He believes there is a buyer strike on UK assets and agrees that equities are underowned.
He adds: “Business investment has been suppressed and while inventory building has provided some short-term buoyancy, most firms are still presenting a very cautious outlook.
“That’s discouraging a lot of potential investors who might otherwise be attracted to the UK.”
Putting Brexit to one side, Mr Clark highlights the economic factors of strong employment figures and scope for upward wage pressure on consumer demand.
He says: “There’s a point where reasonably healthy economic data, combined with attractive valuations, does give investors cause to believe there may be a buying opportunity in UK equities.”
The ground view
Taking a temperature check from advisers, there is no sense that a crisis of confidence is rife.
Alistair Cunningham, financial planning director at Wingate Financial Planning, explains that as the company principally allocates assets strategically, he has not seen any significant shift in the recent past, though he acknowledged a small reduction to UK equity holdings since 2016.
He adds: “Uncertainty may be part of the broader change, as while the UK outlook may not necessarily be worse, the very good and very bad outcomes would seem to be wider, without the commensurate payoff in terms of anticipated returns.”
Ricky Chan, director at IFS Wealth & Pensions, however, says there has been an outflow from corporate bonds in recent months.
“Since October 2018, there has been six consecutive months of outflows totalling £1.8bn, and a large spike in outflows in UK gilts in February, of £110m.”
If the UK/EU deal is secured, which results in better forecasted long-term prospects, Mr Chan thinks investors would find UK opportunities.
While he has also seen corporations relocating headquarters abroad, Chan adds: “I’m sure outflows will reverse as markets have always gone in cycles.”
Market impact
More recently the industry has begun to seen a tangible impact on trading announcements.
In an April update, Premier Asset Management’s chief executive Mike O’Shea said: “Notwithstanding net outflows for the industry as a whole, it is encouraging to note that support for our multi-asset funds remained positive during this more difficult period, with net inflows of £125m over the six months.
“We did however experience net outflows from our UK equity funds, a sector which has been out of favour for some months.”
But the wider story is not all about confidence drying up.
The multi-manager investment team at BMO Asset Management told Financial Adviser’s sister publication FTAdviser in April it has been buying funds run by managers who are happy to invest in UK domestic shares, rather than in international-earning companies.
One of BMO’s moves was for the £1.1bn Man GLG UK Undervalued Assets fund, managed by Henry Dixon.
