UK Investors Shift Focus Back to Developed Markets Amidst Valuation Concerns
LONDON – UK investors are recalibrating their portfolios, demonstrating waning confidence in emerging markets and the “Magnificent seven” tech stocks, and increasingly favouring developed economies, according to the latest data. The shift comes as valuation concerns mount and previously optimistic forecasts for regions like China and Japan falter.
investor interest in emerging European markets, China, and Japan saw critically important gains in the second financial quarter but has as experienced a downturn. Belief in China’s performance has dropped from 31 percent to 23 percent,while confidence in Japan fell from 17 percent to 15 percent. European faith also decreased, moving from 23 percent to 20 percent. Despite this,some investors continue to hold emerging market assets,citing growing populations,bolstering labor markets,and lower interest rates as potential benefits.
However, the moast notable change is a dampened outlook on the US tech giants known as the “Magnificent Seven” - including Apple, Alphabet, and Microsoft. Only 41 percent of UK investors now expect these companies to outperform, the lowest figure on record and down from 47 percent last quarter. A mere 13 percent anticipate significant outperformance.
“Retail investors are trimming exposure, not as they doubt the long-term potential of these companies, but because over reliance on a handful of tech giants leaves portfolios in a vulnerable surroundings,” explained Akoner. “It reflects a maturing mindset among retail investors, moving from chasing performance to managing risk more strategically.”
The trend signals a broader move towards prioritizing portfolio diversification and risk management as economic uncertainties persist.