In my last column, I asked whether Chinese equities were cheap. The answer was a definitive yes although there was a big ‘but’ as stocks like Alibaba and Tencent are cheap for a very good reason.
In this column, I want to ask the same question of UK equities, which everyone and their aunt think are cheap. As we’ll see, they are indeed inexpensive but, again, maybe for a reason. That doesn’t mean you should avoid UK equities, it just means you need to pick your strategy carefully.
Before we even enter the cheapness debate, let’s acknowledge the elephant in the room: national benchmarks matter less and less. We tend to think the UK is cheap because the benchmark we use is probably the FTSE 100 or the broader FTSE All-Share index.
