Capital appreciation has been held back in recent years by a de-rating in UK equities, although the UK's strong dividend culture has provided some relief to investors.
Interestingly, another positive market dynamic has been gaining importance: share buybacks. The recent prevalence of share buybacks should not really be surprising, given market conditions have been just right. Many UK companies have strong balance sheets, with excess capital to return, and valuations look attractive to do so. The pandemic has also likely played a part – rapidly changing conditions reminding management teams of the flexibility buybacks can bring over returning cash via dividends. Oakley Capital Investments launches £20m share buyback as trust ditches dividends ...
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