Forecast UK economic growth and continued recovery in business expenditure levels mean investment opportunities in coming months will exist at all levels of the market, not just big caps says Ajay Gambhir, co-manager of the JPMorgan Fleming Dynamic UK fund.
In terms of sectors the fund is currently focused on transport, media, technology, real estate and hotels, which Gambhir believes offer the best link to fast-growing earnings and profits.
“As bottom up stock selectors we are presently able to find attractive value and momentum opportunities across the market cap range, which we believe will perform strongly in today’s environment,” he says.
The UK has outperformed most of the G7 over the past few years thanks to strong consumer spending fuelled by secured lending against rising house prices, and increasing public spending.
What is missing to push the economy along has been business investment. Gambhir sees this changing, with companies looking to start spending on upgrading old and inadequate infrastructure on the back of stronger balance sheets and an improving global economy.
The Bank of England is widely expected to raise interest rates later today in response to stronger growth in services, manufacturing and consumption, which risk pushing up UK inflation.IFAonline
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