The financial crisis has changed the attitudes and practices of European institutional investors with a notable shift away from equities and towards fixed income and cash, according to a survey supported by Invesco.

The 2009 European Institutional Asset Management Survey (EIAMS) showed that there has been a sharply increased focus on the investment horizon as investors have struggled to address the damage caused to their portfolios.

Yves Van Langenhove, head of institutional business, Benelux & Nordics at Invesco, said: "In a year in which the investment sector has gone through such testing times, the survey results will be more significant than ever. While many of the accepted assumptions about the merits of different assets have disappeared into a melting pot, investors are still left with the issue of trying to build portfolios on the basis of expected returns and diversification of risk."

He said investors are evidently less certain when it comes to the role that different asset classes can play in delivering returns.

Investors, the survey shows, are investing twice as much in bonds as equities, and the overall allocation to cash has almost doubled. Cash accounts for ten per cent of all assets, and 14 per cent of investors said they are prepared to increase their holdings further.

Respondents were, however, evenly split between increasing and decreasing their equity holdings going forward, although the majority see fixed income as the largest single source of absolute return, followed by real estate.

"The fact that absolute performance has been all but jettisoned for international portfolios and fallen down in the wish list for external portfolios seems to be recognition of the current investment climate and how far we are from normal longer-term investment considerations."

The survey questioned 117 investors from 24 countries.

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