Managers rally as style takes back seat

Value and growth funds management styles became increasingly muddled during the month of April, according to the latestIntechperformance survey, as Australian and international shares rallied strongly.

The manager results for the survey showed a mixed bag of both value and growth managers, indicating that style was not an influential factor in April performance.

InTech head of manager research Fraser Murray says that the mixed results for the month are not surprising and there is a realistic chance that such results could continue going forward.

“The distinction between value and growth is becoming increasingly muddled due to the price to earnings ratio compression in the market," Murray says.

Murray says that managers with strong growth and value biases are increasingly investing in stocks that were once solely the domain of the other camp.

"Take CSL andMacquarie Bankfor example, they are now not uncommon in the portfolios of value managers," he says.

Lazard Asset Management’s Rob Osborn says, "In the past, there were far more stocks that we could exclude from consideration based on price. Today, there are a number of stocks with growth prospects that look more interesting.”

However,Colonial First Statehead of Australian equities Ian Harding says that though the outlook for growth is mixed, the fund manager remains convinced in its growth style, with Australian investment markets looking promising due to the lower valuations of growth stocks compared to historical averages.

Intech says the swift conclusion to the hostilities in Iraq appears to have provided the Australian share market with positive momentum not seen for some time, ending up by 4.3 per cent.