The government hopes that by providing additional tax breaks, the UK ISA will increase the capital available to domestic businesses. But Paras Anand says the main reason for Britons to invest more in the FTSE is their own prosperity.
In the ‘90s, everyone in this country seemed to have most of their investments in UK shares. Articles would appear in the Sunday papers exhorting us all to think more globally. And we listened.
The trend towards passive investing made it much simpler for investors to buy international shares. Trackers that mirror indices such as the MSCI World have just 4% exposure to the UK market. More than 70% of the index is in US stocks.
Back in the ‘90s, defined benefit pensions funds and insurance companies owned around half the UK equity market. Today it is just 3%1.
The surprise recently was perhaps not so much that one of the UK’s best-known wealth managers was reducing UK equity exposure from more than…
