Where to invest your money in the UK and overseas | Personal Finance | Finance

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Where to invest money: Your best option is both in the UK and overseas

You need to spread your risk across global markets such as Europe, the US, Asia and emerging markets, as well as doing your bit on the home front.

It is a question of balance: so how much should you invest in the UK, and how much elsewhere?

FOREIGN AFFAIRS

Even those who think British is best must concede that there are times when foreign stock markets will perform better.

That has certainly been the case over the last year, which saw the UK All Companies index grow a healthy 14.6 per cent, according to TrustNet.com.

However, other global markets have grown at a faster pace, with North America up 17.6 per cent, Europe 24.7 per cent and China almost 30 per cent.


When one region underperforms, another may compensate by doing far better

Patrick Connolly, Chase de Vere certified financial planner


There will be some years when the UK sets the pace, and others when it is an also-ran, which is why you need to avoid something called “home market bias”.

Mark Whitehead, portfolio manager at Martin Currie, says UK stocks have lagged behind global equities, not because of Brexit or slower economic growth, but because of a hidden flew in our market.

The benchmark FTSE 100 is over exposed to the volatile oil and gas sector through oil majors such as BP and Royal Dutch Shell, and has struggled with the price of crude plunging to $50 a barrel.

“At the same time, UK investors have missed out on the explosive growth in technology companies such as Apple, Facebook, Samsung and Chinese internet giant Alibaba,” Whitehead says.

A home bias is perfectly understandable but can be costly over the long term, he adds: “Investing globally allows you to access some of the best companies in the world, regardless of sector or location.”

GO GLOBAL

The message may be getting through, as latest figures show British investors pulling money out of the UK and investing elsewhere.

An average of £322 million every month has been pulled out of UK equity funds over the last year, while £737 million was pumped into global funds in July, and another £350 million into Europe, according to figures from the Investment Association.

Jason Hollands, managing director of independent financial advisers Tilney, says this nervousness is understandable: “Private investors might be shunning the UK given Brexit uncertainties, the slim…

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