Hot on the heels of elections in France, and in a US election year, the Association of Investment Companies (AIC) has looked at how asset allocation has changed over the last twelve months.

Above all, the US has been the biggest winner, with some investment companies increasing their exposure over the last year, sometimes very significantly in the Global Growth sector.

Interestingly, the US was the region most widely predicted to outperform in last year's AIC fund manager poll.

France has been the biggest casualty, with a number of European investment companies reducing exposure significantly. But despite the doom and gloom around the UK economy, some investment companies have been increasing their exposure to UK companies over the last year.

Big on Uncle Sam
Companies increasing their exposure to the US the most (5% change or more comparing end April 2011 with end April 2012) were: Martin Currie Global Portfolio (36% increase, from 15% a year ago to 51%), importantly this company changed its investment objective and benchmark to emphasise a more global approach, JPMorgan Overseas (12% increase, from 20% a year ago to 32%), Miton Worldwide Growth (7% increase, from 13% a year ago to 20%), Polar Capital Technology (6% increase, from 64% a year ago to 70%), JPMorgan Elect Managed Growth (6% increase, from 25% a year ago to 31%).

Of course there were some exceptions: reduced exposure to the US included Scottish Mortgage (5% decrease, from 33% a year ago to 28%). See table on page 3 for asset allocation levels.

Retreat from France
France has been one of the biggest casualties in asset allocation terms over the last year, with several investment companies taking money off the table. BlackRock Greater Europe decreased its exposure to France substantially, from 29% a year ago to 15% at 30 April 2012. European Investment Trust has also reduced exposure to France by some 8%, trimming exposure from 21% a year ago to 13%.

Outside the European sectors, Polar Capital Global Healthcare Growth & Income was another AIC member reducing exposure to France, from 8% a year ago to 3%.

However JPMorgan European Smaller Companies has increased investment exposure in France from 8% a year ago to 15% at the end of April.

Increasing UK exposure
Several investment companies have been steadily increasing their exposure to the UK. Amongst the European investment companies, JPMorgan European Income has significantly increased their exposure to the UK from 31% a year ago to 44% at the end of April.

Interestingly, two commodities and natural resources investment companies have increased their exposure to the UK, namely BlackRock World Mining (from 34%* a year ago to 44%), and City Natural Resources High Yield (from 11% a year ago to 16%).

Looking at the Global Growth sector, Alliance Trust increased its exposure to the UK by some 11%, from 34% a year ago to 45%.

Cayenne Trust upped its stake in the UK by 10%, from 26% a year ago to 36%.

Monks Investment Trust has increased its exposure to the UK by 8%, from 17% a year ago to 25%, alongside Mid Wynd International (from 22% a year ago to 30%, an 8% increase).

However, some companies significantly decreased their exposure to the UK.

Personal Assets Trust reduced UK exposure, from 26% a year ago to 19% at the end of April, a 7% reduction, and Foreign & Colonial, which reduced its exposure to the UK from 42% a year ago to 37%, a 5% reduction.

Annabel Brodie-Smith, communications director, AIC said: "As leaders prepare to gather for the G8 summit, it's interesting to look at how asset allocation has changed over the last year. Many G8 countries have borne the brunt of the global financial crisis and there have been some significant asset allocation changes.

"Whilst it's useful to look at asset allocation changes, it's worth remembering that they do not tell the whole story.

"For example an investment company often reduces or increases exposure to a certain country due to individual company fundamentals, not geographical fundamentals and countries that have struggled may well have strong performing companies.

"The AIC produces a wide range of data on country and sector allocation, top holdings, performance, and more, and it's important that investors do not look at any one piece of information in isolation."

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