UK equities have been out-of-fashion but are well suited for the current environment, with low starting valuations – extreme discounts relative to the global benchmarks – and a range of strong, cash generating companies that hook into an environment of solid nominal growth and can protect against the risk of inflation spikes in the short (or longer) term. As ever, our philosophy and process lead us to companies and industries where today’s valuations don’t accurately reflect the outlook. In several cases within the portfolio, such as Essentra or UK domestic banks, we believe this is above all due to a backwards looking period of share price underperformance, which can cause investors to dismiss or not put enough weight on clear evidence that business fundamentals are improving. Finally, we see the chance of a proper investment boom – the first for many years – as reasonably high. The policy mix of strong fiscal and monetary policy which is very supportive (but gradually getting less so) provides ideal conditions, and many companies underinvested during the ‘lower-for-longer’ 2010s and are running at full capacity. The highest probability of an enduring boom relates to decarbonisation enablers, to which we have exposure via holdings such as Weir.