UK equities have suffered in recent years as investors moved away from their home market, but they do have a role to play in portfolios, according to the guests on the latest edition of the FT Adviser podcast.
Mark Preskett, portfolio manager at Morningstar, said: “The desire of domestic investors to unwind the home bias that was in many portfolios has been changing over the past decade.
"10 years ago everyone had more in the UK, but it’s intuitive to want to broaden your investment universe and that is the way the industry has been going. But UK equities are well valued right now.”
Richard Saldanha, global equity fund manager at Aviva Investors, said: “Diversification is less about where a stock is listed than where the revenues come from. And in the current, very uncertain economic climate, diversification by revenue is very important.”
Guy Foster, chief strategist at RBC Brewin Dolphin, also appeared on the podcast and said he constructs portfolios based on allocations to regional and single country funds, rather than global equity funds.
This is on the basis that as an investor, his view is the wealth manager should not be outsourcing the asset allocation to a global equity fund manager.
In terms of allocating to the UK, Foster regards companies which screen strongly for the value style of investing as attractive in the UK, but he regards those companies which screen well for the value factor as relatively expensive.
david.thorpe@ft.com