Q3 2017 Portfolio Discussion: Investing in the UK
The referendum and election result have created great political and economic uncertainty for the UK. The outcome of the negotiations with the European Union will have a significant effect on the future of the UK, the value of the pound and the relative performance of different sectors.
Domestic vs international exposure, large vs small?
- The large-cap FTSE 100 gets most of its revenues from abroad, whereas the mid-cap FTSE 250 has a larger exposure to the domestic UK economy. Therefore, a fall in the pound should favour internationally exposed large-cap stocks, whereas a rise in the pound should favour smaller, more domestically-focused stocks.
- After many years of outperformance, mid-cap stocks look somewhat expensive relative to large-cap stocks.
- The average UK equity fund has far more exposure to mid and small cap stocks than the FTSE All Share.
The fund aims to produce consistent returns from the UK stock market over time, while rigorously controlling risk through its benchmark-aware approach.
Refresh your UK equity portfolio
Our UK equity range offers a wide choice of objectives and strategies, all based on our behavioural finance process.
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The value of investments and the income from them can fall as well as rise and investors may not get back the full amount invested. Past performance is not a guide to the future.