Capital is flowing out of the US, fund managers say, and some experts say many investors are rebalancing towards their home country instead. But according to Dan Kemp, CEO of Portfolio Thinking, the money moving out the US isn’t flowing into the UK yet.
“There is evidence that capital is moving away from the US, but it isn’t flowing into the UK. In fact, some prominent investment managers are still reducing their ‘home bias’ towards UK assets,” he told Investment International.
“The UK was one of the best-performing major equity markets in 2025. UK equity funds still saw outflows. This reminds us that structural allocation decisions built over years don’t reverse overnight just because the narrative has changed.”
He said that while some technology-focused companies in the US remain expensive, the recent concerns about the sustainability of software business models in an age of AI has “led to sharply lower prices and an improved opportunity for investors to acquire attractively valued companies in that industry”.
However, he did say the UK remains one of the most attractive global equity markets and it will become more important.
“The UK remains one of the most attractive global equity markets. While the lack of technology exposure in the index has acted as a drag on returns over the last few years, it can now be seen as an important source of diversification,” he said.
