Featured in FT: UK investors still face a gap between 1990s nostalgia and reality

“Events are sometimes hard. It has been hard to get people round the table,” said Tom Peberdy of the UK client group at asset manager Ninety One, in a recent presentation. Now, he says, he is getting more bites. “The UK has gone from being one of the world’s most unloved markets to one of its most compelling opportunities,” he said.

Heaven knows we have all heard this before. Indeed, I have written it myself before, on multiple occasions. And it is hard to get too excited. As Ian Harnett at Absolute Strategy Research points out, “a more persistent rotation toward UK equities will need more of a fundamental boost than just the UK chancellor looking to get UK pension funds to buy more”. UK stocks look cheap, he says, but are not screaming bargains relative to history nor to the rest of the world outside the US. Nonetheless, the unusually good run in UK stocks so far this year does prove there is life in the old dog yet, especially at a time when blindly pouring funds into US markets no longer seems such a great long-term strategy. 

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