The UK Has a Better Story to Tell

Andrew Sheets argues that investor negativity on the UK is overdone. He highlights UK equity performance that nearly matches the US, a resilient pound, and a relatively better fiscal and bond backdrop. The implication is that UK assets may outperform low expectations. - UK market returned 82% over five years versus 85% for the S&P 500 despite no large UK technology companies. - British pound has gained against the US dollar over the past decade and outperformed several major currencies. - UK household and corporate savings rates are rising, which could support growth if they stabilize or fall. - UK debt-to-GDP around 96% compares favorably with China, France, the US, and Italy, and the deficit is forecast to shrink by 2027. - UK 10-year bond yields have risen less than US and Japanese yields year-to-date. - New UK prime minister policy and energy price sensitivity are cited as risks to watch.