Perhaps It Is Time to Look at UK Equities Again
If you have been following this column since it started earlier this year, you will have noticed our coverage of various initiatives to boost UK equity investment.
Both the UK government and the financial regulator have put forward various proposals to encourage more people to invest in their domestic stock market. These have ranged from the imposition of a temporary or permanent reduction in the stamp duty (tax) paid on transactions in shares of newly listed UK companies and introducing a minimum UK shareholding in tax-free individual savings accounts, to the FCA’s move to ease the reporting burden on UK-regulated firms.
But could the answer lie in simply recognising the value offered by UK equities? The strength of the FTSE 100 this year has raised concerns over concentration, similar to those voiced on the other side of the Atlantic, but some analysts believe this has overshadowed a strong cohort of firms trading at favourable valuations.
For example, Jeremy Smith, portfolio manager for the CT UK equity income fund at Columbia Threadneedle Investments, acknowledges that the index at the top level looks elevated but suggests valuations are low.
UK stocks have always traded at a discount to their counterparts on the S&P, on account of the latter being seen as more of a growth index. However, the relative gap in valuations is currently higher than it has been at any point since the 1980s.
Almost every FTSE leader surveyed by Deutsche Numis in September believed the UK was an attractive market for launching an IPO or raising capital, and that its appeal had increased significantly over the previous 12 months.
One of the key findings of a recent Capital.com survey was that potential investors felt they had the time to educate themselves about trading, which is an indication of the possible benefits of creating a more informed investor base.
Perhaps this process should start by making these individuals more aware of the potential value of the companies they could invest in, and not assume UK stocks offer less value. As the saying goes, ‘assume makes an ass of you and me’.
Will the World Feel the Effects of Seismic Events in Japan?
Precious metals analyst Matt Oliver posted an interesting thread on LinkedIn recently in which he suggested that Japan has just triggered a massive shift in global finance that few market observers seem to be talking about.
His thesis is that since Japan’s 10-year yield hit its highest level since 2008, it is paying an additional $27 billion in interest every year, and that the unwinding of the yen carry trade puts over $1.2 trillion of leveraged global bets at risk.
JUST IN 🚨: Japan’s 20-Year Bond Yield hits 2.947%, the highest level since 1998 📈📈 pic.twitter.com/QVmHTV399w
— Barchart (@Barchart) December 8, 2025
The story here is simple. For three decades, the global system relied on Japan keeping money cheap, stable and endlessly available. That promise has quietly expired. Capital that once supported Western debt markets is returning home, yet the pricing of everything from mortgages to equities still assumes the old order is intact.
As Japan adjusts its policies, the unwinding process is revealing the extent of yen-based liquidity and the levels of synthetic leverage that have built up over many years of low interest rates, all based on the belief that Japan would never return to normal conditions.
The most frightening aspect of this narrative is not the interest bill from the Japanese government, but rather the abrupt repricing of global risk that occurs when the largest liquidity provider changes direction.
The influx of capital returning to Japan significantly alters the discount rate for all global assets. If the fundamental cost of money shifts this rapidly, the ‘everything rally’ story will encounter a harsh reality check.
Read more: Japan Plans 20% Crypto Tax, Reclassifies Digital Assets as Financial Products
When the largest marginal buyer in the world turns into a net seller, the global yields gap does not simply adjust; instead, every asset that is valued based on those yields must reconsider its valuation.
When asked what types of investments could provide a hedge against this downturn, Oliver refers to sectors the market will start rewarding as global yields reprice higher, and mentions precious metals, certain miners and cash flow-heavy sectors.
Vanguard ‘Toying’ with Crypto Despite Internal Concerns
The word “vanguard” is defined as a group of people leading the way in new developments or ideas. But despite making crypto ETFs available on its platform, the investment manager of that name is unlikely to become a cheerleader for this particular asset class any time soon.
When a firm announces the availability of a new product on its platform, the announcement is usually accompanied by a press release liberally sprinkled with words such as ‘proud’ and ‘excited’. References to furry, soft-bodied dolls with sharp teeth, large eyes and pointy ears are usually absent.
So when Vanguard’s global head of quantitative equity told Bloomberg’s ETFs in Depth conference in New York that it was difficult to think about Bitcoin as ‘anything more than a digital Labubu’, it was taken as an indication that its previous unease has yet to fade.
JUST IN: Bloomberg News says Vanguard is considering offering its clients #Bitcoin and crypto products.
“It’s hard to ignore the astounding success” pic.twitter.com/eenSxGs286
— Bitcoin Magazine (@BitcoinMagazine) October 1, 2025
John Ameriks qualified this statement somewhat by adding that the cryptocurrency could have value in specific circumstances, such as high fiat currency inflation or political instability. But he also observed that it lacked the key qualities the firm looks for in a long-term investment – namely income, compounding and cash flow characteristics.
These comments should come as little surprise to any seasoned market observer. Even as its biggest rivals embraced crypto, Vanguard held out on the basis that the price swings were incompatible with responsible portfolio construction.
So this move will doubtless be seen as another victory for decentralised finance, although Vanguard can perhaps take a moral victory from the fact that it is merely allowing its clients to access products issued by its rivals, rather than introducing proprietary funds.
How long this lasts remains to be seen, though – there will be those at Vanguard who have noted the success of BlackRock’s iShares Bitcoin Trust and will be asking whether it is time to fully get on board with crypto.
