UK equities may be set to outperform

Fund manager's comment

Are there opportunities in the UK equity market? I believe the pessimistic outlook for UK equities, ...

Are there opportunities in the UK equity market? I believe the pessimistic outlook for UK equities, much of which is based on institutional net selling, has been overdone. Although expectations for earnings in 2005 have fallen, with low valuations and improving profitability, the UK could be set to outperform. There are risks to this view, such as rising energy prices and weaker consumer spending. However, the effect of high oil prices has been muted so far, and much of this has already been priced into the market. Expectations of rising interest rates, which were perceived as a seri...