Investment managers surveyed by Russell Investment Group believe corporate profits and interest rates will lift the market higher in 2005. Russell's quarterly investment manager outlook poll also found that 60% expect U.S. large-cap growth stocks to benefit in this environment. About 58% were bullish on health-care stocks, 57% liked developed markets equities, and 47% favored emerging markets. Bearish sentiment toward bonds "intensified significantly," with 74% of managers negative on U.S. Treasuries, an increase of 10 percentage points from last quarter.
"Large-cap growth is selling at historically low levels, particularly relative to value," said Randy Lert, Russell's chief portfolio strategist. Still, manager views toward large caps are contrary to what is taking place in market this year. "They like growth better than value and, basically, value has done better."
Russell surveyed 109 U.S. investment firms, managing an average of $56.6 billion each, from Nov. 18-30.