We’re barely into 2024 and the commentators are, with some justification, turning a critical eye to the UK equity market once again. The FTSE 100 marked its 40th birthday in early January, inviting all manner of takes about its underwhelming performance versus the likes of US-listed stocks over time. As Susannah Streeter, head of money and markets at Hargreaves Lansdown, put it, the index “hit middle age with a confidence crisis”, even if it also retains its positive traits (such as income generation).
As with some other relatively unloved markets (think Europe for one), it’s easy to assume that the UK market will continue to underwhelm, or offer little in the way of interesting, dynamic companies. But such perceptions, if they become ingrained and widespread, can offer up some good opportunities for stockpickers.
It’s with that in mind that I observe how, in a 2023 once again marked by the fierce outperformance of US tech, some UK equity funds with a value bias quietly posted huge gains. Ninety One UK Special Situations (GB0033063636) made an enormous 27.4 per cent total return last year, with Artemis UK Select (GB00B2PLJG05) up by 19.1 per cent, Man GLG Undervalued Assets (GB00BFH3NC99) up 16.2 per cent and Schroder Recovery (GB00B3VVG600) up 13.1 per cent. It won’t match the meteoric rise of a position in Nvidia (US:NVDA) over the same period, but it’s still a very chunky return.