UK investors still show home bias

Nearly half of UK adults believe the UK stock market will rise this year and a quarter think it will outperform other global stock markets in the next decade, according to research by Franklin Templeton.

The figures also suggest UK investors take a longer-term view than investors in other countries and evaluate the success of their investments after 4.3 years on average.

The research seems to confirm the ‘home bias’ theory, which states that investors are more likely to put confidence in companies based in their home country. The trend seems strong in the UK even though investors are well aware of the opportunities available abroad. Nearly 90% of UK investors think the best equity investment opportunities are to be found globally, but only 28% intend to invest outside the UK this year.

Paul Spencer, fund manager of the Rensburg UK Mid Cap Growth Trust, said this result is “not entirely surprising, given that UK adults recognise listed UK companies have good growth opportunities through exposure to global markets”.

He added: “Looking ahead, I’m not expecting a Phoenix-type recovery in the UK, but I’m finding quality opportunities at attractive valuations that should perform very well if our economy rebounds more quickly than expected.”

©2011 funds europe

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