We highlight the key points from the interview, covering valuations, why fundamentals look to be improving and where the team see opportunities in the market.
The UK equity market stands out as one of the cheapest globally while offering an attractive gross dividend yield of around 4%.1 We believe this combination makes UK equities a compelling investment choice on the international stage.
Things are looking up in the UK. Inflation has been brought back within range, rates have peaked, consumer confidence is trending upwards, and GDP growth keeps outperforming expectations. All paving the way for a boost in economic activity.
The Martin Currie UK Equity team sees great potential in UK mid- and small-cap stocks, especially those with large domestic market exposures or excelling in specialised, niche sectors within their industries.
Martin Currie’s UK Equity Portfolio Managers were recently interviewed in Citywire’s London studio. The interview explored their perspectives on the future of UK equity markets, highlighting what they believe, is an abundance of opportunities for investors.
The UK market is currently drawing significant attention from asset allocators due to its appealing valuation and improved economic indicators. The UK equity market stands out as one of the cheapest globally, making it an attractive investment destination. This perception is bolstered by the resolution of previous concerns such as high inflation, rising interest rates, political instability, and economic stagnation, which are no longer seen as threats.
The fundamentals of the UK economy could be on an upward trajectory, evidenced by positive GDP revisions and controlled inflation. An easing monetary policy is anticipated to spur increased economic activity, which could benefit business operations and cyclical companies, especially those in the small and mid-cap sectors. These sectors are recognised for their structural opportunities and we believe smaller companies in niche areas poised for organic growth. However, this potential may not yet be fully reflected in their current market valuations.
Additionally, the UK market is known for its robust dividend culture, appealing to income-seeking investors. The market offers a gross yield of around 4% currently, with potential distribution yields exceeding 5% when accounting for share buybacks. This yield is not only sustainable due to modest payout ratios but is also becoming increasingly attractive as interest rates begin to fall. This makes the UK equity market a compelling alternative to traditional cash savings, offering both income and potential capital returns.
The Fund is managed by an experienced investment team comprising of the following members:
Co-Head, UK Equities (Small & Mid-Cap)
Co-Head, UK Equities (Large Cap)
Vice President, Portfolio Manager - UK Equity
Portfolio Manager & Research Analyst
The UK equity team, previously part of Martin Currie, has now formally aligned under ClearBridge Investments, as of the 30 September 2025.
This new structure will optimise the combined strengths of the UK equity team and ClearBridge Investments. The team will maintain their investment autonomy and will have access to broader resources to benefit clients.
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.
1. Source: Bloomberg as of 21/10/2024.
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