Despite the uncertainty sparked by Brexit, remaining invested or increasing allocations to the unloved UK market is the right thing to do, according to FE Alpha Manager Leigh Himsworth.
Himsworth (pictured), who has managed the five FE Crown-rated Fidelity UK Opportunities fund since 2011, said a point has been reached where the relative rating of the UK market is not too dissimilar to the levels seen during the banking collapse of 2008. 
As such, he said those with a reasonable time frame for returns should consider investing in companies listed in the home market, as the current backdrop has led to a good entry point for UK equities.
“We have reached a point where the relative rating of the market is not too dissimilar – if you take into account forecasts – to where we were in 2008 or 2009,” he said
“So, what we face now is worse than the collapse of the banking system, what we face in terms of the negotiation is the worst outlook for equities in a long time.
“I think if you have a reasonable time frame for returns this is a very good entry point for equities that trade at big discount to most of their comparable markets. There are many attractive opportunities, so it is a reasonable time now if you want to get involved.”
Over the two years since the referendum in June 2016, Brexit has hung over investors heads, with many fund managers taking neutral or underweight positions in UK equities and the UK market underperforming over the period.
Performance of indices since EU Referendum
Source: FE Analytics
However, according to Himsworth, a point of peak pessimism has been reached, with markets already pricing in the worst of it.
But, as agreements are reached, steps are given towards approving the current proposed Brexit deal and we get closer to the official leaving date, all the uncertainty will gradually vanish, noted the Fidelity manager.
“We will be looking back in maybe one year and we will probably agree that chances have come up today for investors at a sensible price,” Himsworth said.
“Looking at a couple of years from now, we will be more driven by bond yields and the economic outlook than by politics.
“We will get through this. It feels horrible at the moment, as it does in any period of uncertainty and you go back to 2008 and it felt wrong to invest at that time, but it was the time to do it.”
According to the veteran UK investor, not only does the UK stand very positively in many different ways but when going through it sector by sector, attractive opportunities can be found that make it worth looking through short-term noise.
“I think what we are seeing at the moment is because Brexit is on every news channel 24/7 and people are talking about short-term implications. But I think over a reasonable time frame we do get some form of agreement at least that takes a huge lot of uncertainty away from us,” he said.
“There are lots of opportunities that will still be there: intellectual capital will remain, we have some of the best universities in Europe, etc.
“And there are some companies, like the miners or BP and Shell that – whether we have a soft, hard or medium Brexit– are going to continue running their businesses the same way as they do today.”
Performance of stocks since EU referendum
Source: FE Analytics
Although there are businesses that will be affected by a change in the relationship with Europe, Himsworth emphasised on the resilience of the vast majority of the stock market.
Agreeing with Himsworth, Bill McQuaker, who oversees several Fidelity multi-asset strategies and heads up the Fidelity Open World fund, highlighted the UK market possesses certain features – such as its defensiveness – that differentiate it from other developed markets.
For McQaker, there is “a lot to like about the UK”.
“The UK market is quite a defensive market. There are stocks that will hold out well,” he said.
“The stock market is largely unloved by global money, so there is not a lot of flaky money in the UK stock market at the moment and that is quite a welcoming thing.”
According to the multi-asset manager, if there is going to be a deterioration in global markets, investors won’t be selling the UK.
“When I look at market valuations, the UK looks like it’s very fairly priced now and the currency is also very fairly priced, so I see quite a lot to like about the UK,” he explained.
“If it turns out that life is going to be more difficult, we should be performing better than the main current markets,” concluded McQuaker.
Under Himsworth, Fidelity UK Opportunities has delivered a 106.40 per cent total return compared with a gain of 72.38 per cent for the average fund in the IA UK All Companies sector and a 65.13 per cent rise in the FTSE All Share.
Performance of fund vs sector and benchmark under Himsworth
Source: FE Analytics
It has an ongoing charges figure (OCF) of 0.95 per cent.