Investors look beyond Europe for returns as bounce back optimism increases

Investors searching for stronger returns are turning to Far East Asia, according to the latest Investment Forcesresearch from Charles Schwab UK.

 

The research reveals that Japan is now the most attractive market for UK investors, with 68% seeing it as a good option for investment. In the last six months, the Nikkei 225 in Japan has risen 26.69%. In comparison, the pan-European Stoxx 600 has increased 18.1%, while the S&P 500 is up 19.16% during the same period.

 

Global Britain, Global Investment

This shift to investing beyond Europe is borne out across the research. British investors also view China as a significantly more attractive country for investment compared to May 2020 when this research was last undertaken. China has seen the biggest rise in attractiveness, now appealing to 60% of investors, up 15% since May 2020.

The United States has also become a more popular investment location. 67% of British investors consider it to be a more attractive market after November’s presidential election. As a result, nearly one in five (18%) investors said they had invested more in the U.S. over the last three months.

 

Investors are increasingly looking abroad for opportunities as market optimism is starting to bounce back. More than half of UK investors (53%) are optimistic about the outlook for global markets in the next 18 months. This represents an eight percentage-point increase compared to May 2020. In addition, almost half (47%) of investors have seen an increase in the value of their investments in the last three months. Again, this represents an improvement from May 2020 when just 29% had seen a rise in the value of their investments.

 

Richard Flynn, UK Managing Director at Charles Schwab, said: “Faced with sluggish recoveries in UK and European markets, British investors are going global, turning to Japan, China and the US for higher returns. Investors are more likely to look abroad for opportunities as their optimism increases and we’re seeing British investors becoming more bullish as the performance of their portfolios improves. The combination of a strong bounce back in the Far East coupled with confidence in the Biden administration positions these markets as the Big Three outside of the UK for investors.”