Indiscriminate selling of UK consumer shares is creating opportunities that can be exploited, according to Alexandra Jackson and Jo Rands, fund managers on the Rathbone Recovery fund.
In the wake of the vote to leave the EU and President Donald Trump's electoral victory, many UK consumer discretionary companies have sold off markedly as investors favour the 'reflation trade' and shun consumer exposure. There are understandable fears that rising inflation and heated Brexit negotiations will hurt earnings for domestically-focused companies. It is possible that UK retailers and consumer product businesses become caught in a painful profits pincer: revenues could soften because of lower consumer spending while costs rise, eating into margins. Recent inflation data...
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