At a media event in London last week, experts at Edinburgh Investment Trust discussed the macroeconomic environment, the outlook for 2026 and outlined top UK stock picks.

UK equities, which delivered a strong performance in 2025, are undervalued and very attractive, according to Imran Sattar, portfolio manager of the London-listed Edinburgh Investment Trust.

Sattar is more upbeat about the outlook for the UK stock market, which has one of the highest levels of non-domestic earnings of any market and attractive valuations, than the economy. He emphasised the higher global geopolitical risks, weaker UK employment with a 5.1 per cent unemployment rate, and the need to find stocks that can withstand the tougher environment.

The trust, managed by the Liontrust Global Fundamental team since 2020, focuses on investing in large caps, with a diversified portfolio of 40 to 50 listed UK stocks. It aims to exceed the total return on the FTSE All-Share Index and grow its dividend faster than UK inflation. It has shown strong performance over the past five years, outperforming the index. The trust currently trades at a 6.4 per cent discount to the net asset value. The gearing ratio of about 5 per cent makes the company’s share price performance relatively volatile, which could prove to be an asset rather than a liability.

Top 10 holdings include London-headquartered mining company Anglo American, a top five global copper producer. Copper demand is surging, driven by the green energy transition, electric vehicles and growth in artificial intelligence data centres; it is forecast to grow by over 40-50 per cent by 2040. Geneva-headquartered Swiss private bank Union Bancaire Privée has also increased its exposure to mining recently, highlighting the high demand for commodities such as copper. See here.

Another top holding for Sattar is Greggs, a UK vertically integrated food-to-go retailer, and the UK's Dunelm, a homeware chain. Sattar recently invested in London-headquartered RELX, an information and analytics multinational and AI beneficiary. He also invested in the London Stock Exchange Group and London-headquartered electricity and gas utility mutinational National Grid. Sattar has a large position in Nat West Bank, consumer healthcare company Heleon and multinational Unilever.

A number of investment managers are positive on UK equities in 2026. Global investment manager, Ninety One, for instance, believes that UK equities stand out for investors seeking diversification away from the US.

“The UK remains an attractive place to invest for those seeking an alternative to the concentrated US trade with its mix of well-run domestic businesses and global champions, both of which are trading at relatively low valuations. Even after a strong year, UK equities trade at a substantial discount to other major markets, even comparing sectors like-for-like,” Alessandro Dicorrado, value portfolio manager at Ninety One, said (see more here). While the US market continues to look expensive, the UK offers a broad and diverse opportunity set for bottom-up investors. Alec Cutler at Orbis Investments, is also overweight in UK equities.