Global equity portfolios have, in recent years, become very heavily weighted towards US equities. This is mainly down to the performance of US technology shares, but also driven by strength of the US dollar. During that period, US-based investors may not have been very focused on their overseas holdings.
With the US election approaching and a second Trump presidency likely to produce surprises, having a well-balanced portfolio may seem more important.
From Wall Street looking out, which markets seem good value and with modest political risk? Japan perhaps, but within Europe the UK may now seem more predictable than many other European countries, with France taking a sudden drop down the list.
The UK equity market has been out of favour for some years and overseas investors have had few reasons to participate. Given problems in other developed markets, UK equities might attract more interest just by appearing stable and reasonable value.
Those conditions seem in place now.
Simon Edelsen was a global equity fund manager for 40 years
