UK market backdrop satisfactory

Although we believe the outlook for the UK stock market is fair, with interest rates at or near their peak, corporate profitability still enjoying a post year 2000 boost, and takeover activity still high, the prospect of 15-20% overall market returns is low. To achieve these sort of returns investors will have to choose something other than the market as a whole, which either means choosing the right sectors or the right stocks. Over the past five years, choosing the right sectors has been the main driving force behind the returns from UK Growth funds. In 1997/98 banking shares performed...