Unloved UK equities trading at a discount could present an opportunity for investors, according to one portfolio manager.
Alex Wright, manager of Fidelity Special Situations and Special Values, said UK equities are currently pricing in pessimism and trading at a discount compared with other markets.
He said: “Interestingly, after a painful period of poor returns following the Brexit referendum in 2016, UK equities have started to outperform other markets – a fact that has gone largely unnoticed by investors.
“While corporate earnings have improved, valuation levels have remained largely unchanged.”
Wright added that the UK market compares favourably to the US market.
However, while things appear to be looking up, it is still a tough economic environment.
He added: “The relative attractiveness of UK valuations versus other markets – as well as the large divergence in performance between different parts of the market -…
