UK equities have lagged US peers since 2013. Yet they often offer higher Dividend yields and lower valuations, prompting commentators to ask whether UK investors should 'buy British' more often.

Key takeaways

  • The FTSE All-Share captures the broad UK market.
  • Many AIC dividend heroes are UK-focused trusts.
  • Home bias can amplify country-specific risk.
  • UK valuations have traded at a discount to global peers.
  • Currency risk is reduced by holding sterling-denominated Assets.

Why buy British?

Lower valuations, higher yields and the absence of FX risk are common arguments.

Why diversify

The UK is c.4% of global market cap - overweighting it adds country risk.

Names UK investors mention

City of London Investment Trust, Finsbury Growth &Amp; Income, JPMorgan UK Equity Income and Lowland Investment Company appear frequently in ISA portfolios. Check the latest factsheets.

What this means for UK investors

A modest UK overweight can be defensible for sterling-spending investors, but treating the UK as the core of a global portfolio adds avoidable risk.

Risks to watch

  • UK political and fiscal shocks.
  • Sector concentration in energy and banks.
  • Sterling moves.
  • Discount widening on UK-focused trusts.