Brexit

Georgina Brittain describes herself as first and foremost a “bottom-up stockpicker”. She is the manager of various funds, including JPMorgan UK Smaller Companies fund and the JPMorgan Mid Cap and Smaller Companies investment trusts. A barrister by training, her career with the firm began almost exactly 25 years ago when she joined Flemings, which through a series of mergers and acquisitions eventually became JP Morgan Chase.

Santa rally or election elation? The UK stockmarket posted its biggest gains for more than three years in the week following Boris Johnson’s landslide election victory on 12 December, despite a simultaneous jump in the value of sterling that might have been expected to hit large firms with hefty international earnings.

Since June 2016 the uncertainty surrounding Brexit has weakened the pound and turned the UK stock market into an uncertain place for investors. Over this period the FTSE 100 index has lagged the MSCI World index by 2.1% a year and experienced around 10% more volatility.

The UK stock market is “on sale” and could enjoy a bounce if the Conservative Party win a majority at the upcoming general election, argues Mark Slater, manager of the Slater Income, Slater Growth and Slater Recovery funds.

For the past three years, readers of the financial press will have heard countless times that the UK stock market is ‘cheap’. Investors fearing the worst outcome from Brexit, as well as the potential of a Labour government coming to power, have turned their backs on UK shares, pushing the market to supposedly attractive valuations for the more contrarian-minded. This is certainly the view of Richard Staveley, a fund manager at Gresham House Strategies.

Many football fans of a certain age will remember the ‘knee-trembling’ experience of heading down to the Old Den, Millwall’s former football ground. My first experience there was shortly before they closed it down to move to the slightly less terrifying New Den to watch my team, Watford, suffer a characteristic hammering in February 1993. Walking up the suitably named Cold Blow Lane to the away end, and hearing the famous “No one likes us, we don’t care” from the Millwall faithful, will last long in the memory. The football was less memorable.

There is intense debate among our asset allocation panellists and the teams who support them, about the dangers of a global recession next year. Schroders’ Keith Wade has likened the world economy to a wobbly bike where growth momentum has become so weak that any bump in the road could topple it – if not next year, then in 2021.