Why UK equities have earned a comeback
We are delighted to invite you to our Investment Trusts Conference:
UK Equities, Overlooked, oversold and over here
In connection with our recent research note, we are hosting many of the trusts mentioned in the note at our Investment Trusts seminar on 29th June at the London Stock Exchange, 10 Paternoster Sq., London EC4M 7LS.
*** This is an in-person event aimed at professional investors only. We will also be streaming investor webinars for each Trust on separate days through the Research Tree platform that are available to all investors (see details below).***
TO ATTEND IN PERSON, which provides a great opportunity to meet the managers of these trusts, please make sure you are logged in and then click the "Inquire" button, or contact us directly via:
- events@capitalaccessgroup.co.uk
Investment Trust Conference schedule
0800 Registration/Breakfast
0845 Welcome | Sarah Godfrey
0850 Multi Cap UK Equities panel hosted by Emma Bird (Winterflood) and consisting of:
Miton UK Microcap Trust (MINI) | Gervais Williams
JPMorgan UK Smaller Companies Investment Trust (JMI) | Georgina Brittain
Schroder UK Mid-Cap Fund (SCP) | Jean Roche
Artemis Alpha Trust (ATS) | Kartik Kumar
10.10 Break
10.30 UK Equity income panel hosted by Anthony Leatham (Peel Hunt) and consisting of:
The Merchants Trust (MRCH) | Simon Gergel
Shires Income (SHRS) | Iain Pyle
Law Debenture (LWDB) | James Henderson, Denis Jackson
Troy Income and Growth Trust (TIGT) | Hugo Ure/Blake Hutchins
11.50 Close | Alex MacEwen
Individual webinar presentations and Q&A for each Trust
20 June 2023 - 11.15am - Shires Income Plc - Investor Webinar
Iain Pyle, UK Equity Portfolio Manager at abrdn will provide an introduction to Shires Income.
26 June 2023 - 11.15am - Miton UK MicroCap Trust Plc - Investor Webinar
Gervais Williams, Head of Equities at Premier Miton will provide an intro to Miton UK MicroCap.
28 June 2023 - 11.15am - Troy Income & Growth Trust Plc - Investor Webinar
Hugo Ure, Co-Manager of Troy Income & Growth Trust will provide an intro to Troy.
3 July 2023 - 11.15am - Artemis Alpha Trust Plc - Investor Webinar
Kartik Kumar, manager of the Artemis Alpha Trust will provide an introduction to the Trust.
4 July 2023 - 11.15am - JPMorgan UK Smaller Companies Investment Trust Plc - Investor Webinar
Georgina Brittain, senior portfolio manager will provide an introduction to the Trust.
4 July 2023 - 2.15pm - Schroder UK Mid Cap Fund plc - Investor Webinar
Jean Roche, Lead Manager at Schroder UK Mid Cap Fund will provide an intro to the Trust.
5 July 2023 - 11.15am - Merchants Trust PLC - Investor Webinar
Simon Gergel, Portfolio Manager, will provide an introduction to The Merchants Trust.
6 July 2023 - 11.15am - Law Debenture Corp Plc - Investor Webinar
James Henderson, PM at Janus Henderson will provide an intro to Law Debenture Corp.
Research Note
"Overlooked, oversold and over here: Why UK Equities have earned a comeback"
In the past two years, investors have pulled £19.7bn out of open-ended UK equity funds – the equivalent of the entire market capitalisation of Tesco – with negative net sales in all but two of the past 24 months, and outflows of over £12bn in the last 12 months alone. UK equity valuations (measured on a forward P/E basis) are close to record discounts versus the US and are also historically low compared with European equities. Across the three Association of Investment Companies (AIC) UK equity sectors, discounts to NAV stand at an average of nearly 10%. Yet the FTSE 100 index briefly reached an all-time high of more than 8,000 points in February this year, the broad UK market has beaten the S&P 500 over the 12 months to end-April and is in line with the US on a three-year annualised basis, and a recent slew of takeover bids suggests that foreign private equity buyers at least are alive to the opportunities on these shores.
In this note we look at the gap between perception and reality in the UK equity market, the opportunities and threats in the economic and market outlook, and the emerging consensus that the valuation discount versus other major markets is at or close to an inflection point. We consider the benefits of UK equity strategies both for income investors and for those seeking exposure to the higher growth potential of smaller and mid-cap companies.
Although inflation remains stubbornly high, interest rates are at levels not seen since Lewis Hamilton won his first Formula One championship, and the UK may still experience a recession this year, we argue that the breadth and depth of the equity market means it can offer something for everyone, whether income or growth, cyclical or defensive, large or small.
We therefore conclude that UK equities – which arguably have spent seven years in the wilderness of Brexit – have earned a comeback. We also believe that exposure to the opportunities on offer can be most effectively achieved through investments in various investment trusts, given the many benefits of the closed-ended structure. We briefly consider eight trusts across the three AIC UK equity sectors: UK All Companies, UK Equity Income and UK Smaller Companies.