UK capabilities - J.P. Morgan Asset Management

UK capabilities

Our refreshing difference can be your advantage

The investment process that powers our UK equity funds is focused only on the factors that drive long-term stock market performance. Whatever your UK portfolio challenge, we can offer a distinctive and refreshing solution.

Our UK equity fund range

Explore our range

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What is behavioural finance?

  • An investment process based on the academically robust principle that market inefficiencies are a result of human behaviour
  • A bespoke investment process that defines and measures specific behaviours
  • Exploits the opportunities that arise from irrational decisions by others

Our process that ranks companies on three criteria

UK Capabilities - A process that ranks companies on three criteria

Why UK Equities?

UK Capabilities - UK FTSE All-Share equity valuations

Source: (Top left) FactSet, FTSE, Tullett Prebon, J.P.Morgan Asset Management. Forward P/E ratio.

UK valuations are relatively attractive

  • UK equities are neither cheap nor expensive relative to their historical average price-to-earnings (P/E) ratio, but relative to government bonds the dividend yield available on UK equities looks attractive.
  • UK earnings have plenty of room for recovery after their poor performance in recent years. As a result, the cyclically-adjusted P/E, which takes into account our position in the earnings cycle, leaves UK equities looking very cheap relative to their long-term average.

UK equities aren’t the UK economy

  • UK-listed international exporters benefit from the fall in sterling.
  • In a world where income is increasingly hard to come by, UK equities offer a very attractive dividend yield relative to other equity markets.
  • Earnings expectations for UK-listed companies collapsed over the last five years, driven mainly by the fall in commodity prices. Earnings expectations are now rebounding, helped by a rise in commodity prices.

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