Disclosure – Non-substantive Research
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour.
UK equities are among the most unloved investments globally, with domestic-facing stocks particularly out of favour. Value-orientated investors should be asking themselves if there is an opportunity here, or if the 'Brexit discount' is justified.
The Bank of America Merrill Lynch fund manager’s survey of global allocators saw weightings to the UK reach a historic low in March, and the country has been one of the least favourite locations all year amongst respondents. James Goldstone, manager of the Invesco Perpetual Select UK Equity and Keystone trusts, tells us US investors are on a “buyer’s strike”.
Amongst domestic investors the data shows a similar pattern: the Investment Association reports that the open-ended UK All Companies sector was the worst-selling in March, as it was in four other months of the past 12. The UK equity income sector was the worst-selling in two months over the same period.
We examine a number of trusts that are specifically positioned to benefit from what their managers believe will be a resurgence of interest in stocks exposed to the UK domestic story.
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