Four Reasons to Watch UK Equities



The following content is sponsored by BlackRock.

Over the past several years, UK equities have traded at a relative discount compared to other developed markets. This was largely due to ongoing Brexit negotiations, where uncertainty around trade deals and other legislation created significant headwinds.

Fast forward to today, and much of the uncertainty has passed. Does this mean it’s time to invest in the UK?

Looking Ahead

This infographic from BlackRock covers four reasons for why investors should consider an allocation to UK equities.

UK Equities infographic

So, why should investors consider an allocation to UK equities?

#1: The UK Market Is Not the UK Economy

The UK equity market is represented by many leading multinational companies from a variety of sectors.

For example, consider the FTSE All-Share Index, which contains over 600 companies listed on the London Stock Exchange. As of March 31, 2021, 72.5% of these companies’ total revenue was derived from outside of the UK.

A large share of overseas revenue provides investors with exposure to a range of global themes, where outcomes are not dictated by the UK economy itself.

#2: Business Activity is Ramping Up

The confirmation of a Brexit trade deal has provided UK companies with clarity around the rules of engagement, as well as the confidence to look ahead.

As a result, the UK has been ranked as the most attractive place in Europe for future investment.

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