StoneX strategist calls UK stocks the least represented in portfolios
UK stocks are among the least represented in portfolios and least popular asset classes in the world, according to Vincent Deluard, head of global macro strategy at StoneX. He said this on a podcast, MarketWatch reports.
According to Deluard, UK defined-benefit pension schemes previously held about 50% of their assets in domestic stocks, while the average share is now about 5%. He noted that the UK is experiencing political instability and has changed seven prime ministers in a single decade.
Pension fund share
At the same time, the strategist believes that the sell-off in UK assets following the Brexit referendum in June 2016 has already largely run its course. He also noted that UK stocks have somewhat outperformed other regions, while economic indicators have generally been better than expected.
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Currency position
The UK Office for National Statistics reported that the country's GDP grew by 0.4% in July, while economists had expected zero growth for the month.
Deluard stressed that he is not bullish on UK stocks and does not suggest considering them as a standalone investment. In his view, long positions in UK stocks can be combined with a short position in the euro against the Japanese yen.
The strategist believes that the euro has problems similar to those faced by the yen in the 2010s, and overcoming them may require significant currency depreciation. He also linked risks for Europe to increasing political polarization in France and Germany.
