“My long-term perception is that quality businesses in the UK will still ultimately outperform the index,” Sanlam’s head of global equities clarified.
“But the sad thing is we’re seeing fewer and fewer good businesses in the UK.”
In capital terms, the UK stock market has lost about 20% over 10 years, said Fourie, with dividends making up for some of that loss.
And with sterling still at weak levels, UK companies are susceptible to becoming acquisition targets.
“The last few months have shown that even Unilever is not immune to a takeover proposition. That is quite scary for UK fund managers,” he said.
The stock picking landscape is even more dismal in Europe, he believes, particularly when measured against the high-growth opportunities in the US.
“With the exception of cost cutting, there isn’t really much organic growth in Europe today,” he said.
To make matters worse, there is a “stealth elephant in the room” in Europe in the form of increased competition from China, particularly in the industrials and manufacturing spaces.
“That’s why you’re seeing competitors like Woodford launching global funds,” he argued.
“It’s a realisation quite late in the day that perhaps global is a much better place to be than the UK itself.”
Instead, Fourie’s Dublin-based Ucits vehicle counts FTSE 100 consumer staple stocks like Unilever and Diageo, American medical device company Medtronic and Google parent company Alphabet among its top 10 holdings.
