It might be time to consider the ‘most hated, under-owned asset class,’ says this strategist

StoneX head of global macro strategy Vincent Deluard highlighted that U.K. equities have become the most hated and under-owned asset class globally, creating potential tactical value for investors. Deluard pointed out that British defined-benefit pension schemes have dramatically curtailed their domestic equity exposure from roughly 50% historically down to an average of about 5% today. However, he argued that the post-Brexit selloff in U.K. assets has largely run its course and is now effectively exhausted. While political instability and frequent leadership changes have weighed heavily on sentiment, emerging macroeconomic indicators suggest subtle resilience. Official data from the Office for National Statistics showed U.K. gross domestic product expanded by 0.4% in July, surpassing market expectations of flat growth. Although Deluard is not outright bullish on British equities as standalone positions, he suggests pairing long U.K. equity exposure with short euro trades against the Japanese yen due to escalating sovereign debt and political risks across continental Europe.