SWIP's outlook for UK equities remains positive

Rigorous company research neutralises short term volatility for SWIP UK funds Scottish Widows Investment Partnership's (SWIP's) outlook for UK equities remains positive despite the recent drop in the UK market.

Valuations still compare favourably to gilts and equities in other countries and SWIP expects the market to perform in line with growth in company profits during 2007, with gains of around 5 to 8 percent.

Robert Waugh, Head of UK Equities, at SWIP comments: "Although the underlying sentiment behind this apparent change in investor mood may lead to further falls in share prices, it has not fundamentally changed our view of the market. The level of dividend growth has generally exceeded expectations, which from a market perspective is healthy."

SWIP places greater importance on fundamental analysis of companies than short term market sentiment and this approach has been driving excellent performance of SWIP's UK equity funds. SWIP examines the prospects for a company over a five-year time horizon producing in-depth analysis that can be shared within the team.

Robert Waugh continues: "Our approach helps us to construct portfolios that neutralise short term market volatility by identifying the best opportunities through in-depth analysis of companies. We challenge the investment case for each holding and this open and honest debate creates real understanding of the reasoning behind a recommendation over the long term."

From an economic standpoint, SWIP says the UK has considerable momentum in the short term. This may slow down a little later in the year, as the environment for exports becomes more difficult and business investment slows from its recent strong pace. Taken as a whole, though, the domestic economy seems to be in reasonably good shape.

SWIP's UK equity funds have a minimum investment of £1,000 and are available on all the main IFA platforms. Retail investors should contact their IFA to access the fund or visit unbiased.co.uk if they do not have an IFA.