Are UK equities making a comeback?

For years UK equities have been seen as laggards compared to the US. The UK market has been seen as too focused on value stocks such as banks and oil companies, with the focus on equity income often coming in for criticism. Indeed during 2021 investors pulled £4.4bn from UK equity funds.

But has this changed? Since the beginning of 2022, amid rising inflation and interest rates, the Nasdaq has fallen by 12% and the S&P 500 has fallen by 6%. Meanwhile the FTSE 100 has remained stable, rising by a little under 1%.

This week reporter Sally Hickey is joined by Ed Smith, co-chief investment officer at Rathbones, and Louise Kernohan, manager of the BNY Mellon UK Equity and BNY Mellon Sustainable UK Opportunities funds.

They discuss the what might happen to UK equities if US growth stocks continue to struggle, whether the UK remains too focused on income stocks, why fund managers often appear so much more bullish on the UK than investors and whether attempts to encourage more growth stocks to list in London are likely to work.

The FTAdviser Podcast is the weekly podcast for financial advisers, brought to you by FTAdviser. Each week, FTAdviser is joined by guests from the industry to discuss the week in news and pressing industry issues.

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