Key takeaways:
- Though the UK stock market has been quite resilient compared to global peers, its performance has largely been driven by the top 20 largest stocks. Meanwhile, the more cyclical smaller-and-medium sized businesses have struggled.
- We have been lowering our gearing and increasing our bond exposure for a more defensive positioning. The equity portfolio also has a bias towards defensive and more resilient businesses that can navigate a downturn.
- Valuations in the UK market remain attractive, especially when you look at the P/E ratios relative to other developed markets. While political uncertainty still remains, this valuation gap provides an attractive entry point for investors with long term horizons.
