In this episode, Mark Insley sits down with Samuel Hallett to peel back the layers of the UK Equity market—a sector often described as the most international in the world. As we navigate the investment landscape of 2026, Mark and Samuel discuss why the UK remains a unique "value" play. They explore the critical distinctions between the global giants of the FTSE 100 and the domestic pulse of the FTSE 250, explaining why a nuanced understanding of currency and sector exposure is essential for any modern portfolio.Understanding the Basics: The UK’s International DNAMark and Samuel begin by defining the unique composition of the UK market. Unlike many domestic indices, the UK is heavily influenced by global forces, with roughly 60% of revenues denominated in US Dollars.Key Concepts Explored:The Dollar Revenue Hedge: The duo explains the "Inverse Sterling" effect. When the British Pound weakens, USD-denominated earnings from mining and oil extraction giants look much larger in Sterling terms, often boosting the FTSE 100 during times of domestic uncertainty.Barometers of the Economy: While the FTSE 100 looks outward, the FTSE 250 (the next 250 largest companies) serves as the true indicator of the UK's internal health.The Retail Signal: Why Next’s earnings reports are treated as the "Gold Standard" for understanding the health and habits of the British consumer.The Case for Active Management in 2026A major theme of this discussion is why active oversight is necessary to navigate the current "value" landscape of UK stocks.1. The Small-Cap Opportunity (e.g., ASOS)Active managers can find significant "alpha" in the small-cap space. Because these companies receive less analyst coverage, diligent fund managers can spot growth opportunities—like ASOS—before they are fully priced in by the broader market.2. Fidelity Special Situations FundThe hosts highlight this fund as one to watch for those looking to capitalize on "special situations" and undervalued recovery plays, though they stress that timing remains the critical factor for success.3. Investment Trusts & The "Double Discount"Sam provides a compelling look at Investment Trusts within the FTSE 250. With many listed funds currently trading at a 10% discount to their Net Asset Value (NAV), there is a unique opportunity for buy-and-hold investors to enter at an attractive valuation.The Macro Backdrop: Commodities & CurrenciesThe UK market is currently shaped by two massive tailwinds:The Commodity Super-Cycle: The rise in the FTSE 100 has been largely underpinned by skyrocketing commodity prices since late 2021, benefiting the UK’s heavy concentration in natural resources.The Post-Brexit Paradox: Mark reflects on how the FTSE 100 actually rose following the Brexit vote—a perfect example of how dollar-denominated global earnings can outweigh domestic political shocks.Key Takeaways for Financial AdvisorsMark and Samuel conclude with actionable advice for those managing client capital:Asset Allocation: The Cape Berkshire portfolios currently maintain a 15–20% allocation to UK equities in higher-risk profiles, viewing the sector as "rather good" from a value standpoint.Don't Ignore the "Mid-Cap": Companies like AJ Bell and Carnival offer a different risk-return profile than the "Mega-Caps," providing a necessary balance to a UK-centric portfolio.Buy-and-Hold Strategy: For the long-term investor, the current valuation gap in UK equities represents a solid entry point compared to more expensive global peers.Featured Companies & Funds Mentioned:FTSE 100: Global Mining & Oil GiantsFTSE 250: AJ Bell, CarnivalSmall-Cap: ASOSRetail Indicator: NextActive Fund: Fidelity Special Situations FundConnect With the ShowVisit our Website: https://www.capeberkshire.co.uk/#UKEquities #MarkInley #SamuelHlet #Investing2026 #FTSE100 #FTSE250 #ActiveManagement #ValueInvesting #Fidelity #InvestmentTrusts #CapeBerkshire

(Recorded 27 Jan 2026) Join Mark Insley and Samuel Hallett for Episode 3 of Capital and Context as they discuss the Fixed Income Market, and the outlook for the sector in 2026.

(Recorded 27 Jan 2026) Join Mark Insley and Samuel Hallett for Episode 2 of Capital and Context as they discuss the US equity market, the world's largest, and the investment strategy for 2026.

What We Cover:

Market Snapshot: The US market is complex, impacted by tariffs, politics, and the dominance of the "Magnificent 7"

Valuation Check: Is the S&P 500 expensive? They argue that while it looks costly on short-term earnings, it looks "okay" when factoring in long-term growth and AI spending.

Small-Cap Strategy: Why the team uses passive funds for US large-cap but active management for small-cap (T. Rowe Price US Smaller Companies), seeking quality companies that generate positive earnings.

2026 Outlook: The year looks "a good a decent year" due to tax changes (leading to consumer refunds) and massive capital spend on AI.

Recession Watch: The "canary in the coal mine" for a potential recession is the private credit market.

Currency Hedging: A discussion on why the portfolio is 20% dollar-hedged, a different approach from most peers.

Tune in for an insightful look at portfolio construction and asset allocation in the crucial US market.