However, opinion is sharply divided among advisers with a further quarter (24%) currently viewing UK equities as the most overvalued asset class.

Those who were positive about the asset class focused on economic fundamentals, exposure of UK companies to global markets and the potential for an improving situation as Brexit negotiations progress. In contrast, those who expressed caution were concerned about recent Sterling falls and the potential for a market correction in the light of ongoing Brexit uncertainty.

The Aegon research, which looked at adviser’s views on the most attractive and most overvalued asset classes, found that beyond UK equities, emerging markets also proved popular with advisers. Some 22% believe that they will generate the ‘best return’ over the medium to long term spurred by low valuations relative to developed markets and a belief that growth potential will be strong in response to global demand.

Meanwhile, the Eurozone has been buoyed by the strongest economic growth seen in the bloc since the debt crisis five years ago, stability following recent elections, and improved earnings. Positive sentiment has seen advisers signalling confidence in European equities, with one in five (20%) believing that the asset class will generate the ‘best return’ for their clients over a three to five year investment period compared with just 6% four months earlier. Just 2% believe the asset class is the most overvalued.

The asset class considered to be the second most overvalued – after UK equities – was gilts, highlighted by one fifth (20%) of the advisers surveyed. Advisers cited very high valuations, which have been buoyed by prolonged period of quantitative easing. In addition, 18% of advisers think that US equities are the most over-valued asset class. However, this was a vast improvement from nearly two fifths (38%) four months ago.

Nick Dixon, investment director at Aegon UK, said: “There’s a clear split among advisers on the medium-term prospects for UK equities. For our part, we remain overweight to this asset class in our Core and Select Portfolios, which are managed in conjunction with Morningstar.

“While many developed asset classes look overvalued at present, UK equities feel better value on a relative basis. Market fundamentals remain broadly unchanged following the vote to leave the EU, despite speculative activity and the recent fall in Sterling. For those that can invest in the medium to long-term the UK market remains attractive, as any short-term uncertainty caused by the nature of future trade deals with the European Union will only partially impact large cap companies, who are more likely to trade internationally.”

• Research was conducted with Aegon UK’s Adviser Panel with responses from 49 financial advisers. Fieldwork was undertaken post general election in June 2017. This was paired with research conducted on Aegon UK’s Adviser Panel with responses from 102 IFAs. Fieldwork was undertaken pre general election in March 2017.