The UK opportunity in plain sight

Last year, UK investors pulled a net £9.5bn from domestic equities, extending the asset class’s trend of yearly net outflows since 2016. This is despite the FTSE All-Share returning 24% – more than twice the return of the S&P 500. However, even after this strong run, the UK market’s P/E ratio remains well below the global average. UK small caps, which helped drive the index’s performance last year, remain even more heavily discounted. The small-cap market derives around 60% of revenues from the domestic economy, compared with just 20% for large caps. Despite all the volatility of the past decade,...