FTSE 100: Schroders Upgrades UK Equities Outlook on Energy Exposure, Value Appeal

Schroders has upgraded its view on UK equities to positive, citing the FTSE 100’s cyclical tilt and its relatively high exposure to sectors that stand to benefit from an extended period of elevated energy prices.

In its April 2026 multi-asset investment note, the London-based asset manager said the UK market “provides cyclical and value exposure through sectors such as energy, materials and financials,” adding that “prolonged elevated oil prices support energy sector earnings.”

The upgrade forms part of a broader strategy by Schroders to diversify equity risk amid ongoing geopolitical disruption in the Middle East.

WELCOME BONUS - Free Share Bundle When You Invest £50! Open a UK Investment Account: Shares, ISAs, Managed Portfolio Invest in 15,000+ shares and ETFs. Open an account now, invest at least £50, and you’ll get a free share bundle worth between £40 and £200. T&Cs apply. IG

5.0

View Offers

Empfohlener Broker Multi Asset Platform

Social-Trading-Pionier mit Aktien, ETFs, Krypto und CFDs, Copy Trading inklusive. eToro

5.0

Weitere Informationen 50% of retail investor accounts lose money when trading CFDs with this provider.

The firm said it moved to “add to UK and Canadian equities given their higher exposure to the energy sector,” while maintaining its overall overweight stance on global equities.

Schroders acknowledged that the Middle East conflict has created a more complex investment environment than initially anticipated.

“The disruption to energy supplies is likely to be more persistent than was originally thought when the conflict in the Middle East began,” the note said, while adding that “corporate earnings have proved to be resilient.”

Despite the cautious macro backdrop, Schroders noted that equity valuations have improved modestly, as prices have lagged earnings growth, and expects further gains driven by earnings rather than multiple expansion.

The firm continues to favor US equities and technology for their earnings momentum but views the UK as an effective hedge within a diversified equity allocation, particularly given the current energy market environment.