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SPDR ETFs research reveals increasing investor appetite for UK securities

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Research from SPDR ETFs reveals over two thirds (69.7 per cent) of IFAs have a positive outlook on the UK economy, and just 2.4 per cent have a negative view.

This strong view explains why 40 per cent are planning to increase their clients’ exposure to UK securities over the next six months, compared to only 2.5 per cent who intend to reduce it.
 
Eleanor Hope-Bell, head of UK SPDR ETFs, says: “In recent weeks, there has been positive news on the UK economy including growth in GDP, increasing business and consumer confidence and improving employment figures. Given this, plus the fact that investors are feeling increasingly positive towards UK PLC, we are not surprised we have seen inflows into our UK focused ETFs.”
 
SPDR’s research reveals nearly one in three IFAs (29 per cent) who definitely plan to increase their clients’ exposure to the UK will use ETFs for this. 
 
The research also shows that 27 per cent of IFAs expect to recommend ETFs more to their clients in the future, and 30 per cent are undecided about this.
 
The growing confidence in the UK economy has contributed towards a net inflow of GBP210m into SPDR’s seven UK focused ETFs – two equity based and five fixed income. 
 
SPDR FTSE All Share UCITS ETF and SPDR S&P UK Dividend Aristocrats UCITS ETF have proved to be popular for investors looking to for equity market exposure, accounting for approximately 40 per cent of net flows into UK equity ETFs.
 
When asked how long they think it will take for the UK to return to a “normal” rate of economic growth, 47 per cent of IFAs said three years or less. Just over three quarters (77.6 per cent) expect the UK economy to enjoy steady growth over the next three to five years, with 2.4 per cent anticipating a rapid recovery.  Notably, only 1.2 per cent expects it to decline.
 
In terms of the impact that various factors are likely to have on the country’s growth, half (50.6 per cent) of IFAs said low interest rates would be very important. Some 39 per cent said this about returning business confidence, as did 17.5 per cent when asked about the importance of Sterling being competitive/export growth. Some 11.6 per cent also said a recovery in the property market would be very important in supporting an economic recovery, but only eight per cent said this about falling inflation.
 
A straw poll of 14 buy-side analysts revealed that half have a positive outlook on the UK economy, compared to just three who have a negative one.    

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