{"id":1017803,"date":"2026-06-10T15:38:19","date_gmt":"2026-06-10T15:38:19","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/1017803\/"},"modified":"2026-06-10T15:38:19","modified_gmt":"2026-06-10T15:38:19","slug":"brexit-10-years-on-are-uk-shares-going-to-be-this-cheap-forever-the-armchair-trader","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/1017803\/","title":{"rendered":"Brexit 10 years on: Are UK shares going to be this cheap forever? \u2013 The Armchair Trader"},"content":{"rendered":"

Nearly ten years after Britain voted to leave the European Union, fund managers overseeing some of the UK\u2019s oldest investment trusts believe the lasting legacy of Brexit for investors may be less about economic disruption and more about valuation.<\/strong><\/p>\n

While the referendum triggered years of political uncertainty, subdued economic growth and persistent international scepticism towards UK assets, many professional investors now argue that the resulting discount attached to British equities<\/a> has become increasingly difficult to justify.<\/p>\n

That view emerged from a discussion hosted by the Association of Investment Companies (AIC), which brought together several leading UK investment trust managers to assess the impact of Brexit on listed companies and the prospects for the London market over the coming decade.<\/p>\n

Value opportunity for stock buyers<\/p>\n

The verdict was strikingly consistent: Brexit may have contributed to a prolonged period of underperformance and capital outflows, but it has also created one of the most compelling valuation opportunities in developed markets.<\/p>\n

\u201cThe main reason for optimism is that the valuation starting point is just so low now,\u201d said Mark Niznik<\/strong>, manager of Artemis UK Future Leaders [LON:AFL], which focuses on smaller and medium-sized UK companies.<\/p>\n

According to Niznik, the median company in his portfolio is expected to grow earnings by more than 10 per cent next year while trading on just nine times forecast earnings. Many businesses also generate strong cash flows, deliver returns on capital above 20 per cent and carry little or no debt.<\/p>\n

Such valuations have not gone unnoticed by corporate buyers. Niznik noted that 38 portfolio holdings had received takeover bids over the past six years, at an average premium of 48 per cent.<\/p>\n

Overseas buyers can see the bargains<\/p>\n

The prevalence of mergers and acquisitions has become a recurring theme in the UK market. Dominic Younger<\/strong>, manager of CT UK Capital and Income Investment Trust [LON:CTUK], said overseas buyers and company management teams appear increasingly willing to exploit what they see as a disconnect between share prices and underlying business value.<\/p>\n

\u201cWe think there is a clear mispricing, even if public markets remain sceptical,\u201d he said.<\/p>\n

The UK\u2019s valuation gap relative to international peers remains substantial. Younger estimates that British equities continue to trade at a discount of around 30 to 35 per cent to US stocks on a price-to-earnings basis, with the deepest discounts found among smaller companies.<\/p>\n

For many investors, however, Brexit is only part of the story. A succession of shocks since 2016 \u2013 including the pandemic, the energy crisis triggered by Russia\u2019s invasion of Ukraine and more recent geopolitical tensions in the Middle East \u2013 have reshaped investment preferences globally.<\/p>\n

Simon Gergel<\/strong>, lead portfolio manager of The Merchants Trust [LON:MRCH], said these events have driven repeated and often dramatic rotations between sectors, creating periods when market prices have diverged sharply from companies\u2019 long-term fundamentals.<\/p>\n

The closed-ended structure of investment trusts has proved advantageous during such periods, he argued. Unlike open-ended funds, investment trusts are not forced to sell assets to meet investor withdrawals, allowing managers to take a longer-term view when volatility rises.<\/p>\n

Longer term returns are still robust<\/p>\n

Despite years of political and economic turbulence, the sector\u2019s long-term returns remain robust. According to the AIC, the average investment trust has delivered a total return of 171 per cent since the Brexit referendum, while UK Equity Income and UK Smaller Companies trusts have returned 125 per cent and 96 per cent respectively.<\/p>\n

Managers also see opportunities emerging from structural changes within the UK economy. Gergel expects a sustained increase in construction activity over the next decade as governments seek to address housing shortages, upgrade ageing infrastructure and expand electricity networks.<\/p>\n

Such trends could benefit domestically focused businesses that have fallen out of favour with investors, including housebuilders, construction materials suppliers and specialist manufacturers.<\/p>\n

Meanwhile, some managers are finding opportunities in areas linked to artificial intelligence. Imran Sattar<\/strong>, manager of Edinburgh Investment Trust [LON:EDIN], said the trust\u2019s portfolio had been adding exposure to data, software and analytics businesses that could benefit from AI adoption, including technology reseller Softcat, software provider Sage and the London Stock Exchange Group.<\/p>\n

Has the UK market been overlooked for too long?<\/p>\n

Yet perhaps the most notable shift among UK fund managers is their growing confidence that the market\u2019s persistent discount may eventually narrow.<\/p>\n

Although closer political and economic ties with Europe could improve sentiment, most managers believe the investment case for UK equities no longer depends on the Brexit debate itself. Many of Britain\u2019s largest listed companies are global businesses, while domestically focused firms have largely adapted to the post-Brexit environment.<\/p>\n

The bigger question is whether investors will eventually rediscover a market that many believe has been overlooked for too long.<\/p>\n

After a decade dominated by political uncertainty and persistent pessimism, UK investment trusts are making a simple argument: Brexit may have depressed valuations, but it has also left behind a market rich in opportunities for patient investors willing to look beyond the headlines.<\/p>\n

Related Investment Trusts<\/p>\n

Would you like your funds listed here? Contact us<\/a><\/p><\/p>\n","protected":false},"excerpt":{"rendered":"Nearly ten years after Britain voted to leave the European Union, fund managers overseeing some of the UK\u2019s…\n","protected":false},"author":2,"featured_media":1017804,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5226],"tags":[281658,2036,802,748,281659,2000,299,5187,1699,4884,281657,281660,16,15],"class_list":["post-1017803","post","type-post","status-publish","format-standard","has-post-thumbnail","category-brexit","tag-aic-uk-all-companies","tag-artemis","tag-brexit","tag-britain","tag-columbia-threadneedle","tag-eu","tag-europe","tag-european","tag-european-union","tag-great-britain","tag-the-aic","tag-the-merchants-trust","tag-uk","tag-united-kingdom"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/116726563695637750","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1017803","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=1017803"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1017803\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/1017804"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=1017803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=1017803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=1017803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}