US tapering: Are growth stocks in the firing line as Fed prepares to act?

Managers have suggested growth stocks - many investors' favoured plays for a post-QE era - may struggle once the Fed slows its asset purchase programme.

The US central bank is expected to announce a slowdown in QE this week, a move investors have been positioning for over the summer. With the Federal Reserve’s call based on an improving economic backdrop, the consensus is that more economically-sensitive stocks stand to benefit, with some managers warning investors off the ‘bond proxy’ favourites of recent years. However, with equity markets’ strong rally accelerating this year, and bond yields rising in anticipation of a QE slowdown, Jupiter’s James Clunie said expectations could be confounded. “Bond yields have gone up, which mea...