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Nearly Half Of All UK Investors Have More than 50 Per Cent Of Portfolios In Shares, Bonds

Stephen Little

23 October 2014

Almost half of UK investors have the majority of their portfolios in UK shares and bonds, according to analysis of the domestic bias in UK retail investment by platform provider .

The research showed that 46 per cent of retail investors have over half of their investment portfolio in UK shares and bonds.  A further 12 per cent have between 41 per cent and 50 per cent in these, while one in four (24 per cent) have between 21 per cent and 40 per cent of their portfolio UK bonds and shares.

Rplan warned that investors were increasing risk by concentrating their exposure in this way – a typical “medium-risk” portfolio would only allocate up to 40 per cent in the UK, the firm said.

“Investors should be building balanced portfolios that are consistent with achievement of their investment goals, which implies exposure to a range of different asset classes and geographies. This provides an appropriate degree of volatility and risk relative to their target investment returns,” said Stuart Dyer, Rplan.co.uk’s CIO.

The research revealed that much of the focus on the UK has arisen by accident, with 22 per cent of retail investors saying their portfolios have ended up like this because they had bought newly-listed high-profile companies in the UK, such as Royal Mail.

Just over one in three said it was because they have tended to invest in ISAs that focus on the UK, while 9 per cent said it was because of shares they still have from organisations that have demutualised. A further 9 per cent said it was because of the default fund of their company pension scheme.  

When financial advisors were questioned about their clients’ overexposure to the UK, 17 per cent said it was because of their company pension default fund, and 53 per cent said it is because they feel more confident about investing in UK shares and bonds.