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Investors overexposed to UK stocks and shares

Investors overexposed to UK stocks and shares

Category: Investments

Updated: 15/06/2010
First Published: 29/09/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Investors are overexposed to UK equities, according the overwhelming majority of advisers, new research has found.

A survey of advisers found that 47 per cent believe that investors are definitely overexposed to UK stocks and shares, while an additional 42 per cent conceded that was probably the case.

Carried out by Ignis Asset Management, the results may be considered surprising as the FTSE-100 index of leading UK shares has risen by 43 per cent since March.

"In recent months it has become clear that the massive global policy response has got some traction and that, for the foreseeable future, the Armageddon scenario is off the table," Martin Brookes, Director of Portfolio Management at Prudential Portfolio Management Group, told, when asked what had driven the rally.

Despite this, figures released yesterday found that a quarter of potential investors have ruled out putting money into equities.

There is also some scepticism whether the recent gains in the stock market can be maintained, with 91 per cent of advisers of the opinion that the market would finish the year below the level it is at currently.

Mr Brookes said that while the current gains are unlikely to persist at the current pace, investors would not be well served by becoming risk averse.

"Performance cannot continue at the rate it has in recent weeks," he commented. Basically, we've just seen the best six months ever for credit and it is not possible for yields to continue to contract at the same rate."

However, he warned against over caution, saying that the current risk was a reflection of the stock market returning to a normal value range.

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