The same fall in confidence seems to apply to value and growth stocks, according to Morningstar. “The fund managers are unsure which type of stock is going to do best. In November over 30 per cent liked value and the same number preferred growth, but in February this sentiment seems to have shifted, with close to 50 per cent saying they are unsure which will perform best,” said Phoebe Davison, fund analyst at Morningstar.
The survey revealed more agreement among fund managers on other issues. For example, 92 per cent said corporate mergers would be a strong trend this year and 86 per cent said they would prefer to be invested in the company being bought rather than the buyer. A further 89 per cent thought that increased dividends would be another big trend in 2005 and two thirds expected the dollar to be the worst performing currency.
Ms Davison pointed out that the currency could be hitting its lowest point, however, which could mean that investors seeking to buy cheap will be attracted to the currency. “When everyone hates something, that can be the best time to invest.” RM
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