Equities Increasingly Favored By UK Expats
Tuesday, June 17, 2014
A survey has found that British expats are becoming more positive about equity markets, and are increasingly willing to invest in stocks and shares.
Freshminds conducted a survey involving 1,039 Britons living in popular
expat destinations, on behalf of Lloyds Bank Private Banking. On average, respondents said that they held 19 percent of their
portfolios in equities, up from 17.5 percent a year previously.
Also, the percentage of their portfolios in bonds decreased – down
from 4.2 percent to 3.6 percent in the case of corporate bonds, and
from 2.3 per cent to 1.8 percent for government bonds.
Forty-five percent of respondents said that they actively invest in
stocks and shares and felt that their portfolio was in a better
position than it was in 2012. Also, 34 percent described their
portfolio as well-diversified, against 22 percent who said it was not.
The most optimistic respondents were in the UAE (43 percent having a
positive outlook) and the USA (37 percent).
Regarding UK investments, over half of those surveyed indicated that
a proportion of their investments are in the UK. Twenty-four percent
hold the majority of their portfolio in the UK, and just under 10
percent have between 90 and 100 percent of their investments in the UK. Of those
who had chosen to invest their assets in the UK, 74 percent said they
had maintained the size of their portfolio, while 20 percent had reduced the size of it, and 16 percent had chosen to increase it.
According to Lloyds, the trend towards UK equities is consistent with
its Investor Sentiment Index, which measures each month the number of investors
who hold a positive view, against those who hold a negative view,
about the outlook for each type of investment over the next six months.
Over the past year, sentiment
has risen by 27 percentage points, with 44 percent expressing optimism. However, sentiment concerning
emerging market equities remains negative on balance, at -12 percent,
despite having risen by 34 percentage points.
Richard Musty, who is Lloyd's International Private Bank Director,
said that the FTSE had performed strongly over the past year, and that
this was why there was a strong attraction in investing in the UK. He
added that there is little sign of equity inflows abating, and that "expats
have clearly seen the opportunities offered in stock markets in the UK
However, he also advised investors to do their research, and to make
sure they are familiar with market movements, and that any investment
plan is part of a well-diversified portfolio.