Ben Conway, chief investment officer and head of fund management at Hawksmoor Investment Management, discusses why he favours the UK and Japanese equity markets.

At a media event in London this month, Ben Conway at Hawksmoor Investment Management underlined the case for investing in UK equities, saying it is an undervalued market.

“I am excited about the UK market. It’s done so well this year, outperforming the US, I’m frothing at the mouth,” Conway said at the media event. “UK mid-small caps, in particular, offer strong investment opportunities as the sentiment is so negative.” 

“The UK equity market is very undervalued and it’s offering positive returns,” he continued. “We are overweight in the UK market. We have also liked the Japanese market for a long time – which remains cheap – and we continue to do so.” 

He is not alone in his views. Alec Cutler at Orbis Investments also recently made the case for investing in UK and Japanese firms, saying that they are undervalued markets.

Cutler is heavily overweight in the UK, Japanese and Korean markets, slightly overweight in Europe and very underweight in the US. “We favour UK mid-small caps," Cutler said. Graham Ashby, UK all cap fund manager at investment manager Schroders, also believes now could be a good time for investors to increase their exposure to UK shares. See more commentary here and here.  

Big consolidation in wealth management industry
Under pressure to maintain margins in a world of ever-increasing costs, Conway also highlighted how wealth management has experienced an unprecedented wave of consolidation in recent years, with no sign of a let up.

With firms getting bigger and bigger, Hawksmoor believes that clients are being offered an increasingly homogenised product, and that too many portfolios resemble passive funds.

Whilst recognising the benefits of passive solutions and their place in client portfolios, Hawksmoor doesn’t see this as the only game in town. Conway believes that small is beautiful; he highlighted the importance of smaller open-ended funds, saying the larger the fund the lower the probability of outperformance. He also favours diversified portfolios, which are genuinely different.

Headquartered in Exeter, Hawksmoor, which has offices across the UK, including London, Bath, Harrogate, Salisbury, Taunton and Worcester, has over £5 billion ($6.4 billion) of assets under management and advice.