Investors pulled back from equities in favor of bonds and cash in February, Reuters polls showed on Monday, reacting to the Middle East and North African revolts and to a large run-up in stock market gains.

Surveys of 54 leading investment houses in the United States, Europe ex UK, Japan and Britain showed the average equity holding falling to 53.6 percent of a balanced portfolio from 54.2 percent in January.

Bond holdings rose to 34.2 percent from 33.7 percent and cash went to 4.6 percent from 4.1 percent.

The moves, while significant, still left exposure to stocks at a higher level than it was for most of last year, suggesting that there has been a cautious pull-back from risk rather than a flight to safety.

While the global economy continues to recover on the back of improvements in the United States, in the short term, with less positive trading factors ... it's highly likely that the stock market may be headed for a correction, said Yoshinori Nagano, a senior strategist at Daiwa Asset Management.

Equity markets shot up in the first six or so weeks of the year, in some cases overtaking the annual projections made by analysts at the end of 2010.

Combined with uncertainty over what a series of popular revolts in North Africa and the Middle East will mean to the price of oil, this prompted a mild sell-off at the end of the month.

The poll also showed other pull-backs from risk. The percentage of a bond portfolio in high yield debt, for example, dropped to 11.5 percent from 12.9 percent.

There was little indication, however, that investors were expecting anything more than a short correction. In terms of weighting versus a benchmark, the respondents were still at the third highest overweight in the past 12 months.

REGIONALLY

U.S. fund managers cut both equities and bonds in favor of alternatives such as commodities and hedge funds.

The 14 fund management firms held an average of 64.0 percent of their assets in equities, down a touch from 64.1 percent in January. They scaled down their bond allocations to 28.0 percent from 28.6 percent the previous month.

One winner for the month was the relatively low category of alternatives, which includes hedge funds and commodities. Firms held 3.3 percent of their assets in alternatives, up from 2.5 percent in January.

European fund managers lifted their cash holdings for a second month in a row and added bonds. The survey of 16 Europe ex-UK asset management firms showed a typical mixed portfolio holding 48.6 percent in equities, the lowest since October last year, from a one-year high of 50.1 percent last month.

Bond holdings, which include government and corporate debt, rose to 38.5 percent of asset managers' portfolios, up 1 percentage point since January. Cash holdings edged up to 6.1 percent from 6.0 percent.

Japanese fund managers cut their global stock weightings to a five-month low in February. The average weighting for global equities dropped 0.8 percentage points to 46 percent.

They also cut their bond weightings for a second straight month and lifted their cash allocation to a seven-month high, citing spreading unrest in the Middle East and concerns about inflation in emerging markets in Asia.

British fund managers nudged up allocations to cash and bonds at the expense of alternatives, and trimmed equities.

The UK survey of 11 investment managers showed the average allocation to bonds in global balanced portfolios jumped to 22.8 percent from 21.1 percent in January, while exposure to alternatives such as hedge funds dropped to 14.1 percent from 16.1 percent.

Allocations to cash rose to 5.4 percent from 4.7 percent -- the first monthly increase since July. Equities allocation slipped to 55.6 percent from 55.9 percent.

(Additional reporting by Caroline Copely and Sinead Cruise in London, Jennifer Ablan in New York, Antoni Slodkowski in Tokyo, and Bangalore Polling Unit; editing by Stephen Nisbet)

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