According to a recent survey of investment managers by the Russell Investment Group in Tacoma , Wash. , three out of four money managers thought of themselves as “bullish” on large-cap domestic growth stocks.

In addition, four out of five were also in favor of investing some money into technology stocks. This was contrasted with results that showed that less than half of the investment managers surveyed described themselves as bulls on emerging-market stocks and less than a third were upbeat about value holdings.

Investors warmed up to growth stocks in 2007 as the broad-market Russell 3000® Growth Index for the first time since 1999 outperformed the Russell 3000® Value Index. The growth index reflected an 11.4% return for 2007, while the value Index dipped 1% for the year.

In addition, growth stocks outperformed value stocks for 2007 at every capitalization tier by a double-digit spread. The gap favoring growth in the large-cap segment, for example, was 12 percentage points for the year—a complete reversal from 2006.

"This resurgence of growth was long overdue, particularly in the small-cap arena, as we witnessed some mean reversion after seven years of value style leadership," said Chris Tessin, portfolio manager. "Part of growth's win for 2007 was simply the relatively poor performance of financial services stocks, which represent a large percentage of each value index."

Another reversal in 2007 involved the resurgence of large-cap stocks. The large-cap Russell 1000® Index reflected a 5.8% gain for the year, outpacing the small-cap Russell 2000® Index (-1.6%).

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