Should managers stay exposed to consumer spending?

Falling oil prices have been a boon to consumers and managers should be exposed to rising discretionary spending, explains Smith & Williamson's Mark Boucher.

The unforecastable fall in the oil price has given us further confidence that investments exposed to consumer spending in the UK will outperform. We held this view throughout last year, and it was down to several factors. During 2014, there was an increase in the annual rate of average household discretionary incomes, according to the Asda Income Tracker, and the figure was 6.7% higher on the year at the end of November. This was the largest change for five years. Wage growth, while still weak compared with pre-crisis levels, has accelerated since June. This, in combination with conti...