Our views on UK Equities

David Moss

Managing Director, co-Head of Global Equities, European Equities

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For investors, everything about the UK remains in a state of flux, whether it’s the political backdrop, the economy or the stock market. Perhaps there are two consolations:

  1. European elections and the ongoing Democratic versus Trump battles in the US
  2. Continued concerns on trade and a general economic slowdown

It’s pretty much the same everywhere! The problem, of course, is that the UK market is being assailed from both sides. For domestic-facing UK equities, while the economy remains robust with record employment levels, the concern remains ‘what next’ – owing primarily to the ongoing saga that is Brexit. And for those businesses that rely on exports or just have a large portion of business overseas, the issue remains the threat of a US/China trade war and the effect on both countries’ and others’ economies.

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Past performance is not a guide to future performance. The value of all stock market investments can go down as well as up and you may not get back the full amount originally invested. If you feel you need specific investment advice that takes your individual circumstances fully into account, please talk to a financial adviser. The value of directly held property will reflect the valuations determined by professional independent valuers. Such valuations are the opinion of valuers at a particular time and are likely to be revised. Property and property-related assets can sometimes be illiquid. 

The UK market is being assailed from both sides.

The result – and it’s almost a cliche to say it – is increased volatility. Fortunately, the ability to predict macroeconomics or politics has never been a part of our investment process. We have been, and remain, bottom-up stock pickers trying to buy for the long term what we believe are great businesses at attractive prices. This means that we do not fear volatility – in fact, we embrace it because an overreaction to a set of results or an external event can provide an entry price to buy a stock.

No matter the background, focusing on stock and business fundamentals makes it possible to find good opportunities – and that a difficult and volatile environment will actually provide these. It remains important to direct our efforts appropriately, following our investment process to find businesses with enduring positive characteristics, robust balance sheets and good potential cash generation. The market may then give us the opportunity to buy these businesses at great prices. 

Views and opinions have been arrived at by BMO and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

This section of the website is directed at persons who are located in the UK. Please read our full terms and conditions and the relevant Key Information Documents (“KID”) before proceeding with any investment product referred to on this website. Nothing on this website is, or is intended to be, advice to buy or sell any investments. If you are at all unsure whether an investment product will meet your individual needs, please seek advice. 

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Phone: 0345 600 6166

Email: [email protected]

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