Unicorn UK Income Fund holds publican Marston’s and Cineworld Group within its top-10 holdings, and co-fund manager Fraser Mackersie says the consumer remains the portfolio’s strongest theme.
“The UK consumer is in a strengthening position as a confluence of factors combines to increase discretionary spending power: rising disposable income; imported deflation through the falling price of oil; and falling prices of consumer staples,” he explains.
“Consumer confidence should therefore continue to improve while unemployment has now fallen to pre-crisis levels.
“We believe the interest rate outlook remains favourable for the consumer in what has become a ‘lower for longer’ environment, and, in any event, possible near-term rate rises are likely to be modest and have little material impact on consumer spending power.”
Still, with so many consumer facing firms reporting in the first few weeks of the year, we could be in for more January blues before these long-term factors kick in…. and that’s before we even discuss the weather.
