Anglo-South African asset manager Ninety One discusses investment opportunities across the UK market from a quality and value standpoint, key trends across the UK equity landscape, as well as specific stock examples.

Experts at Ninety One have highlighted how the UK market has been overlooked and undervalued for over a decade; they outlined top stock picks.

“While global uncertainty remains high, the UK’s defensive market has proven resilient,” the firm said in a note. “Domestic headwinds are beginning to ease, with rate cuts on the horizon and improving sentiment. In a world of stretched valuations, the UK’s relative value is becoming hard to ignore.”

“The tide is turning,” Tom Peberdy, managing director, UK client group at Ninety One, said at a media briefing. “The UK is home to a rare blend of high-quality domestic businesses and global leaders, many of which are trading at appealing valuations. These have recently been supplemented by improving fundamentals and more disciplined capital allocation,” Alessandro Dicorrado, portfolio manager, head of value at Ninety One, continued. “UK stocks are still cheap, with attractive returns.”

Despite a strong first half of 2025, the UK equity market still trades at a substantial discount to other major markets. “The UK has gone from being one of the world’s most unloved markets to one of its most compelling opportunities. Investors are waking up to the disconnect between sentiment and fundamentals – and those willing to look through the noise stand to benefit meaningfully,” the firm continued.

Recent trade deals with the US, India and the European Union could also help improve sentiment.

“Crucially, the UK market offers a powerful blend: high-quality, undervalued domestic firms alongside global leaders trading at discounts to international peers. This creates fertile ground for building diversified, value-rich portfolios,” Anna Farmbrough, UK quality portfolio manager at Ninety One, said. 

UK companies are also strong in share buybacks; they reward investors with generous dividends in the developed world. Additionally, UK companies return cash to shareholders with particularly generous dividends relative to most other advanced economies, the firm said.

Ninety One is not alone in its views. Alec Cutler at Orbis Investments also recently highlighted the case for investing in UK firms, saying it is still an undervalued market. Cutler is heavily overweight in the UK market. “We find great UK firms that are very cheap as no one is interested in them,” Cutler said. 

Stock picks
From a quality perspective, the UK has a lot of companies with competitive advantages and the ability to make attractive returns on capital. Ninety One cited investment platform AJ Bell as a successful disruptor in a growing UK savings market. Additionally, British pub JD Wetherspoon reinvests in pricing every year to keep costs down for its clients, the firm said. These businesses can deliver compounding free cash flow per share as their returns on capital persist at high levels and defy mean reversion.

Ninety One argued that the UK remains attractive for value investors – not just because of relatively low valuations, but due to the market’s breadth, depth, and behavioural inefficiencies that create mispricings. Its mix of sectors means that opportunities shift over time, rewarding flexible, fundamentals-based investors.

For instance, despite heavy pressure on the travel sector during Covid, low cost airline Jet2’s end-to-end control of the customer journey enabled it to gain market share and emerge stronger. The market has reflected that resilience in its share price, the firm continued. Another top stock pick for Ninety One is UK aerospace company Melrose.

“The stability of some of the country’s large businesses, be it in consumer staples, pharma or retail, offers investors defensive exposures at attractive valuations, as opposed to the premiums that one normally is required to pay for this return profile,” Ninety One said.

Based in London and Cape Town, Ninety One is a global investment manager managing £130.8 billion ($178 billion) in assets.