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Key takeaways

The macro

  • UK resilience is underappreciated: Despite persistent uncertainty, improving fiscal discipline and falling inflation could set the stage for a stronger recovery than markets expect.
  • Policy clarity is the missing ingredient: With inflation and labour tightness easing, political and fiscal noise remains the biggest hurdle – and that’s fixable.

The market

  • UK assets offer selective value: With rate cuts likely and inflation moderating, short-duration bonds and multinational UK equities (e.g. pharma, energy, defence) present compelling opportunities.
  • Domestic investment is waiting for a spark: Business spending is still subdued post-Brexit, but targeted reforms could unlock growth – making this a market to watch for signs of momentum.

The managers

  • Policy credibility is key to unlocking UK potential: A coherent fiscal plan is needed to restore market confidence, lower yields, and support both bond and equity valuations.
  • Small and mid-cap UK equities could rerate: If sentiment improves and growth picks up, under-owned domestic stocks may benefit from a multi-year recovery.

Episode 2: the macro, the market and the managers

UK-focused solutions

FTF ClearBridge UK Equity Income Fund

  • Our flagship fund is a low-cost solution and has consistently generated more income than the FTSE All Share index.
  • Despite considerable outflows in the sector, our UK equity income fund was one of the only winners in 2022, attracting inflows over the year.
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FTF ClearBridge UK Mid Cap Fund

  • This is a high conviction portfolio of quality UK mid cap stocks, which provides a prudent exposure to the many high growth opportunities within the FTSE 250 index.
  • We believe this offers investors a distinct investment choice given the diverse profile of the index. 
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FTF Franklin UK Gilt Fund

  • The Fund aims to generate income and increase in value through investment growth. Over periods of five years, the Fund seeks to achieve an average annual return greater than that of the FTSE UK Gilts (All) Government Total Return Index, after all fees and costs are deducted.
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FTF ClearBridge UK Smaller Companies Fund

  • The Fund aims to grow in value by more than the Numis Smaller Companies ex- Investment Trusts Index over a three to five-year period after all fees and costs are deducted.
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UK equities: change the narrative for the real story

You don’t need to look very far to be confronted with negative headlines and stories of broken Britain. But, maybe it’s time to change the narrative, take a closer look and discover the real story on UK equities.

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