British savers have become more nervous about investing overseas in their Isas, according to wealth manager Nutmeg.
A survey of 1,000 UK investors, conducted in January by Opinium on behalf of Nutmeg, showed an increasing home bias, with 66 per cent of respondents planning to invest in UK markets within their stocks and shares Isas.
The survey also revealed that investor confidence was at a low, with a third (31 per cent) of UK investors stating they were not feeling confident about the prospect of positive investment returns this year.
This feeling was not limited to new investors; some two-fifths (38 per cent) of seasoned investors with more than 10 years’ investment experience said they felt unsure about financial markets in 2025.
According to James McManus, chief investment officer at Nutmeg, which is owned by JP Morgan, the increasing nervousness came amid heightened global uncertainty.
He said: “It can be difficult to filter out the noise and know where to invest.
“For UK investors this Isa season, there’s plenty of factors weighing on their mind: a new administration in the US, changing geopolitical risk and economic uncertainty at home.
“The truth is, to greater and lesser extents, all of these will impact how markets perform this year, the level of volatility we see, and the returns investments will deliver.”
For UK investors this Isa season, there’s plenty of factors weighing on their mind
Tim Morris, IFA with Russell & Co, told FT Adviser: “Historically, that’s how most people invested.
“They would stick to companies they know well, such as household brand names.”
However, he said advised investors have understood the need for global diversification and the virtues of long-term investing.
This has been compounded by the rise of passive investing.
Morris explained: “I would say the trend [to domestic bias] is decreasing, especially with the growing trend of global passive funds that will have a bias towards the US and therefore tech companies.”
This comes as advisers and discretionary fund managers have asked whether it is now time to back UK equities again following falls in the US stock markets.
As reported by FT Adviser this week (March 11), performance data shows the UK’s FTSE All-Share index has outperformed the US S&P 500 stock index by about 10 per cent since Christmas 2024.
According to the article, some advisers and DFMs have speculated that the market could be nearing the end of a 15-year period of US dominance, which has led to America making up around 75 per cent of all global equity market capitalisation.
Tinuke Akinbulumo is an intern with FT Adviser