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Who owns the stock markets? Planet Earth — 7IM Short Thoughts

1 min watch

Ben Kumar, Head of Equity Strategy07 Dec 2023

Diversification in portfolios is something we talk about all the time. But it’s more than bonds vs equities, alternatives vs cash.

The Office for National Statistics released their latest Ownership of UK quoted shares report, and it makes for some compelling reading.

Ben Kumar interprets the stats for an interesting take on looking further afield when it comes to portfolio diversification.

Transcript

Three hundred fifty thousand people follow the Office for National Statistics on Twitter. If you're not one of them, you might have missed the UK equity market ownership report released this week. I'll summarise briefly. Foreign ownership of the UK equity market is at an all-time high, and most places I see headlines about this, that's presented as a bad thing. I think there are two problems with that take, though.

Number one is that foreign investors being interested in investing in your country is a great thing. Shows you're a brilliant place to do business and attract capital. And number two, this is not a UK-specific problem. It's something that's been happening over the last few decades across the world. It's become easier and easier to invest abroad. The US in this chart, is seeing exactly the same trend in the orange at the top of the chart.

And what it means is that investors have been able to more and more and more, diversify their portfolios to embrace the fact more and more easily that investment opportunities aren't just on your doorstep.