A monthly Reuters poll of 12 UK-based fund managers and chief investment officers found the average allocation to equities in balanced portfolios rose more than a percentage point in June to 55.2 percent from 53.8 percent.

Much of the increase came at the expense of bonds, allocations to which dropped to 22.8 percent from 23.9 percent a month earlier.

Cash and property holdings were little changed at 6.4 percent and 3.8 percent respectively, with allocations to alternatives such as hedge funds, private equity and commodities down to 11.7 percent in June from 12.2 percent a month before.

Signs the UK economic recovery is gathering pace helped boost allocations to Britain in global equity portfolios to 29.6 percent from 27.3 percent. Allocations to stocks in the United States meanwhile dropped to 28.6 percent in June from May's 29.9 percent in the average global equity portfolio.

Extra stimulus from the European Central Bank, which cut euro zone deposit rates to negative levels this month, has helped stoke demand for riskier assets such as equities.

Investors are warning against the dangers of complacency, however, and pointed to the possibility markets may be fully valued and headed for a correction.

"I am becoming uneasy about the increasing correlation between what are now fully valued asset classes, and also by the gradual fall in volatility in equity, bond, commodity and FX markets to dangerously complacent levels," said Rob Pemberton, Investment Director at wealth management firm HFM Columbus.

Wall Street's 'fear index', the CBOE Volatility Index <.VIX>, remains close to levels last seen before the financial crisis roiled markets after hitting a seven-year low earlier this month and at nearly half its historical average.

Others pointed to further geopolitical shocks as possible triggers for an end to the market buoyancy seen so far in 2014.

"Whilst global equities remain the only game in town, clearly the hostilities in Iraq, the recent hawkish comments on UK interest rates from Bank of England (governor) Mark Carney, and the downgrading of global growth from the World Bank and the International Monetary Fund has created a headwind for most asset classes," said Peter Lowman, Chief Investment Officer at Investment Quorum.

Europe poll table and story [EUR/ASSET]

U.S. poll table and story [US/ASSET]

Japan poll table and story [JP/ASSET]

(Editing by Catherine Evans)

By Chris Vellacott