Premier Miton: UK equity market still ‘out of favour’

The UK equity market remains “very much out of favour” among investors, Premier Miton said today, as it reported a sharp drop in pretax profit.

The AIM-listed investment company reported that pretax profit fell to £3.2m in the year to November, down from £5.9m last year.

The firm continued to struggle with outflows, although at a much slower pace than last year. It reported net outflows of £318m, down from over £1.1bn last year.

This was largely concentrated in UK equities, with the firm reporting inflows into fixed income and ex-UK funds.

Nevertheless, Premier Miton’s assets under management (AuM) increased nine per cent year-on-year to £10.7bn, up from £9.8bn last year.

Mike O’Shea, chief executive said: “During the year, we saw continued inflows into our Fixed Income, Absolute Return and International Equity funds although the UK equity market remained very much out of favour”.

Robert Colthorpe, Premier Miton’s chair, said the firm’s results reflect the “ongoing challenges facing investment markets in general and the UK’s savings industry in particular”.

Colthorpe pointed to the major economic decisions made by the government, some of which were positive—like reforms to the regulatory framework—alongside some “more challenging elements,” like increasing financial pressures on businesses.

“While we welcome many well-intentioned changes, further and deeper reforms are likely to be needed to restore our economy to health over the coming years,” he said.

“A large and successful domestic long-term savings market and the efficient allocation of capital into productive domestic investments are essential features for a successful modern economy and is and will continue to be fundamental for the health and wealth of our society.”

Colthorpe said he was hopeful that investor interest in active fund management would pick up as interest rates continue falling. O’Shea said demand would likely be focused on fixed income and US & global equities.