Emma Wall, Chief Investment Strategist, Hargreaves Lansdown: “Investment platforms and banks have agreed to champion UK investments in a bid to boost retail flows to London SE listed stocks, the Chancellor has announced in today’s Budget. The initiative has Hargreaves Lansdown full support, which we believe will help meet retail investor demand for the best of British. As we revealed last week, while the UK makes up just 3% of the MSCI All Country World Index, across HL’s 2 million clients, the UK is by far the most popular investment region, accounting for 35% of the entire platform through either directly held UK shares, or UK equity-focused active and passive funds, investment trusts and ETFs. Nine of the top 20 largest investments in HL clients’ stocks and shares ISAs are UK equity focused.
These new hubs will help meet this retail investor demand with curated stocks and fund ideas, with the funds highlighted classified to one of the three IA UK equity sectors (or other equivalent sector classification) – UK All Companies, UK Equity Income and UK Smaller Companies, which require an 80% allocation to UK equities. We welcome the opportunity to showcase the best of British across our platform – both direct equities and manufactured and third-party funds and investment trusts.
The hub, alongside newly announced the stamp duty holiday for new listings on the London Stock Exchange, should help boost interest in UK-listed investments. London has been losing out to New York in recent years, as businesses favour the funding and regulatory environment of the NYSE. But this may be the carrot British businesses need to plump for a domestic listing.
Currently, investors have to pay 0.5% stamp duty tax when they buy shares, but the Chancellor has confirmed this will be waived for new listings for up to three years. This would make buying British more enticing for investors and help redress some businesses’ concerns about demand for UK shares.
We also welcome the renewed commitment to VCT and EIS schemes with new rules to broaden the eligible companies, supporting early-stage UK businesses.
These three measures, alongside the Leeds Reforms, help strengthen the Government’s stated aim of building an investment culture and supporting UK listings. HL is supporting the retail investing campaign announced in Leeds and is busy developing new support for investors, once the new targeted support regime comes in at the end of the year. The progress being made on amending risk warnings is a crucial ingredient here. HL knows that giving people more information about how investments perform over the longer term helps build confidence in taking that first step into investment.”
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