Perhaps It Is Time to Look at UK Equities Again
If you have been following this column since it started earlier this year, you will have noticed our coverage of various initiatives to boost UK equity investment.
Both the UK government and the financial regulator have put forward various proposals to encourage more people to invest in their domestic stock market. These have ranged from the imposition of a temporary or permanent reduction in the stamp duty (tax) paid on transactions in shares of newly listed UK companies and introducing a minimum UK shareholding in tax-free individual savings accounts, to the FCA’s move to ease the reporting burden on UK-regulated firms.
But could the answer lie in simply recognising the value offered by UK equities? The strength of the FTSE 100 this year has raised concerns over concentration, similar to those voiced on the other side of the Atlantic, but some analysts believe this has overshadowed a strong cohort of firms trading at favourable valuations.
For example, Jeremy Smith, portfolio manager for the CT UK equity income fund at Columbia Threadneedle Investments, acknowledges that the index at the top level looks elevated but suggests valuations are low.
UK stocks have always traded at a discount to their counterparts on the S&P, on account of the latter being seen as more of a growth index. However, the relative gap in valuations is currently higher than it has been at any point since the 1980s.
Almost every FTSE leader surveyed by Deutsche Numis in September believed the UK was an attractive market for launching an IPO or raising capital, and that its appeal had increased significantly over the previous 12 months.
One of the key findings of a recent Capital.com survey was that potential investors felt they had the time to educate themselves about trading, which is an indication of the possible benefits of creating a more informed investor base.
Perhaps this process should start by making these individuals more aware of the potential value of the companies they could invest in, and not assume UK stocks offer less value. As the saying goes, ‘assume makes an ass of you and me’.
Will the World Feel the Effects of Seismic Events in Japan?
Precious metals analyst Matt Oliver posted an interesting thread on LinkedIn recently in which he suggested that Japan has just triggered a massive shift in global finance that few market observers seem to be talking about.
His thesis is that since Japan’s 10-year yield hit its highest level since 2008, it is paying an additional $27 billion in interest every year, and that the unwinding of the yen carry trade puts over $1.2 trillion of leveraged global bets at risk.
JUST IN 🚨: Japan’s 20-Year Bond Yield hits 2.947%, the highest level since 1998 📈📈 pic.twitter.com/QVmHTV399w
— Barchart (@Barchart) December 8, 2025
The story here is simple. For three decades, the global system relied on Japan keeping money cheap, stable and endlessly available. That promise has quietly expired. Capital that once supported Western debt markets is returning home, yet the pricing of everything from mortgages to equities still assumes the old order is intact.
As Japan adjusts its policies, the unwinding process is revealing the extent of yen-based liquidity and the levels of synthetic leverage that have built up over many years of low interest rates, all based on the belief that Japan would never return to normal conditions.
The most frightening aspect of this narrative is not the interest bill from the Japanese government, but rather the abrupt repricing of global risk that occurs when the largest liquidity provider changes direction.
The influx of capital returning to Japan significantly alters the discount rate for all global assets. If the fundamental cost of money shifts this rapidly, the ‘everything rally’ story will encounter a harsh reality check.
Read more: Japan Plans 20% Crypto Tax, Reclassifies Digital Assets as Financial Products
When the largest marginal buyer in the world turns into a net seller, the global yields gap does not simply adjust; instead, every asset that is valued based on those yields must reconsider its valuation.
When asked what types of investments could provide a hedge against this downturn, Oliver refers to sectors the market will start rewarding as global yields reprice higher, and mentions precious metals, certain miners and cash flow-heavy sectors.
Vanguard ‘Toying’ with Crypto Despite Internal Concerns
The word “vanguard” is defined as a group of people leading the way in new developments or ideas. But despite making crypto ETFs available on its platform, the investment manager of that name is unlikely to become a cheerleader for this particular asset class any time soon.
When a firm announces the availability of a new product on its platform, the announcement is usually accompanied by a press release liberally sprinkled with words such as ‘proud’ and ‘excited’. References to furry, soft-bodied dolls with sharp teeth, large eyes and pointy ears are usually absent.
So when Vanguard’s global head of quantitative equity told Bloomberg’s ETFs in Depth conference in New York that it was difficult to think about Bitcoin as ‘anything more than a digital Labubu’, it was taken as an indication that its previous unease has yet to fade.
JUST IN: Bloomberg News says Vanguard is considering offering its clients #Bitcoin and crypto products.
“It’s hard to ignore the astounding success” pic.twitter.com/eenSxGs286
— Bitcoin Magazine (@BitcoinMagazine) October 1, 2025
John Ameriks qualified this statement somewhat by adding that the cryptocurrency could have value in specific circumstances, such as high fiat currency inflation or political instability. But he also observed that it lacked the key qualities the firm looks for in a long-term investment – namely income, compounding and cash flow characteristics.
These comments should come as little surprise to any seasoned market observer. Even as its biggest rivals embraced crypto, Vanguard held out on the basis that the price swings were incompatible with responsible portfolio construction.
So this move will doubtless be seen as another victory for decentralised finance, although Vanguard can perhaps take a moral victory from the fact that it is merely allowing its clients to access products issued by its rivals, rather than introducing proprietary funds.
How long this lasts remains to be seen, though – there will be those at Vanguard who have noted the success of BlackRock’s iShares Bitcoin Trust and will be asking whether it is time to fully get on board with crypto.
