A combination of underperforming stocks, a strong dollar and the 2024 budget has led UK investors to sell-off their holdings in UK assets, states a recent study.
The research, conducted by ETP issuer GraniteShares, found that one in five (20%) of UK retail investors expect to cut their level of investment in UK markets in 2025.
The main reason is the underperformance of UK markets in the last three years, as cited by 61% of respondents. This includes 24% who have already switched their interests to other markets.
The FTSE 100 may have gained 5.72% in 2024, however this was well behind other markets such as the S&P500 and Nasdaq which gained 23.3% and 28.6% respectively.
More than a quarter (26%) of respondents cited the 2024 budget called by the new Labour government as a reason for reducing their UK investments.
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However, despite the pessimistic outlook, almost one in five (19%) of respondents estimate that 50% or more of their portfolios are invested in UK stocks and funds.
“Economic news in the UK has been relatively downbeat over the past six months and last year’s budget has been criticised by businesses,” said Catarina Donat Marques , head of European retail strategy at GraniteShares.
“The issues however go back further than just the last few months, with the UK stock markets underperforming versus the US one. That is recognised by retail traders who are cutting investments in the UK, despite the fact that investors tend to focus most on their home market,” she said.
