Despite the market, 70% of money managers are bullish on large-cap growth stocks, according to the latest findings of a Russell survey.

"To understand the managers' allegiance to what have been out-of-favor market segments, we have to consider some historical perspective," said Randy Lert, chief portfolio strategist at Russell Investment Group. "Over the past decade, the Russell 2000 Value Index has outperformed the Russell 2000 Growth Index significantly outside of historical norms, and investment managers believe that such a level of disparity between market segments may not be sustainable." Those managers who responded to the Russell survey believe that the market segment will move from value to growth.

These managers are also positive about the U.S. stock market, with only 8% reporting it overvalued. Another 67% say it is fairly valued and 24% believe it is undervalued.

"Even against the backdrop of slight wariness on current earnings forecasts, the managers are still expressing that market is either fairly valued or undervalued, and they continue to have a strong preference for growth in all market capitalization segments," said Lert. "Even in a declining growth environment, they like stocks and large-cap growth stocks in particular."

When it comes to equities, 70% are bullish on U.S. large-cap growth, 63% are bullish on mid-cap growth and 57% are bullish on non-U.S. equities.

Separately, the survey also reveals that managers believe that healthcare and technology will deliver strong returns. In fact, these sectors have maintained the top spot since the survey was first conducted in June 2004. Seventy percent of managers are bullish on healthcare and 67% are bullish on technology.

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