Where are the Opportunities for UK Stock Pickers?

Despite being more cautious in the short-term outlook for UK equities, which have fallen approximately 6% since the beginning of September, the long-term outlook is optimistic

Aviva Investors 5 November, 2014 | 2:43PM
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Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, David Lis, Chief Investment Officer, Equities and Multi-Assets at Aviva Investors explains why he is upbeat on long-term outlook for UK equities despite recent selloff.

While UK equities may struggle to advance in the short term, the long-term outlook is supported by healthy domestic growth, and the encouraging pace of global growth and low interest rates. Small caps, in particular, have been aided by exposure to a thriving domestic economy and strong M&A activity, outperforming the wider market this year, and we expect this trend to continue.

Within UK equities, there are three themes driving our portfolio positioning. First, high-quality franchises that grow revenue and cashflow regardless of economic conditions will be well placed to deliver. Second, ‘self-help’ opportunities, where management is taking action to improve the business, will perform well. And finally, we expect M&A in the coming months to remain strong after encouraging levels of activity so far this year.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
BHP Group PLC2,324.00 GBP0.00Rating
Brewin Dolphin Holdings PLC359.00 GBP0.00
Dixons Carphone PLC129.20 GBP0.00
ITV PLC112.20 GBP0.00
Liberty Formula One Group B52.00 USD0.00
Melrose Industries PLC160.10 GBP0.00
RELX PLC2,114.00 GBP0.00Rating
Rio Tinto PLC6,101.00 GBP0.00Rating
Tesco PLC233.00 GBP0.00Rating

About Author

Aviva Investors  is Aviva's global asset management business

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