The FTSE 100 has breached 9,000 for the first time, prompting renewed optimism around the outlook for UK equities. Here, two leading investment managers share their views on what’s driving the rally, where they see opportunities, and why the next market cycle may favour the UK.
Jurassic Park Rebirth: Why the FTSE’s ‘un-disruptables’ could lead the next bull market
Darius McDermott, managing director at Chelsea Financial Services:
Disciplined, long-term investors who tuned out the noise and resisted the urge to panic sell are being vindicated today as the FTSE 100 breaks through the 9,000 mark.
Those who sounded the death knell for the index, dismissing it as a ‘Jurassic Park’ of outdated stocks, have underestimated some of the most important themes set to define the next market cycle.
We’ve left behind the era of zero interest rates and ‘growth at any price’. In today’s world of inflation, capital constraints, and geopolitical disruption, markets are once again rewarding value, cashflows and resilience. At the same time, the capital-light business models that dominated the last decade now face disruption themselves, as artificial intelligence and the democratisation of the internet threaten to erode traditional business models.
In contrast, many of the long-neglected, capital-intensive sectors at the heart of the FTSE – banks, defence, building materials – are proving not only resilient, but essential. These ‘un-disruptables’ are back in favour and look increasingly well-positioned to lead the next cycle.
The index might lack the glamour of Silicon Valley – but that may be exactly what gives it the staying power to outperform from here. Furthermore, while 9,000 is a new high for capital values, it doesn’t account for the FTSE’s exceptional income story, which is underpinned by decades of steady dividend payments.
We favour funds such as Jupiter UK Dynamic Equity and CT UK Equity Income, both of which offer diversified exposure to high-quality UK large caps backed by experienced managers. Historically, large-cap outperformance often precedes a broader market recovery, during which UK smaller companies have historically done well. When small caps move, they move fast. IFSL Marlborough Special Situations, with its focus on small and mid-cap names, is well positioned to tap into that opportunity.
Global tailwinds and trade optimism fuel FTSE momentum
Jonathan Unwin, UK head of portfolio management at Mirabaud Wealth Management:
The FTSE 100 hit the 9,000 mark for the first time today, recovering alongside global stocks since the tariff sell-off in April. With around 60% of its revenues generated overseas, the index has continued to benefit from an improving international outlook, with expectations of tariff deadline extensions and trade deals becoming investors’ base scenario.
The UK market has acted as something of a safe haven amid global trade uncertainty in recent months, thanks in part to the UK quickly striking a trade deal with the US. Expectations of UK rate cuts are further supporting rate-sensitive stocks, while the currency drag from dollar weakness has largely played out at this stage.
Foreign investors are gradually starting to return to UK markets, though domestic flows remain an area of weakness. While political and fiscal uncertainty persists, private sector activity picked up in June, and there remain many quality businesses that we expect to show earnings strength.
