The recent shift in sentiment towards UK equities in recent months has not yet eroded all of the value to be had, according to the guests on the latest FTAdviser Podcast.
Mike Bell, global market strategist at JP Morgan said most of the money investors withdrew from the UK market in recent years has not gone back in despite the change in sentiment.
Mr Bell said: “We have seen some re-pricing in the UK equity market in recent months, but no where in the market looks expensive. The mid caps have risen quite a bit, but not expensive compared to where they have been in the past.”
Over the three months to the end of September, a total of £2.3bn was withdrawn from UK equity funds, the worst quarter in history, according to the Investment Association. This put the total outflows since the Brexit referendum in 2016 at nearly £15bn.
Job Curtis, who runs the City of London investment trust, a UK equity income fund said: "Looking at some of the major measures of value, the yield on the FTSE All Share is over 4 per cent, and even the average company is yielding over 3 per cent. The mid caps had a particularly strong move, but financial haven’t risen that much.”
Mr Bell and Mr Curtis also discussed the outlook for inflation and interest rates, and the potential for Brexit induced volatility to impact on portfolios in 2020.
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david.thorpe@ft.com