UK Stock Market Offers Global Investment Opportunities

Only around 27% of the FTSE All Share’s revenues come from the UK. By contrast, the S&P 500 index revenue exposure to the US is a high 62%.  

Dimitar Boyadzhiev 19 February, 2019 | 12:23PM

It’s hard to think of another event in recent memory causing more uncertainty for UK businesses than Brexit. Following the vote in June 2016, the FTSE All Share Index has underperformed the global benchmark MSCI World by 6.3% in annualised terms.

Some argue that that this makes UK companies prime objective for bargain hunters. However, investing in businesses that are reliant on the health of the British economy remains a risky bet.

How Badly Can Brexit Hurt UK Companies?

No one yet knows which path the Brexit process will take. Even if the withdrawal deal is approved, the UK is in for a transition period when the future relationship will have to be negotiated; in effect meaning that uncertainty would continue to weigh on investment decisions, stock valuations and the value of sterling. The alternative scenarios of the UK crashing out of the EU without a deal or that of a second Brexit referendum also do little to mitigate uncertainty.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
iShares UK Equity Index (UK) D Acc169.64 GBP-1.54
SPDR® FTSE UK All Share ETF Acc38.29 GBP-1.22

About Author

Dimitar Boyadzhiev  is a Passive Strategies Research Analyst for Morningstar

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