By Tushar Goenka and Hari Kishan

BENGALURU (Reuters) – Global funds recommended cutting equity allocations to the lowest since early 2010 and increasing bond holdings to their highest since then, according to a September Reuters poll which found a correction in world stocks before year-end was likely.

Volatility in equity markets resurged this month ahead of the November U.S. election and as the death toll from COVID-19 rose past 1 million – a bleak statistic in a pandemic that has devastated the global economy.

(Reuters interactive graphic: https://tmsnrt.rs/2VqS5PS)

While U.S. stocks are set for their first monthly decline since March, the S&P 500 and Nasdaq are still on course for their best two-quarter winning streak since 2009 and 2000, respectively.

The Reuters Sept. 15-29 poll of 35 wealth managers and chief investment officers in the United States, Europe and Japan showed a cut in equity allocations to an average 42.7% of the model global portfolio, down from 43.1% in August.

At the start of the year, recommended global equity allocations were at an average 49.7%, the highest in nearly two years but have been cut gradually since. September’s was the lowest since comparable polling began in early 2010.

“The market remains at risk of a deeper correction, both because of the several macro and geopolitical risks – COVID-19, U.S. election, U.S.-China frictions – and the fragile structure of the market itself,” noted the investment team at Generali Investments Partners.

Over 70% of 21 funds who provided a view said a correction in world stock markets by end-year was likely.

“We are entering the autumn months which historically has been a period that can be gratifying or disagreeable with investors,” said Peter Lowman, chief investment officer at Investment Quorum in London.

“This year we have to contend with the possibility the

BENGALURU (Reuters) – Global funds recommended cutting equity allocations to the lowest since early 2010 and increasing bond holdings to their highest since then, according to a September Reuters poll which found a correction in world stocks before year-end was likely.

Traders work on the trading floor of the Philippine Stock Exchange amid the coronavirus disease (COVID-19) outbreak, in Taguig City, Metro Manila, Philippines, September 30, 2020. REUTERS/Eloisa Lopez

Volatility in equity markets resurged this month ahead of the November U.S. election and as the death toll from COVID-19 rose past 1 million – a bleak statistic in a pandemic that has devastated the global economy.

(Reuters interactive graphic: tmsnrt.rs/2VqS5PS)

While U.S. stocks are set for their first monthly decline since March, the S&P 500 and Nasdaq are still on course for their best two-quarter winning streak since 2009 and 2000, respectively.

The Reuters Sept. 15-29 poll of 35 wealth managers and chief investment officers in the United States, Europe and Japan showed a cut in equity allocations to an average 42.7% of the model global portfolio, down from 43.1% in August.

At the start of the year, recommended global equity allocations were at an average 49.7%, the highest in nearly two years but have been cut gradually since. September’s was the lowest since comparable polling began in early 2010.

“The market remains at risk of a deeper correction, both because of the several macro and geopolitical risks – COVID-19, U.S. election, U.S.-China frictions – and the fragile structure of the market itself,” noted the investment team at Generali Investments Partners.

Over 70% of 21 funds who provided a view said a correction in world stock markets by end-year was likely.

“We are entering the autumn months which historically has been a period that can