We are often drawn to areas of the stock market that have fallen out of favour. Investor antipathy towards certain stocks or sectors becomes embedded in valuations and it is that undervaluation which sparks our interest.
The UK economy – Why we are more positive
Valuation premium of UK domestic stocks vs UK exportersRead more
15.1% Average since 2009
10.6% Before Brexit vote
Lending growth highest since before financial crisis as UK banks' balance sheet strength returnsRead more
4.3%* UK bank capital ratio in 2006
13.5% UK bank capital ratio in 2016
*Estimated common equity tier 1 capital to risk-weighted assets
Fixing the broken housing marketRead more
177,000 UK housing completions 2016
1.5M Estimated UK housing deficit
Forecast annual economic growth rates (2017–2019)Read more
1.5% UK growth – expectations too low
3.3% Global growth – expectations too high
Sources: Morgan Stanley, The Lazarus Partnership, The MacroStrategy Partnership, Peel Hunt, Bloomberg, Woodford
Find out why we’re positive on UK equities
Recently, we have seen value emerging in parts of the market that have fallen out of favour, in part as a result of last year’s Brexit vote. Many domestically-focused stocks now look more compellingly attractive than they have done in years.
One part of the UK economy that looks well placed to benefit from this benign outlook is the construction sector. Here we see an industry with positive fundamental dynamics and a long-term opportunity, underpinned by the public sector.