Testing times for UK market

income managers face rising gilt yields while growth managers fear deflationary pressures

UK growth and income managers face conflicting medium-term difficulties in their quests for total return. While sluggish economic growth and potential deflationary pressures could potentially hit managers' growth objectives, income managers are faced with increasing gilt yields and rising interest rates leading some to target higher yielding equities in order to fulfil dividend requirements. Tony Willis, co-manager of Lazard UK Alpha, speaking at the FundsNetwork Star Manager roadshow, said he had a number of concerns about the UK market, mainly stemming from structural problems facing th...