Brexit has had a negative impact on the UK stock market, but we believe this means many stocks are now undervalued.

As a result we are now telling clients UK focused funds represent a very attractive proposition for investors with a longer-term view.

On a 12-month forward price/earnings basis the UK market is currently trading on a multiple of 12.2 times earnings, well below longer-term trend and at a discount to both the US on 16 times earnings and the MSCI Europe excluding UK on 13.1 times where the economic picture has been deteriorating at a faster pace than in the UK.

Many domestically facing stocks are now priced at levels typically seen during recessions.

The reason for this is sentiment driven. Currently UK political uncertainties have resulted in the market being shunned by both many international investors but also UK retail investors, who have collectively been net sellers of UK equity funds in each of the last 20 months.

While nervousness is perhaps understandable given the relentless news flow around Brexit, avoidance of UK equities is to a large degree unwarranted as the UK equity market is very international in nature

The stock market is yielding close to 4.8 per cent, so even if price returns are zero, investors are still getting a decent income return. The make-up of the UK stock market is very varied: many larger and medium-sized companies get a lot of their revenues from overseas, so if the pound falls, it is not all bad news.

For example, the JOHCM UK Dynamic fund, which is managed by Alex Savvides and seeks UK recovery and contrarian stock opportunities within large and mid-cap stocks. Mr Savvides will actively look for companies that have experienced difficulties but where there is management change, as this is often a catalyst for recovery. He will also only invest in dividend paying companies, seeking out total returns from his portfolio.