Traditionally, UK investors have skewed their portfolios towards locally listed equities because they connect familiarity to low risk. Times have changed, however, and we believe that investors need to broaden their horizons and take a global approach.
Three reasons to go global
- Growth – Powerful demographic trends are leading to faster rates of economic growth overseas
- Diversification – Global investors have nearly four times the number of stocks to choose from and can avoid inherent sector concentration
- Returns – Global equities have outperformed the UK market both on an absolute and risk-adjusted basis over the short and long term
Look beyond borders
It is not just private investors who tend to opt for home bias. A large number of professional investors including financial advisers and wealth managers also focus on the UK, with some allocating more than 40% of their clients’ equity exposure to our home market.
At Sarasin & Partners, we believe that no matter what kind of investor you are, you will achieve superior long-term returns by ignoring geographical borders. We therefore use a truly global investment process, seeking to buy companies with attractive risk/reward characteristics regardless of where they are listed.
For the full deep dive from our team of experts into why UK investors should concentrate on global opportunities, read the full research document.