The UK market is a fantastic contrarian investment for those investors able to take a longer-term approach to their portfolio.

The aggregate forward price-to-earnings multiple of 11x stands out in a world of fully valued stockmarkets, and the dividend yield, which is now in excess of 5%, offers ample compensation for the patient investor.

Within the index there are market leading businesses from around the world, and this truly global earnings stream, where 85% of profits come from outside the UK, offers portfolio diversification and opportunity.

Currently, the Brexit situation is in the doldrums and once some semblance of certainty returns there will be cause for value realisation.

As we have seen with many political events of the past decade, the market abhors uncertainty, and visibility, whatever the outcome, is likely to be sufficient grounding for some kind of market recovery.

Demand for UK companies has been high, with M&A from foreign private equity and corporate investors demonstrating attractiveness to private buyers even if shorter-term stock investors are more cautious.

The single most worrying outcome for stockmarkets would be a Corbyn-led Labour government. Their anti-capitalist ideology, combined with extreme plans for the economy and taxes would drive investment offshore, lead to lower investor appetite and make Brexit-induced uncertainty look pale in comparison.

A key rub with the long-term investment opportunity presented by the FTSE 100 is the effect of a strong move in sterling. Given the high proportion of overseas sales and profits, for every 10% move in the currency we would expect an underlying 7% move in the market, in the opposite direction.

Prior to the (first) Brexit vote, sterling was trading at $1.50 against the US dollar. Should the currency return to that level, the FTSE would fall 13% in response.

Somewhat counterintuitively, a 'strong' Brexit outcome could mean the market is held back, at least in the short term.

Freddie Lait is CIO and founder of Latitude Investment Management

Bull Points

• The UK market is a fantastic contrarian investment opportunity
• One of the cheapest stock markets globally
• Diversified global earnings stream and high cashflows

Bear Points

• Brexit uncertainty persists
• A Corbyn government would drive investors out of the UK
• Sterling strength causes a negative impact to the stock market due to overseas earnings