UK Mid Cap: navigating market volatility

By Mark Martin, Head of UK Equities at Neptune Investment Management

Recent UK GDP figures indicated that the economy is in good health, with a 0.5% rise in GDP in the final quarter of 2015. Whilst the GDP growth rate fell from 2.9% in 2014 to 2.2% in 2015 as a whole, this expansion – coupled with last quarter’s strong performance – gives us cause to remain bullish on the UK economy.

Despite this, concerns about China’s economic activity and growth rate continue to unnerve investors. We believe such fears are overplayed. Europe, where we believe we are reaching an inflection point, is the UK’s largest trading partner, with emerging market demand having much less of an impact. This is particularly so for the mid and small cap parts of the market, where we are focused. Further, we believe China’s path of gradual slowing growth and rebalancing away from a manufacturing to a service-led economy will be positive in the long term.

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