Since 2015, UK retail investors have injected £50 billion into global equity funds, simultaneously withdrawing substantial amounts from funds exclusively focused on the UK. This trend has exacerbated the exodus of institutional capital from the London stock market.
The data, sourced from funds network Calastone, underscores investors' discontent with the comparatively lacklustre performance of UK stocks. Instead, they are entrusting global managers to navigate towards more promising growth sectors, such as large-cap technology stocks in the US. While not exhaustive, Calastone's figures are regarded as a valuable snapshot of investment fund movement.
Since around mid-2021, this trend has rapidly intensified, particularly to the detriment of region-specific funds. Global funds have experienced an influx of £19 billion, while investors have withdrawn a net total of £21 billion from regional funds, including a substantial £16 billion from UK-focused funds.
Over the period from 2015, regional funds have only seen an addition of £900 million. Experts in the industry also highlight that, numerous global funds while providing enhanced diversification, are heavily tilted towards the US.
The US economy has expanded at roughly twice the pace of the UK's economy since 2008, partly due to technology giants like Alphabet and Microsoft.