New Capital's Carretero: 'Oversold' UK mid caps could correct following post-Brexit hit

Will review underweight UK position accordingly

Bibiana Carretero, manager of the New Capital Dynamic European Equity fund, believes UK mid caps were oversold following June's Brexit vote and could see a correction during this earnings season as investors focus on company fundamentals.

Carretero, who currently allocates 24.5% to the UK versus the 30% weighting of the fund's MSCI Europe benchmark, said she will review her underweight position based on how companies adapt their earnings outlook and dividends to the surprise referendum result. The manager cut her neutral UK position in the run-up to the referendum by gradually reducing exposure to domestic stocks, which she felt were failing to price in the chance of a Brexit result when compared to their European counterparts. Instead, she had been adding to multi-national UK companies whose revenues and cost structur...