UK equities continue to be relatively unloved, but their low valuations have rendered them an attractive hunting ground for contrarian value investors. Against this backdrop, Alex Wright, portfolio manager of Fidelity Special Values Plc (LON:FSV), examines the recent resurgence of UK equities and outlines why he expects outperformance to continue as buying interest returns to the market.
If we rewind back to the end of last year, the market consensus overwhelmingly expected US dominance to persist, yet the exact opposite has occurred as US trade policy announcements and a reversal of the US exceptionalism narrative led to a weaker dollar. This reversal highlights the benefits of a contrarian investment approach and the importance of exercising caution in areas with excessive optimism and heightened valuations.
Against this backdrop, UK equities have outshone many developed market peers year to date – a very different…
