Willis Owen believes concerns around Brexit mean that from a long-term perspective, UK equities are undervalued.
It also believes this has made UK companies look increasingly attractive to overseas buyers whose currencies have appreciated against Sterling, and this could lead to their share prices rising.
Adrian Lowcock, Head of Personal Investing, Willis Owen said: “In the short-term, markets can be a bit of a popularity contest and since the Brexit vote in 2016, UK equities have been out favour with investors. It’s hardly surprising as investors crave clarity and certainty, but the fundamentals of stocks don’t change anywhere nearly as quickly as investor sentiment.
“Investors need to look beyond the Brexit hysteria and they will see that the UK market looks cheap. Whilst short-term predictions are hard to make, the long-term outlook suggests this is an attractive market for patient investors willing to ride out any storms.”
Fund pick: Investec UK Alpha
For investors looking for a UK-focused fund, Willis Owen recommends Investec UK Alpha.
The fund manager Simon Brazier blends fundamental company research with economic analysis and believes that a clear understanding of the economic and thematic background is important. He then meets company management and sees this as key to his approach. His assessment of a company management’s track record, strategy, and allocation of free cash flow are vital parts of the research framework, alongside a thorough valuation analysis considering both the upside potential and downside risk of any investment. The manager’s approach is flexible and pragmatic, and he constantly seeks to balance out the risk/reward opportunities not only at the individual stock level, but more importantly at an overall fund level.