Four in five UK-based retail investors now hold London-listed stocks in their portfolios, research revealed on Tuesday, representing the highest level in a year.
This meant the number investing in UK companies was up 10% between the fourth and first quarters, eToro said, based on a survey of 1,000 retail investors.
“The UK stock market has been out in the cold for several years but our latest survey suggests that sentiment around the FTSE could finally be gathering steam,” eToro strategist Ben Laidler commented.
A key factor in the jump is optimism that the Bank of England could begin cutting base interest this year, as per the trading platform.
“Some predict [this] could trigger a so-called market rotation away from big tech stocks and the US market, toward cheaper markets and more rate-sensitive economies,” it said.
The UK market’s “stellar dividend performance” is likely also benefiting the market, Laidler added.
“Although it's been hard to look past the recent performance of big tech stocks and the Magnificent 7, one in five UK investors believe the time has come to shift focus, with many recognising the value of dividends, as savings rates start to dwindle.”