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

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.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BHP Group PLC1,490.60 GBX-0.11
Brewin Dolphin Holdings PLC238.00 GBX-1.24
Dixons Carphone PLC95.85 GBX-0.83
ITV PLC70.90 GBX0.17
Liberty Formula One Group B34.60 USD-4.95
RELX PLC1,540.50 GBX-1.57
Rio Tinto PLC4,334.00 GBX1.59
Signature Aviation PLC235.70 GBX-1.17
Tesco PLC203.00 GBX-0.39

About Author

Aviva Investors  is Aviva's global asset management business

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