Franklin Templeton's Morton: 'Why I believe equities appear undervalued relative to bonds'

Colin Morton, manager of the Franklin UK Equity Income Fund on how he approaches equity valuations and why he remains unconcerned about inflation.

As investors approach 2018, how would you describe the UK equity market today? Valuations remain elevated, supported by extremely low bond yields and short-term interest rates being close to zero.  In 2016, due to significant overseas earnings, the UK market received a one-off boost following the post-Brexit-vote devaluation of sterling. Progress in 2017 has been harder to come by as focus has switched to what the world's central banks will do next as they move towards the normalisation of monetary policy.  Thus far, the UK economy has proved remarkably resilient despite the challe...