Investment in growth stocks increasingly attractive

25 January 2005
A top fund manager has said that growth stocks are set to become a popular investment option in 2005.

Ted Scott, manager of the sector-beating Stewardship Growth and Income fund, said: "Since the beginning of the year, investors have continued to identify cash rich companies, with the expectation that they will continue to do the same as last year."

He pointed out that with uncertainty over the stock market investors have looked to buy shares from companies that return money to investors through dividends and share buy-backs, rather than capital growth.

But things are set to change.

"Growth shares - which have often not been in a position to return cash to shareholders - have therefore been overlooked, yet I believe this year investors will see new opportunities in growth shares," said Mr Scott.

"As long as the emphasis remains on cash-return, investors will miss out on the opportunities afforded by over-looked growth stocks."

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