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Perpetual to prosper as old guard recovers

The surge in old-economy stocks looks set to reverse the fortunes of Perpetual.

Traditional income funds are on course for a recovery as the technology

boom has been pinned back in recent weeks with investor sentiment shifting

to the traditional stocks such as retailers and brewers.

Perpetual has been criticised for avoiding technology and telecom stocks

which was the main reason for the poor performance of its UK funds.

But all the new entrants to the FTSE 100 index have fallen since their

promotion to the index last month while all the “old guard” stocks they

replaced have climbed.

Now many investment IFAs believe the likes of Perpetual, Schroder and

Newton will reap the rewards from the change in market attitude with

traditional income funds the main beneficiaries.

Bill Mott has just returned to run Credit Suisse&#39s income funds because of

the anomalies between old and new stocks.

Perpetual head of UK investments Stephen Whittaker says: “Rumours of our

demise have been overstated. We are seeing a more mature reflection of the

markets

and what we saw between October and January will not be repeated.”

Hargreaves Lansdown head of research Mark Dampier says: “Many of the old

economy stocks have fallen so much that they cannot fall much further.”

Whitechurch Securities director Warren Perry says: “The likes of

Perpetual, Schroder and Newton will have a good run in the next few

months.”

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