Financial advisers are recommending their clients consider higher overseas equity allocations in the near term, according to the results of Russell Investments' new quarterly Financial Professional Outlook survey.

More than half, 53%, of the 900 respondents have increased asset allocations to emerging market equities and about the same number of advisers, 49%, have invested in Eurozone companies.

Domestically, advisers are looking decidedly more conservatively at large-cap value (39%) and large-cap growth (37%).

Rod Greenshields, consulting director at Russell's private-client services group, noted that foreign equities have looked very attractive compared with recent domestic returns. Emerging markets, currently around 11% of the global economy, are expected to propel worldwide growth.

Even when taking riskier emerging markets out of the equation, splendid isolation is no longer an option for investors, Greenshields said.

The global economy is now evenly split between U.S. and non-U.S. markets, and while the U.S. is still a major player, its market share will erode with time, especially as emerging markets become less volatile and more accessible.

Assets for these investments seem to be coming from safer investments, and advisers plan to reallocate Treasuries (47%), high-yield bonds (33%) and cash (33%) over the next year.

"Fear is softening," Greenshields said.

"There is still a lot of hesitancy, but because the global economy kept on going [despite the crash], that has encouraged investors to dip a few more toes in the water."

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