Global investment growth sector moves further away from UK

Geographical investment trends are changing with UK exposure in recent years reduced from an average of 42% five years ago to 32%, a new research report shows.

US exposure has increased from 19% to 22% since the financial crisis of 2008 and exposure to Europe and Asia Pacific is up 4% since 2006, according to the Association of Investment Companies

Whilst the UK still accounts for the greatest proportion of assets overall, exposure has been slashed. Cayenne Trust has reduced exposure to the UK the most over the last five years, from 71% to 29%. This was followed by Personal Assets, 57% UK exposure down to 26%, Scottish Mortgage, 35% UK exposure reduced to 10%, Jupiter Primadona Growth, 79% to 66%, and Alliance Trust, 52% reduced to 34%.

Within other developed markets, investment in North America rose from an average of 18% five years ago, 19% at 30 April 2008 to 22% at 30 April 2011. The increases since 2008 mark the beginning of Barack Obama's presidency and perhaps faith in the recovery of the North American economy, the report suggests.

Whilst managers did not see as many opportunities in Japan, with overall exposure decreasing from 8% at 30 April 2006 to 4% at 30 April 2011, exposure to other Pacific regions increased from 8% to 12% over the same period.

Holdings in China particularly increased for Edinburgh Worldwide, from 1% five years ago to 16% at 30 April 2011, and Scottish Mortgage, 5% five years ago to 14% at 30 April 2011, whilst Establishment Investment Trust increased exposure to Hong Kong from 5% five years ago to 14% at 30 April 2011.
 
Miton Worldwide Growth increased exposure to the Far East and Pacific Region from 10% five years ago to 18% at 30 April 2011, whilst Jupiter Primadona increased its exposure to the Far East and Pacific Region from zero five years ago to 6% at 30 April 2011.

Investment in Europe has also risen over the last five years; from an average of 15% in April 2006 to 19% in April 2011. British Empire Securities & General Trust increased its European exposure the most, from 26% five years ago to 56% at end April 2011.  This was followed by Cayenne, 4% increased to 22%, Monks Investment Trust, 10% increased to 17% and Personal Assets Trust from zero to 4%.

Holdings in cash and fixed interest peaked at 9% in April 2009 but have since fallen back to 5% at 31 March 2011, in line with where they were five years ago, reflecting a renewed confidence in equities.
‘In a fast paced and constantly evolving global economy, these figures illustrate that the Global Growth sector is as relevant today as ever and demonstrate first hand the advantages of active management,’ said Annabel Brodie-Smith, AIC communications director.

‘The sector is a one stop investment shop for investors looking to spread their risk over a variety of sectors and markets, and with some punchy geographical changes over the last five years, it also illustrates that managers have the courage of their convictions,’ she added.