Uncertainty over how, when and if the UK will leave the European Union (EU) has made international and domestic investors flee this country's equity market. Valuations of UK shares are relatively low, with the market on a price/earnings (PE) ratio of 13.2 compared with 16 for MSCI World index.
Long-term outperformance
Dividend growth
Broad exposure to undervalued UK equities
Discount to NAV
Smaller company and Aim volatility
Relatively high ongoing charge
The area of the UK market that investors are most cautious on is smaller companies, which tend to be more exposed to the UK economy and consumers. So, in 2018, while the large-cap FTSE 100 index fell 8.7 per cent, the FTSE Aim All-Share index fell 17.1 per cent and the FTSE 250 was down 13.2 per cent.