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WRAPUP 1-Global funds raise equities to near 2-year highs

* Equity holdings at 47.9 pct, highest since Nov. 2015

* Euro zone stocks at 20.6 pct, fresh five-year highs

* Majority say euro not overvalued; split on UK rate hike

* For poll data: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/asset-allocation-polls

LONDON, Sept 29 (Reuters) - World stocks are set for the longest quarterly run of gains since 1997, and investors' enthusiasm for shares appears undimmed, with a Reuters poll showing average equity exposure in portfolios at the highest in almost two years.

The monthly asset allocation survey of 50 fund managers and chief investment officers in Europe, the United States, Britain and Japan was conducted between Sept. 15-27, a month when MSCI's all-country world index hit fresh record highs. The Bank of England and the U.S. Federal Reserve also suggested rate rises were on the cards.

The index has enjoyed 11 straight months of gains - its longest winning streak since 2003-4. It is up 15 percent year-to-date, despite the rate rise talk and tensions between the United States and nuclear-armed North Korea.

The poll showed investors raising their overall equity allocation to 47.9 percent, a near two-year high, while cutting bond holdings to 39.8 percent, the lowest level since April.

Since the start of the year, investors have added 2.1 percentage points to their overall equity exposure, preferring to focus on the recovering world economy.

"Despite some signs of weakness in the global economy in recent weeks, it still appears to be growing above market expectations," said Peter Lowman, chief investment officer at UK-based wealth manager Investment Quorum.

"Excluding any unforeseen geopolitical confrontations, this should be a good environment for global equities, given that we appear to be in a Goldilocks economy."

A number of investors did express concern about complacency, especially as the Fed and the European Central Bank are seeking to wind down their asset buying programs. Nadege Dufosse, head of asset allocation at Candriam, said this tightening bias would test the resilience of equity markets.

"In particular, the resilience of European equity markets in the context of a stronger euro will be tested," she said.

EURO STRENGTH

Investors remained bullish on European stocks, having raised their euro zone equity holdings by almost 4 percentage points since the start of the year.

The exposure now stands at 20.6 percent of their global equity portfolios, the highest in at least five years. European stocks are up almost 7 percent year-to-date and look set to end the quarter up around 1.8 percent.

Some 77 percent of poll participants who answered a question on the euro said it was not overvalued at current levels, although the currency has firmed around 1 percent over the month against the dollar.

Jean Medecin, a member of the investment committee at Carmignac, said receding political risks in Europe had unleashed a surge of optimism and spurred investment.

"Euro strength since the beginning of 2017 is a reflection of the growth shock witnessed by the eurozone," he said.

Some managers suggested the euro had further to go.

"The euro zone has been treated as a basket case by the financial markets for a number of years, leaving the euro unloved and under-owned, but the economy is consistently surprising on the upside," said Rob Pemberton, investment director at HFM Columbus.

Poll participants who answered a question on the Bank of England were evenly split on whether it would raise rates before the end of the year, even though the bank's governor has said a "near-term" move is likely.

And many of those who said it would raise rates stressed this was unlikely to be the start of a major tightening cycle, but rather a reversal of the rate cut after the Brexit vote.

"Very modest action in 2018 and 2019 remains the order of the day, as the Bank balances a sluggish economy, some inflation pressures, the vagaries of sterling, political developments from the Brexit negotiations, and actions by other central banks," said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.

CRYPTOCURRENCY

There was more consensus on whether bitcoin or other cryptocurrencies fitted into a modern investment portfolio, with an overwhelming 75 percent saying they did not.

Virtual currencies have undergone a volatile period, with China cracking down on exchanges and digital coin-based fundraising while the chief executive of JPMorgan, Jamie Dimon, called the cryptocurrency a "fraud."

Bitcoin prices tumbled 12 percent in September, though they are up more than 300 percent this year.

Raphael Gallardo, a strategist at Natixis Asset Management, called bitcoin "a highly speculative asset with an unreliable market infrastructure."

"In an unstable world, governments will not tolerate the further development of bitcoin as it is an unbreakable way of laundering money and financing illegal activities," he said.

Instead, governments and central banks would develop cryptocurrencies under their own control and oversight, he predicted.

"While cryptocurrencies are probably here to stay, they are difficult to analyze, wildly volatile and some may be prone to fraud," added Trevor Greetham, head of multi-asset at Royal London Asset Management.

"The speculative surge in bitcoin looks like a side effect of excessive liquidity in markets, like dotcoms in the 1990s." (Reporting by Claire Milhench and Maria Pia Quaglia Regondi; Editing by Andrew Bolton)