Jupiter's Matthews eyes unloved UK domestic stocks

Jupiter's Philip Matthews is buying into domestically-focused UK companies on the belief they offer better relative value than many stocks geared to the emerging world.

While Matthews, the Jupiter Growth & Income fund manager, concedes the out-of-favour UK domestic stocks could be hit by harsher Government spending cuts than anticipated, he believes current low valuations offer a degree of protection. “People have already been very aggressive in the forecasted downgrades, but where is the larger margin for error?” Matthews asks. “Is it in the valuations trading on about six times peak profits and nine times profits that have fallen 30%? Or is it the valuations of 20 times for emerging market profits? If these profits do not come in as strong as peopl...