Outlook promising despite choppy start to 2007

Following an impressive showing in 2006, UK equities have turned in a choppy and unspectacular perfo...

Following an impressive showing in 2006, UK equities have turned in a choppy and unspectacular performance in 2007 so far. However, we are cautiously optimistic about the outlook for 2007, seeing a number of reasons to be attracted to the asset class. Firstly, despite the good run UK equities have had, price to earnings valuations are still attractive on an historical basis. Secondly, the underlying financial position for many UK companies is robust, with debt levels substantially reduced from the heady days of 2000, and consequently the opportunities to invest for income continue. Compa...