Why the UK Is Reshaping Its Investment Playbook
- US dominance has stretched over the last 15 years, packing roughly 75 % of worldwide equity market cap.
- Brits, feeling the heat of the trade war, find the UK’s index riding above the U.S. S&P 500 by about 10 % since Christmas.
- The home‑bias story is getting a fresh twist: the FTSE looks cheaper, offers 3.4 % dividends, and might be the sweet spot for patient players.
From “Great Britain” to “Great Europe” — where did the lazily‑invested UK investors go?
Over the last three decades, ordinary UK portfolios have trimmed their domestic exposure from roughly 25 % to a lean 5 %—a figure closer to the UK’s true global weight of about 3.5 %.
This move made sense, as markets beyond our borders, especially the U.S., have delivered stronger growth.
Why a home‑bias comeback is now on the cards
Current market dynamics paint a compelling picture:
- U.S. valuations feel ripe for a correction.
- Global markets are more fairly priced—or even “cheap”—and the UK is part of that guild.
- US tech’s rally has inflated the U.S. side of many portfolios; the next decade could see a dramatic shift.
Expert voices on the home‑bias revival
Faisal Sheikh, Managing Director, Monmouth Capital
The 1980s and 1990s were a time of over‑exposure to local stocks.
“Unwinding that and going global was the smart move,” Sheikh recalls. “Now that the U.S. looks stretched, there’s a good opportunity to dollar‑down into the UK, which remains undervalued.
Let’s put some of those gains where they can grow—back home.”
Gabriel McKeown, Head of Macro, Sad Rabbit
“UK portfolios have shrunk dramatically, yet U.S. valuations stay sky‑high.
The FTSE, missing the high‑growth tech giants, could appeal to those chasing stability and value.”
His research indicates that institutional sentiment is currently flat—yet his own global model holds 13.5 % UK exposure, up from last year.
“FTSE companies are on a discount, offering a solid entry point for the lookout for unseen bargains.”
In Bottom Line: A Home‑Bias Reminiscing for Savvy Investors
- The UK’s cheap valuation and steady dividend yield make it a tempting artillery piece.
- U.S. over‑valuation vs. UK under‑valuation could mean a next‑decade trade‑off that screams “time to re‑balance.”
- Think of it as a strategic homecoming: your portfolio’s love of wealth may get a fresh home‑court advantage.
—And that’s your quick take on why giddy Brits might finally decide to fall back in love with the FTSE once more.
