Where in the World Should you Invest?

Which equity market offers ISA investors the best chance of healthy returns? We examine the prospects for developed and emerging markets alike

Nutmeg 10 April, 2014 | 10:00AM

This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, Shaun Port, CIO of Nutmeg outlines is outlook for global stock markets for ISA investors.


The UK economic recovery has surprise many commentators over the past six months, seeing the one of the greatest upgrades to economic forecasts in the world.  We think investors shouldn’t overlook the UK market when building their portfolio, not least because investing in UK stocks involves no currency risk.  We prefer mid-sized companies, which have a greater focus on the domestic market than the FTSE 100.  International buyers of the UK market have become even more important - US investors bought a record $97bn of UK stocks in 2013 – while UK pensions schemes continue to dump stocks.  As a result, investors should be somewhat watchful of the emergence of political risk in the UK as we get closer to the Scottish Independence vote in September and the general election in May 2015, which spook overseas buyers of UK stocks. 


On many measures the US stock markets look expensive compared to history, but we still think investors should have some exposure.  Despite a very strong gain in 2013, we would also hold exposure to a diverse range of smaller companies, to benefit from improving domestic growth.  Arguably the US market is safer than other stocks.  In the majority of the 15 sell-offs we have experienced since 2009 – when the market dropped by 5% or more – US stocks have fallen by less than elsewhere.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

  • holly black headshot thumbnail Barnett is Back

    Editor's Views: After a difficult few years, former Neil Woodford protégé Mark Barnett is returni...

  • Stock of the week post-it Stock of the Week: Coca-Cola

    With 1.9 billion servings of Coke enjoyed every day, our Stock of the Week Coca-Cola needs little...

  • Gold bars lined up 3 Anti-Income Investments

    In a topsy turvy investment world, it might be helpful to ditch the growth vs income mindset and ...

  • Income bold text angle Small-Caps for Income?

    Income-seeking investors shouldn't just stick to big blue-chips. There are plenty of dividend-pay...

  • Stacks of coins income week 3 Income Stock Picks

    VIDEO: Where can investors find reliable dividends to meet their income investing needs? Killik &...

About Author

Nutmeg  is a savings and investment management service for successful professionals

Audience Confirmation

By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement