UK Growth managers return to developed markets

In interviews conducted just before and after the release of the Q4 GDP numbers, most UK growth managers were in line with the consensus view the UK economy is unlikely to slip back into full recession.

Managers did, however, believe the UK will go through a period of modest sub-trend growth given the structural headwinds that have to be addressed. Government sector deleveraging, combined with high inflation, will continue to hurt the disposable income of UK households, which will affect many companies dependent on the domestic consumer. Most mainstream managers continue to avoid these names, resulting in underweights to homebuilders and defence companies within the peer group. Where S&P rated managers do have UK-exposed names, the reasons are highly stock-specific and usually specia...