View more on these topics

Growth stocks to suffer for five years, says Mott

Growth stocks have no chance of staging a comeback for another five years unless the economy slides into a major recession, according to the UK&#39s leading income manager Bill Mott.

Speaking at the Hargreaves Lansdown conference in Bath last week, Mott – Credit Suisse&#39s top-performing income manager – said he did not see where there was enough shortage of capacity in the UK economy for growth to return.

In the anaemic corporate earnings&#39 environment in which the UK is mired, Mott said it would take great technology innovation – which he considers unlikely – or a massive recession to lay the groundwork for growth stocks to justify their current price/ earnings ratings.

If neither happens in the near future, Mott said it will be five years before growth could again rival value stocks.

However, if the economy were to fall into negative GDP, which would erode surplus capacity, Mott said growth could rise sooner although, with low interest rates effectively postponing a recession, he suggested it was unlikely.

He said: “It is not possible for growth to make a comeback. There is not enough earnings&#39 momentum to justify ratings, which presume a higher level of growth than is possible. Only through a lot of pain – a huge recession – can they recover.”

Hargreaves Lansdown investment manager Ben Yearsley says: “I would have to agree. The economy is not doing well enough to generate decent earnings&#39 growth.”

Recommended

Inter-Alliance shares fall 24 per cent

Shares in Inter-Alliance fell 24 per cent in the last to 110p from 83.5p after celebrated short-seller Simon Cawkwell, who is known in the City as Evil Knievel, said the Aim-listed national IFA was overvalued.

Neil Pegrum

One of Neil Pegrum&#39s main motivations for leaving fund manager M&G to join Insight Investments was that he wanted to join a player which was looking to grow.While most fund managers are battening down the hatches and looking to weather the storm of volatile stockmarkets, Pegrum says he was attracted by the prospect of an […]

Solus Multimanager Funds – Solus Multimanager Growth Fund

Friday, 17 January 2003 Solus Multimanager Growth Fund Type: Oeic Aim: Growth by investing in equities, fixed interest and cash Minimum investment: Lump sum £500, monthly £40 Investment split: UK equities 54%, international equities 27%, fixed interest 13%, cash 6% Isa link: Yes Pep transfers: Yes Charges: Initial 3.5%, annual 1.25% Commission: Initial 3%, renewal […]

Newcastle Building Society – Guaranteed Property Bond (Issue 3)

Thursday, 16 January 2003 Type: Guaranteed equity bond Aim: Growth linked to the performance to the Halifax house price index Minimum-maximum investment: £1,000-£500,000 Term: Five years Guarantee: Capital returned in full regardless of the performance of the index Return: 100% of the average growth at the end of the term Closing date: March 28, 2003 […]

The return of emerging markets

Ewan Thompson, Head of Emerging Market Equities, Neptune Although in political terms 2016 will be remembered for the seismic shocks of the Brexit vote and Trump’s presidential victory, the year was also a watershed for the global economy and emerging markets in particular. Following five years in the wilderness, the conditions are now in place […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com