What do you think about UK equities?

What do you think about UK equities?

A recurring theme in investment markets in recent years has been the underperformance of UK equities relative to the rest of the world.

Part of the reason for this has been the composition of the UK index, replete as it is with companies often viewed as part of the “old economy” such as banks, retailers, miners.

Meanwhile the US market is full of companies in more fashionable areas such as technology.

Indeed during 2021 there were outflows of £4.4bn from UK equities funds, which was this asset class's worst performance since 2018.

But the start of 2022 has heralded a new phase of market sentiment as investors, mindful of higher inflation and higher interest rates, shift away from technology shares and back towards areas which dominate the UK index.

So, is it time to increase exposure to the home market?