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"That's a trend that's been going on and they are increasing their allocation".
He voiced concern about the number of large institutions, like endowments and pension funds that are reducing their exposure to stocks but increasing their allocation to private equity — high-fee pools of capital that are buying up large-cap stocks at large premiums.
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Pensions and endowments, typically a sticky asset base, are increasing their allocations to hedge funds.
As their stocks increase in value, pension funds may increase their allocation of funds to real estate, to keep it a fixed portion of their portfolios, he said.
Pension funds have increased their allocation to property, retail investors are starting to take an interest, and foreign money continues to pour in.
Mr. Jen notes that since 2003, American mutual funds have increased their allocation of overseas equities from 15percentto22.5percentcent, a pace he describes as "gradual but determined".
If the world's biggest investors increased their allocation to such bonds by just a little, it could easily drive yields down.
According to a study earlier this year by Greenwich Associates, about one-third of institutional investors in America plan to increase their allocation to such funds.
Two of the firms advise clients to increase their allocation to American shares substantially, while four say that it is time to take profits.
Ms Patel says: "It will take some years before investors are confident enough to increase their allocation to these specialist funds".
Investors also reduced their exposure to other economies deemed likely to follow the Brazilian example, but increased their allocation of money to other markets that, like Brazil, are closely linked to Chinese growth.
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