Confidence in UK stocks hits new high among retail investors
Confidence in the UK market has hit new highs among British retail investors as savers move away from US stocks.
A third of all retail investors are backing the UK as the top performing stock market over the next five years, a survey of 1,000 investors from Etoro found, well above the previous record of 24 per cent last month.
European stocks also jumped in popularity among investors, rising from being included in 29 per cent of portfolios to 34 per cent.
The survey was held throughout February and March, before American president Donald Trump announced sweeping tariffs that are expected to send the US to the brink of recession.
However, investors have actually been moving away from US stocks for some time, with fears over the path for AI-focused companies and high valuations plaguing American markets.
Just 12 per cent of retail investors said the US Magnificent Seven will ‘significantly’ outperform the market this year, while 37 per cent expected returns to match the market.
Meanwhile, 36 per cent of investors predicted that the US will outperform other markets this year, down from 41 per cent in the quarter before.
“Bullish sentiment towards the UK follows the FTSE 100’s fast start to 2025, which despite having lost some momentum, comfortably outpaced the S&P 500 in the first quarter,” noted Etoro global market strategist Lale Akoner.
The FTSE 100 grew four per cent in the first quarter of the year, compared to a five per cent fall in the US S&P 500.
“Investing in the US has richly rewarded investors in recent years, but a pivot from growth to value has provided a tailwind for the UK market, which is dominated by stable, income-generating stocks at discounted valuations,” added Akoner.
However, UK investors still told Etoro that they were expecting greater growth from the tech sector, with 58 per cent predicting AI stocks to grow in 2025, compared to eight per cent predicting a fall.