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Disclosure – Non-substantive Research
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour.
It is well known that most investors overweight their home markets. Recently some research on UK pension funds highlighted that their allocation to UK equities was at the lowest it has ever been, with DB schemes having just 1.4% in UK stocks. However, if you do the maths, as we did, you can work out that even they remain overweight the UK versus a global equity market benchmark. It’s just their equity allocation as a whole has collapsed, to just 13%. So should they be cutting their allocation even more? Should we all be more rigorously examining our portfolio and scaling back our UK equity allocation to its 3.8% weight in the MSCI World Index? Here two of our analysts debate the issue…
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