"Being bullish on UK equities will yield long-term benefits for investors"

Finsbury Growth and Income Trust portfolio manager Nick Train lists three UK stocks that he would invest in

Our investment strategy is predicated on two ideas. First of all, it helps to have a positive outlook when investing in stocks. I'll state that we are optimistic about world stocks in the upcoming decades. The outlook has never been better, one could say. Businesses and consumers have benefited from technological advancement, and the emergence of AI is probably going to quicken this process. We anticipate that sharply declining interest rates could be a welcome surprise in 2026 - 2027 because productivity gains brought about by technology typically reduce inflation and, consequently, interest rates.

Second, it's critical to overcome the pessimism that has plagued the UK market if you invest in UK equities, as we do. Numerous top-tier UK companies are offering to participate in the most lucrative investment themes of the twenty-first century. The UK firms that make up our portfolios have the potential to provide years of globally competitive returns if they develop as we anticipate.

Three stocks from the UK to think about.

We have been longtime supporters of the company, so I am sad that my first choice has turned into such a divisive investment. Owning stock in Diageo (LSE: DGE), the leading spirits company in the world, could be very profitable, though, if our strategic outlook is accurate. The claim that consumers are "drinking less, but better" has never been contested in the midst of the controversy surrounding consumers' changing drinking habits.

The purveyance of premium spirits has been the driving force behind Diageos' business for several decades, and we anticipate that trend to continue. More importantly, the risk of technological obsolescence is a consequence of technological change. Investing a portion of a portfolio in brands or franchises that you can reasonably expect to remain relevant for decades to come makes a lot of sense in these circumstances, where some tech wealth could vanish with disarming speed. Without a doubt, Diageo's top brands provide that durability.

A significant international business, RELX (LSE: REL) is a reliable supplier of data and analytics tools to important international sectors. According to its CEO, Risk, RELX's largest division, is now valued at over 50% of the company's total value, up from just 2% twenty years ago. However, the Risk division's current growth rate and prospects seem better than ever in spite of that previous performance. According to him and us, the development of AI offers businesses like RELX the opportunity to use their confidential and proprietary data to generate new insights for their clients.

Sometimes, investors object to RELX's ostensibly "high" valuation. However, if the protracted Nasdaq bull market has taught us anything, it is that digital firms with essential services and long-term growth potential should be valued highly. Even though RELX's forward price-to-earnings ratio in the mid-20s is higher than that of the typical UK business, it is still quite close to the average.

Opportunities in the unloved UK market can be seen in Clarkson (LSE: CKN). This company, which is the largest shipbroker in the world by nautical mile, has a solid plan for investing in technology and its data assets. According to the CEO, his plan is to make Clarkson "the Bloomberg of global shipbroking." The company's reputation and valuation would significantly improve if it could implement that strategy.