Nearly two-thirds of UK Independent financial advisers (IFAs) are encouraging clients to maintain or increase their US equity exposure, despite volatility driven by the Trump administration’s tariff policy, according to asset manager Franklin Templeton’s survey.
While 50% of IFAs are recommending clients hold their US positions, 14% are actively increasing them—signalling enduring faith in the resilience and long-term growth of the US market.
45% of IFAs are allocating between 10% and 25% of client portfolios to US equities, according to the findings. 36% are going further, committing more than a quarter of portfolios to the US, despite geopolitical tensions and shifting trade dynamics.
The so-called ‘Liberation Day’ tariffs have prompted 60% of IFAs to rethink their asset allocation strategies. In response, advisers are diversifying through active management (16%), alternatives (15%) and defensive holdings (10%).
According to the findings, 40% of IFAs say the tariffs have not altered their investment approach, “reaffirming the view of investing for the long-term and looking beyond the volatility”.
UK wealth managers and IFAs see rising interest in leveraged exposure
Half of IFAs expect the US equity rally to expand beyond the Magnificent Seven tech stocks, with small- and mid-cap stocks seen as likely beneficiaries. However, 39% remain sceptical, believing mega-caps will continue to lead.
When broken down by market cap, 53% of advisers favour mid-cap US equities over the next 12 months, while small- and large-caps each garnered support from 24%. IFAs are also keeping an eye on the Federal Reserve, with 44% saying rate moves could boost appetite for small-cap and cyclical stocks.
Nearly seven in ten IFAs are opting for active strategies in the year ahead. As for style, advisers are split: 46% see opportunities in growth stocks, while 44% lean toward value.
Harry Reeves, head of UK wholesale at Franklin Templeton, commented: “As we navigate the complexities of the current market landscape, uncertainty is a prevailing theme. Despite this, IFAs are adopting a more optimistic outlook, suggesting that not all factors will significantly impact US equity market volatility. Amidst this uncertainty, growth and value strategies can offer compelling opportunities, providing a potential sweet spot for investors seeking to balance risk and reward.
Following the addition of the Putnam US Large Cap Value Fund and Putnam US Research Fund to our UK range earlier this year, we believe the case for US equities remains strong as investors seek diversified exposure to high-growth sectors and companies. From a UK investor standpoint, our message to clients is clear: stay invested, stay diversified, and don’t lose sight of the long-term growth potential that the US market continues to provide.”
