investing beyond Europe

Investor optimism appears to be improving, with investors looking beyond Europe for market recovery opportunities.

The latest Investment Forces research from Charles Schwab UK found that investors seeking better returns are turning their attention to Far East Asia.

According to the research, Japan is now the most attractive equity market for UK investors, with 68% of investors surveyed saying it is a good option for investment.

In the past six months, the Nikkei 225 index in Japan has risen by 22.19%, compared to 18.92% for the pan-European Stoxx 600 and 17.91% for the US S&P 500 index.

The research confirmed a shift to investing beyond Europe, with China viewed by investors as a significantly more attractive country for investment compared to May last year, when the research was last conducted.

China saw the biggest rise in attractiveness, now appealing to 60% of investors, up 15% since May 2020.

The US was also seen by investors as a more popular investment location, with 67% of UK investors now considering it to be a more attractive market following November’s presidential election.

18% of investors said they had increased their allocation to US investments over the past three months.

More than half of UK investors said they are optimistic about the outlook for global equity markets in the next 18 months.

Compared to May 2020, that’s a 8% improvement in investor confidence.

In addition, 47% of investors experienced an increase in the value of their portfolios since May, when only 29% saw a rise in the value of their investments.

Richard Flynn, UK Managing Director at Charles Schwab, said:

“Faced with sluggish recoveries in UK and European markets, British investors are going global, turning to Japan, China and the US for higher returns. Investors are more likely to look abroad for opportunities as their optimism increases and we’re seeing British investors becoming more bullish as the performance of their portfolios improves.

“The combination of a strong bounce back in the Far East coupled with confidence in the Biden administration positions these markets as the Big Three outside of the UK for investors.”