UK equity allocations from multi-managers rose to their highest level since the 2016 EU referendum in Q4 2019, according to research from Harrington Cooper, with average exposure to the region having increased by 1.3% to 16.8% compared to the previous quarter.
The firm said it is "no surprise" three UK equity funds with exposure to domestic sectors - JOHCM UK Dynamic, Liontrust Special Situations and Marlborough Multi Cap Income - found themselves on the list of the most commonly-held funds during Q4 2019.
The research comes from Harrington Cooper's 'proprietary asset allocation tracker', which monitors the asset allocation of 31 balanced-risk multi-manager funds, whose combined assets under management amount to £10.4bn.
"[Q4 2019] saw UK equity allocations rise to their highest level since the 2016 EU referendum.
"This was likely driven by the UK General Election result, which removed a large degree of political uncertainty and laid the groundwork for the successful passage of the UK withdrawal bill," the firm said.
"[Inflows into] JOHCM UK Dynamic, which has a bias to UK consumer and financial services; Liontrust Special Situations, which also invests in UK companies with an overweight in industrials; and finally Marlborough Multi Cap Income suggests growing appetite for UK assets."
Global equity funds also fared well, with multi-managers upping their exposure to the market area by 0.5% between Q3 2019 and Q4 2019 to an average exposure of 9.6%, which Harrington Cooper suggested was the result of US President Donald Trump announcing that a first-stage trade agreement with China would be signed on 15 January 2020.
Elsewhere, fixed income allocation fell slightly in Q4, despite 2019 being a strong year for the asset class overall.
While multi-manager allocation to gilts, sovereign bonds and investment-grade bonds changed little, exposure to non-investment grade bonds fell by 0.4%.
Four fixed income funds that featured in Harrington Coopers most-held list in Q3 - Royal London Short Duration High Yield Bond, iShares Overseas Corporate Bond, Nordea 1 Low Duration European Covered Bond and Royal London Sterling Credit - have lost their place.
Alternatives and property were out of favour among multi-managers throughout last year and Q4 proved to be no exception, with multi-manager reducing their exposure by a respective 0.3% and 0.1%.
Exposure to commodities, infrastructure and private equity funds also dipped by 0.5% compared to Q3 findings.