Old Mutual Global Investors UK equity fund manager Richard Buxton says he doesn’t hold much hope for UK growth.
“We are in a difficult place in the UK at the moment,” Buxton told today’s AJ Bell Investival conference, adding that it is the “most unfavourable markets I have ever seen”.
“I don’t hold much hope in UK growth after the rally in sterling which will continue to weaken,” the OMGI UK Alpha fund manager says.
“The economy won’t fall off the cliff post UK referendum but it will slow next year but we won’t go through a recession.”
Buxton expects “two or three years” of uncertainties over the UK’s relationship with Europe.
“Consumers will be more conscious as next year you will see a pick up in inflation in the second half of next year.”
He says the Trump election will be a turning point for markets and for the end of monetary policy and the beginning of a possible more loose fiscal policy for the US.
However, he says there are still “real opportunities for investors”.
Since the start of the year he moved from staple names into financials which makes 22.8 per cent of his fund while consumer staples are 4.4 per cent.
He describes mega caps in his fund over the past 12 months as “very undervalued”.
Buxton has been adding to international companies with dollar-orientated earnings as sterling weakens, such as GlaxoSmithKline, which accounts for 4.9 per cent of the portfolio, and Vodafone, which accounts for 4.2 per cent.