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Charles Schwab: Investors could return to the UK after the election

There is a ‘growing sense of optimism’ that the UK will prosper post-election


Two-thirds of retail investors (66%) believe the UK will be a more attractive market after the next election, according to new research by Charles Schwab.

It suggested that investors in the UK lack stability until an election takes place, which could be delayed until as far as January next year.

And renewed optimism for the UK is much needed, with funds investing in the region making net losses for the past three consecutive years.

In 2023, UK equity funds were hit with £8bn in outflows as disgruntled investors – foreign and domestic – withdrew their money, while all other equity funds raked in £6.9bn between them.

However, the fact most investors anticipate stronger performance post-election indicates a “growing sense of optimism” for the UK, according to Richard Flynn, managing director at Charles Schwab.

See also: LSEG report: Most active funds are underperforming their benchmarks

He said retail investors believe “market values will improve once the uncertainty around the upcoming elections has been resolved”.

Indeed, nearly nine in ten (88%) investors expect UK equities to either increase or stay the same over the next six months.

In fact, they were more optimistic about the FTSE 100 than any other index, with 42% of those surveyed expecting it to rise over the coming year. This was more bullish than the 34% who thought the same of the US’s S&P 500.

Nevertheless, retail investors in the UK also think the US will benefit after its election in November, with 62% saying it will be a more attractive market once political uncertainty subsides.

Investors are slightly more optimistic about a Democrat win, with 65% anticipating a positive outlook with Biden in the White House versus 62% who think Trump would spur market growth.

This story was written by our sister title Portfolio Adviser

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