Seeking out opportunity
Themes of uncertainty for continued from '22 into '23 into '24, as we continue to grapple between inter-plays of inflation and monetary and fiscal policy and corporate earnings. But the outlook really for us hasn't changed, gradual economic recovery, both UK, more globally, falls in inflation.
Swimming against the tide
We are making history. We are in the deepest and most severe and longest drawdown of mid-caps versus large caps that we have on record. That, ultimately, obviously explains the poor performance on an asset class basis in the last two years.
UK with a healthy dose of realism
Hopefully, these three different buyers shine a light on the inherent value in this space. It's not because of bad fundamentals. It's about flow. And at some point, that flow dynamic will change.
Navigating the inflation landscape
But that to me all points, I believe, to a picture that inflation will continue to fall. And I think, therefore, it's increasingly unlikely that interest rates can stay where they are. And so I think we will see a change in that front. And that to me is the big catalyst for re-rating this space.
