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Bank of America Merrill Lynch's latest monthly survey of global
managers, which was carried out between Sept. 6 and 12., showed
only 7% of investors expect value stocks to outperform growth
over the next 12 months.
That is up from the decade low in the last survey, but it
undermines speculation that the rapid recent rally in value
stocks, which are generally defined as firms whose fundamental
worth is not reflected in their current share price such as
banks and autos, is the start of a prolonged rotation back into
sectors that have underperformed in recent years.
Over the past week, the MSCI world value index has vastly
outperformed the growth index. Companies that boast a faster
pace of growth, such as like the big U.S. tech names have been
favored during the past decade of central bank largesse.
Also, 47% percent of investors surveyed saw oil prices fairly
valued around $55 per barrel before the weekend attack on a
Saudi Arabia crude oil facility with investors holding the
biggest underweight on the resource sector in more than three
years.
The overall outlook remains cautious. Some 38% of investors
expect a recession over the next 12 months, the highest reading
in a decade. That compares with 59% who see a recession as
unlikely. The most crowded trade in the eyes of fund managers
remains bullish bets on U.S. Treasuries.
Some 38% of investors think the U.S-China trade war is the new
normal, while 30% believe it will be resolved before the 2020
U.S. Presidential election.
(Reporting by Josephine Mason; Editing by Saikat Chatterjee and
Louise Heavens)
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