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WRAPUP 1-Global funds raise stocks to two-year high, betting bull run will continue

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* Equities raised to 48.1 pct, highest since Nov. 2015

* Cash cut to 4.4 pct, lowest since March 2013

* Two-thirds say global equity bull run won't end in 2018

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

LONDON, Nov 30 (Reuters) - Global investors raised their stock holdings to a two-year high in November, a Reuters poll showed on Thursday, chasing an equity bull market that over two-thirds of respondents see continuing throughout next year.

They cut their U.S. equity exposure to the lowest level since April 2016 after a strong run, whilst adding to Japanese and emerging market stocks.

Reuters' monthly asset allocation survey of 53 wealth managers and chief investment officers in Europe, the United States, Britain and Japan was conducted between Nov. 14-28, a time when world stock markets powered to record highs.

Investors boosted overall equity exposure to 48.1 percent of their global balanced portfolios, the highest since November 2015, and up 2.3 percentage points since January.

At the same time they cut cash levels to 4.4 percent, the lowest since March 2013, chasing a global equity bull run that 70 percent of respondents saw continuing throughout 2018.

Robeco strategist Peter van der Welle was amongst those maintaining an overweight in equities, despite noting the market was "playing in extra time".

"In the absence of a near-term recession trigger, current stretched equity valuations do yet not instill enough fear to change overall market direction," he said. "Thus, the positive stock market momentum could be sustained in 2018, increasingly driven by earnings growth."

Within their global equity portfolios, investors cut their U.S. exposure by 2.5 percentage points to 38.3 percent.

Several remarked on stretched valuations, with the S&P 500 up over 17 percent year-to-date and the tech sector up around 35 percent.

Instead they raised their Japanese stocks exposure by 1.3 percentage points to 18.2 percent, a one-year high, and emerging market equities to 13.6 percent, from 12.5 percent last month.

Japan's Topix index surged to a near 11-year high in early November on strong earnings hopes, whilst emerging market equities are up over 30 percent year-to-date.

Cedric Baron, head of multi asset at Generali Investments, said he expected the Japanese market to perform well thanks to an improving economic environment, strong corporate earnings growth, a positive political landscape following the elections, and international flows turning in the region.

Meanwhile David Vickers, senior portfolio manager at Russell Investments, said that provided the globally synchronised growth narrative continued, emerging market assets could continue to outperform.

TAMING POPULISM

Investors were also fairly phlegmatic about the outlook for Europe after political risks failed to materialise in 2017, raising their euro zone bond holdings to 29.6 percent and holding their euro zone stocks exposure at 19.6 percent.

A slim 53 percent majority of poll participants who answered a question on next year's Italian election, where right-wing and anti-establishment parties could be among the leaders, said it did not increase the risks of holding euro zone assets in 2018.

"Europe is not in the same place it was at the beginning of 2017," said Mouhammed Choukeir, chief investment officer at Kleinwort Hambros, arguing that elections in France and the Netherlands had helped shore up sentiment for the euro zone.

"A flying economic recovery - particularly in Italy - has been crucial to tame the populist forces. That is not to say that Italy does not have serious problems ... However, the base case is not for firebrand populists to lead Italy out of the eurozone."

Other managers said the risk was increased, but only to a limited extent, or not to a level that would make them reduce their exposure. Francois Savary, chief investment officer at Prime Partners, was among several who said he was more focused on Germany and its attempts to form a stable coalition.

On the fixed income side, managers trimmed their overall bond exposure to 40 percent of their global balanced portfolios.

Some 57 percent of poll participants said the bull run in junk bonds was over, with the sector suffering billions of dollars of outflows in recent weeks, and yields falling to record lows on some bonds.

Yet high yield debt still accounted for 12.2 percent of managers' global bond portfolios, up from 11.6 percent in October.

Investors' responses reflected this dichotomy. Vincent Chaigneau, head of research at Generali Investments, said that on the one hand, the growth outlook remained benign, the search for yield remained acute, and wage pressures were still contained, providing tailwinds for the asset class.

But he added that high yield was very exposed to a rebound in global bond yields: "A repricing in market volatility ... coupled with the reduced liquidity of the market, is likely to result in higher bond spreads," he said. (Reporting by Claire Milhench; additional reporting by Maria Pia Quaglia Regondi and Hari Kishan Editing by Jeremy Gaunt)