Goldman Sachs has downgraded its outlook on equities to "neutral" over the next 12 months, saying there's no particular reason to own them.
"Until we see sustained signals of growth recovery, we do not feel comfortable taking equity risk, particularly as valuations are near peak levels," Goldman said in a note Tuesday.
Goldman downgraded Europe and Japan equities to "neutral" over a 12-month view, while upgrading U.S. equities to "neutral."
"The Fed has been more dovish than we initially expected, and market impact and realization of policy divergence has slowed, creating a boost to the U.S. relative to Europe and Japan," it said. "A strong yen and euro are weighing on European and Japanese earnings, while negative rates weigh on their financials."
Central bank policy is expected to diverge as the U.S. Federal Reserve is expected to increase interest rates this year, while the European Central Bank and the Bank of Japan are expected to continue to ease. But Goldman said it may be easier to play that theme through currencies than equities as foreign exchange tends to be less volatile than stocks.
The bank is also neutral on Asia ex-Japan equities, saying that while China economic data have been better than expected since the start of the year, it believed risks remained.
Goldman said it prefers credit to equity, with valuations less stretched, particularly in the high-yield segment.
It's staying overweight on credit on both three-month and twelve-month horizons.
"U.S. high-yield credit still offers high potential carry and wide spreads provide a buffer for higher rates," Goldman said.
Goldman isn't alone in stepping away from equities.
The Bank of America-Merrill Lynch fund manager survey for May found that global fund managers have cut their allocation to equities to a net 6 percent overweight, from a net 9 percent overweight last month, well below the long-term average.
Regionally, the survey found that allocation to U.S. equities fell to a net 18 percent underweight from a net 10 percent underweight last month, marking the 15th straight month that fund managers were underweight the segment.
Japan stock allocations were also at their lowest level since December 2012 at a net 6 percent underweight, the survey found.
Fund managers were more positive on euro zone equities at a net 26 percent overweight, but even that allocation fell to a 17-month low. Allocations to U.K. equities dropped to a net 36 percent underweight this month, the lowest since November 2008, during the global financial crisis, the survey found.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter