The UK market is currently being influenced by a number of factors, some of which are supportive, others less so.
Overall, we remain constructive about the outlook for UK equities. The UK appears to be unloved by international investors, as reflected by muted inflows into UK equity funds, while valuations look particularly attractive relative to global peers.
Furthermore, trends in oil, commodities and the global economy, particularly in developing markets, look set to provide additional tailwinds.
Investing in the current environment requires an understanding of the multiple drivers that are shaping the prospects of the UK economy and outlook for UK stocks more broadly, placing greater importance on active stock selection.
Alan Custis is head of UK equities at Lazard Asset Management
