Why UK equities have a promising year ahead

UK EQUITIES

Thomas Moore, manager of Standard Life Investments' UK Equity Income Unconstrained fund, highlights the key sectors driving the case for UK equities this year.

Investors who started 2012 with the conviction of better things ahead have thus far been well rewarded. The Q1 earnings season has turned out to be solid, particularly for some of the more cyclical sectors, while US GDP forecasts have seen steady upgrades, having bottomed out last October. Wholesale funding markets have responded, resulting in a significant contraction in yields on both corporate and peripheral European bonds and a surge in corporate bond issuance. Having positioned themselves for Armageddon late in 2011, it is becoming clear that many investors simply became too pess...