Preliminary figures from Lipper
showed that the average US diversified stock mutual fund topped six percent in returns so far this year. These figures have apparently sparked debate over whether it is safe to move out of cash and join what some are beginning to call a rally.
The Wall Street Journal sought
the opinions Monday of the managers of the First Eagle Global Fund
and Ivy Asset Allocation Strategy
. According to Morningstar ratings, the two funds have ranked among the top 20% of peers over the past three, five and ten years. The funds were chosen by the WSJ due to their exposure to global trends and opportunities.
The two managers for the respective funds have opposing ideas on what the next step for investors should be. However, both hold a consensus that the U.S is not at this time a source of growth opportunities.
First Eagle co-manager Matt McLennan
spoke positively about economic stimulus efforts and reduced oil prices worldwide. However, he warns that if an economic recovery is realized in 2010 it will likely be a weak one. His overall position is that now is the time to buy stocks, and his fund reflects this stance by holding 80% in stocks.
Ivy Asset Strategy co-Manager Ryan Caldwell
believes that U.S consumer activity won't recover until the second half of 2010. Avy is therefore building its portfolio more cautiously than First Eagel by raising its stake in bonds, reducing its stock exposure and increasing gold buillion to levels not seen since 2006. Ivy will also continue to hold 30% of the fund in cash.
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