In a report commentary, Randy Lert, Chief Portfolio Strategist for Russell, said bullishness for large-cap value stocks is up 18 percentage points over the results of the March 2006 survey, the largest one-quarter gain in the survey’s 2-year history. In addition, the outlook for small-cap growth stocks experienced the largest quarter-on-quarter drop in the life of the survey, 30 percentage points.

Money mangers’ bullishness on cash was the highest for this asset class in the survey’s history, 38%, reflecting their concern about the economy, according to Lert.

Managers continued to value large-cap growth stocks over all other asset classes, with their bullishness around 70%. Managers are more bearish about real estate investment trusts, at a rate of 70%, than any other asset class, the report said.

By sector, investment managers rated health care highest of all sectors (60%), followed by the technology sector at 58%. According to the report, bullishness for the energy sectors – integrated oils (47%) and other energy (56%) – has risen about 5 percentage points from the previous survey in each case.

Most money managers believe the US Equity market is fairly valued (62%), while about 30% said the market is undervalued.

“The sharp swings reflect a growing view among investment managers that the economy will slow appreciably as two years of steady interest rate hikes by the Federal Reserve Board, higher oil prices, inflation and a slowing housing market might finally be slowing the growth rate of the US economy after its higher than average growth during the first quarter,” said Lert in his commentary.

The survey showed that around 42% believe the major impact of higher oil prices will be lower retail sales, while a little under a third believe the major impact will be higher inflation.

Representatives from 97 investment firms participated in the Russell survey conducted between June 4 and June 12, 2006.