Dominic Younger is the fund manager for CT Progressive Income, having joined Columbia Threadneedle in 2013. A member of the UK equities desk for 10 years, he became Fund Manager in January after working alongside the previous manager, Julian Cane, since 2021. Here, he explains why UK equities may offer attractive opportunities for investors seeking income and long-term growth in a diversified portfolio.
For investors looking across global markets, the UK can be easy to overlook. International capital has flowed elsewhere in recent years, while political uncertainty and subdued economic growth have weighed on sentiment. The result is a market where many companies trade on valuations that appear modest relative to their long-term prospects.
That does not mean the UK market is without risk. But for selective investors, it can create a useful starting point. At CT Progressive Income, we focus on identifying individual companies where the market may be underestimating the durability of cash flows, the strength of competitive positions or the potential for improvement over time.
A disciplined approach to value and income
The trust’s objective is to provide shareholders with sustainable income alongside long-term capital growth. We seek to achieve this through careful, bottom-up stock selection, rather than making broad calls on the direction of the economy. In practice, that means looking company by company: assessing balance sheets, cash generation, dividend resilience and valuation.
Our focus is often on companies that are out of favour, misunderstood or undergoing change. These situations can feel uncomfortable, which is why they are sometimes mispriced. When the market struggles to forecast a company’s future with confidence, share prices can disconnect from what we believe the business may be worth over time. Detailed research, valuation discipline and patience are therefore central to the way we invest.
The UK market may be out of favour, but that can create opportunity for disciplined, patient investors.
Finding opportunity beneath the headlines
Examples in the portfolio include businesses where we believe short-term uncertainty has obscured longer-term potential. Rentokil, for instance, is a high-quality pest-control company that has faced temporary challenges. In our view, the market has become too focused on the near-term difficulties, while the underlying fundamentals provide scope for recovery over time.
We have also added positions in companies such as precision engineering firm IMI, Imperial Brands and Standard Chartered. Each investment case is different, but the common thread is valuation discipline: we want to own companies where the current share price does not fully reflect the quality of the business, the strength of its cash flows or the scope for improvement.
This has naturally led us to find opportunities among domestically focused UK companies as well as larger international businesses listed in the UK. We are not investing on the basis of a single economic forecast. Instead, we are looking for companies with the scale, competitive position and management capability to make progress through different market conditions.
We are not making a broad call on the UK economy. We are finding individual companies where the market may be underestimating long-term value.
Why it can work in a portfolio
For investors building a diversified portfolio, the trust can provide exposure to a part of the market that may be underrepresented in global equity allocations. It also offers a combination that many investors value: the potential for income today, alongside the opportunity for capital growth over the long term.
The investment trust structure is also helpful. It allows the trust to take a long-term approach and gives access to revenue reserves that can be used to help smooth dividends over time, although dividends are never guaranteed. This makes income discipline important: we look for companies that can support dividends through cash generation and financial resilience, rather than simply chasing the highest yields.
Today, we believe UK equities remain a fertile hunting ground for active investors. Sentiment may still be cautious, but that is part of the opportunity. By focusing on fundamentals, valuation and long-term ownership, CT UK Progressive Income aims to give investors professionally managed access to UK companies with the potential to deliver both income and capital growth. For those seeking to diversify their portfolio and look beyond the most crowded areas of the market, the trust offers a differentiated way to participate in the long-term opportunity we see in UK equities.
Investment risks
The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested.
Issued by Columbia Threadneedle Management Limited and approved for distribution 19/10/2026.
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