Japan and US equities win over UK investors as Europe fades

LaToya Harding
·2-min read
More Brits are investing in US and Japan stock markets, according to survey. Photo: Yuriko Nakao/Reuters
More Brits are investing in US and Japan stock markets, according to survey. Photo: Yuriko Nakao/Reuters

UK investors are looking beyond Europe for stronger returns on their investments as market optimism begins to bounce back.

According to the latest research from Charles Schwab UK, Japan is now the most attractive market for UK investors (68%) after being faced with sluggish recoveries in UK and European markets.

China also saw the biggest jump in attractiveness, up 15% since the research was conducted in May last year.

The US was likewise seen as a good option for investment to UK traders (67%) following November’s election results. Almost one in five (18%) investors said they had invested more in the US over the last three months.

In the last six months, the Nikkei 225 (^N225) in Japan has risen 26.69%. In comparison, the pan-European STOXX 600 (^STOXX) has increased 18.1%, while the S&P 500 (^GSPC) is up 19.16% during the same period.

The data showed that investment in real estate and hospitality has also surged since the last poll, highlighting that many believe these sectors will bounce back from the havoc caused by the pandemic.

The tourism and hospitality industry has also become more popular, as 40% of investors viewed the sector as attractive, representing a five percentage-point increase from last year.

However, not every sector that suffered during the pandemic has seen a rise in popularity. Only 35% of investors consider high street retail as an investment opportunity, falling from 37% in May 2020.

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The research also showed that more than half of investors (53%) said they had a positive outlook on global markets over the next 18 months - an eight percentage-point increase.

Charles Schwab UK added that nearly half (47%) of investors have seen an increase in the value of their investments in the last three months, an improvement from just 29% in the previous poll.

However, some 70% were still concerned about future lockdowns and outbreaks.

Richard Flynn, UK managing director at Charles Schwab, said: “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.”

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