Markets could fly soon2 Mar 2019 09:47
As the prospects of a no-deal Brexit recede, fund managers are flagging up the big gains that could be made by investing in “historically” cheap mid-sized British companies. Brexit has turned UK companies into the pariahs of the international investment community, their revenues and profits deeply uncertain while a cliff-edge no-deal remains on the table. If a deal finally emerges, could they soar in value?
“The UK market is a historic opportunity,” says Scott McKenzie of Saracen, an Edinburgh-based fund firm. “The worst-case Brexit scenarios are quite grim but valuations are already at historic lows and UK shares ought to recover from here.Waiting for the gloom to clear may risk leaving it too late and missing the sunshine. It’s time to stand up.”
At Fidelity, which controls £1.5tn in assets globally, fund manager Alex Wright says the “unrelenting negativity” towards UK equities could turnaround rapidly, with any clarification of Brexit the likely catalyst. If so, the UK “could be among the top performers globally” in 2019.