deteriorating outlook for China, where a surprise yuan devaluation sparked a global equity selloff and led major indices including the Dow to multi-year lows, at least temporarily, has not helped.
Overall, fund managers cut Asia ex-Japan equity holdings along with U.S. and Canada.
They trimmed the percentage allocated to the euro zone despite talk of an increase to the current 60 billion euros ($68 billion) a month of asset purchases.
The Fed is still expected to raise rates for the first time in almost a decade, although the timing of that move is now uncertain.
William Dudley, New York Fed President, effectively ruled out a September rate hike on Wednesday saying it seemed 'less compelling' than a few weeks ago.
Financial market volatility over the past week has also caused some major global banks such as Barclays and UniCredit to push expectations of a U.S. Federal Reserve rate hike from September to later in the year or even early 2016.
That is broadly supportive of the continued high allocations to fixed income, particularly sovereign debt.
The model bond portfolio showed U.S. and Canadian bond holdings rose to 73 percent, with UK and Japanese holdings down significantly.
Just under half of all bond holdings in the model portfolio were government securities, the most risk-averse debt option for investors, and investment grade paper made up about a third of recommended fixed-income investments.