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PIMS hears warnings of &#39mutating&#39 markets

Volatile stockmarkets have torn apart traditional notions of growth and value investment, according to giant US fund manager MFS International.

Speaking at the PIMS 2002 Conference on board the Aurora this week, director Jonathan Willcocks said investors will get “killed” if their IFAs select a core growth or core value strategy as the difference between the two is no longer discernible.

He said one example of the shift is the position of telecom services shares, which historically have been growth stocks but now represent 9 per cent of the value index compared with just 5.9 per cent of the growth index.

Willcocks believes this type of mutation has left the investment industry clutching at straws when trying to categorise stocks, making it essential that IFAs change the way they construct portfolios.

He said IFAs should build low-risk, flexible portfolios which are able to cover all sectors.

Despite his warning, Willcocks said there is still a lot of sense in buying value or growth funds run by stars such as Fidelity&#39s Anthony Bolton and Credit Suisse&#39s Bill Mott although he said there are few managers with their ability.

He said: “It is important to reassess what is meant by growth and value because there has been such significant change. None of us know what they are any more. You will get killed if you go for a core growth or core value strategy.”

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