According to a recent global fund manager survey by Bank of America Corp., fund managers are reducing their exposure to British equities.
This trend is attributed to the declining popularity of cheaper, value shares and banking stocks. A net 21% of global investors are underweight in UK equities, a significant increase from last month's 6%.
According to Bloomberg, the UK fares better than the US, where 34% of investors are underweight. However, as investors anticipate a potential peak in central bank rates, the demand for value stocks has decreased. 15% of UK investors believe that value stocks will underperform growth stocks in the coming months. Bank of America told Bloomberg that the banking sector is seeing "capitulation" with the industry slipping to an underweight position, as per the survey. This could be due to concerns about the economic recovery and the potential impact of rising interest rates.
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