The latest survey of their intentions by Smith New Court, the securities house, shows many plan to increase exposure to UK, US and Japanese equities in March.
But the SNC survey shows continued disillusionment with bonds. Seventeen per cent more managers are planning to decrease holdings of UK gilt-edged bonds than are planning to increase investments.
Japan is attracting great attention, with a big majority of fund managers planning to add to their holdings. The Nikkei index is still 48 per cent below its record, but it has increased in value by 11 per cent over the past 12 months. Despite this, Tokyo shares have underperformed the world average increase of 18 per cent.
European equities are out of favour because of recession on the Continent. European shares found followers late last year, but in 1994 more fund managers have been decreasing exposure than have been increasing. Germany and Switzerland are particularly disliked, but France and Italy are viewed more promisingly.
The SNC poll says that UK pension funds have 58 per cent of their assets invested in UK shares, 6 per cent in US shares and 6 per cent in UK gilts. About 9 per cent of funds are invested in European equities and 5 per cent in Japanese shares.
Second-line stocks remain the favourite investment for buyers of UK equities. Nearly 60 per cent prefer FT-SE 250 shares against 34 per cent who prefer the FT-SE 100.
Institutional investors are also bullish about short-term prospects for the UK economy. Nine out of 10 respondents believe the economic climate will improve during the next 12 months. Only 2 per cent think things will get worse.
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