DIY Investor Magazine
/
2015 Issue
10
“We have long been more optimistic than
most about the prospects for the domestic UK
economy and expect Britain’s growth to surprise
further in 2015. In 2014, British companies
(excluding oil stocks) were at their most profitable
in almost 16 years according to the ONS (Office
for National Statistics).
Better economic prospects are set to be
supported by continued low inflation, signs of a
long awaited pick-up in real take-home pay with
the possibility of a further lift thanks to a lower oil
price and lower food prices.
A pre-election rise in personal tax allowances
at the basic and higher rates, alongside reforms
to stamp duty should also help consumers.
The main uncertainties to this outlook are the
UK’s heavy debt burden and the likely knock-
on effects of slower growth in the eurozone and
some emerging markets. The former is affected
by weak tax revenues (because of weak average
earnings and a reduction in the tax burden at the
low end of the income scale) while anticipated
‘money printing’ in the eurozone is unlikely to
boost growth there.
If recovery in the US continues, then a stronger
dollar is likely to put pressure on some emerging
markets. Our equity positions retain a focus on
the UK and remain in companies we believe have
potential to deliver rising dividends.
Capacity discipline (the process of managing
supply and demand to keep the market in
balance), then creates pricing power and this
is one of our investment themes that in our
view has the potential to serve us well in a low
growth environment. Consequently we have
continued to build positions in various airlines,
motor underwriters, house builders and certain
other companies which have increased returns to
shareholders in the absence of better alternative
investment opportunities. We continue to see value
in our domestic plays.”
JUPITER AM FUND MANAGERS
GIVE THEIR OUTLOOK FOR 2015
THE SHARP DROP IN OIL PRICE IN 2014
WILL ALMOST CERTAINLY ALSO HAVE
AN IMPACT IN 2015. IT IS ALREADY
TRANSLATING INTO A DELAYED ACTION
“TAX CUT” FOR CONSUMERS ACROSS
THE WORLD
UK - ALASTAIR GUNN AND RHYS PETHERAM,
MANAGERS OF THE JUPITER DISTRIBUTION FUND:
