The majority of money managers feel that the U.S. markets are undervalued, according to the Russell Investments Investment Manager Outlook for December 2008. The survey polled 206 asset managers on their expectations for the U.S. equity markets for 2009.
Seventy-two percent expressed this sentiment, while 20% feel that the market is fairly valued. Managers believe that the market has overshot the damage done by the ongoing recession and is now oversold and undervalued, said Erik Ristuben, Russells chief investment officer for North America. In their opinion, this market has been driven by panic and fear as much as by economic fundamentals.
Meanwhile, managers polled by Russell are astoundingly bullish on four asset classes:corporate bonds (60%), U.S. small-cap value (54%) and mid-cap value equity (53%) and high yield fixed-income (53%). They are not so keen on emerging markets and non-U.S. developed markets.
Additionally, managers continue to prefer growth investments versus value, with 67% preferring large-cap growth equity.