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No bias like home

Dave Baxter examines what clarity over the end of the pandemic and Brexit could bring for the UK market
No bias like home
  • The Covid-19 pandemic has forced most people to stay put
  • The opposite rings true for our investments

Kitchen tables, desks and beds. While many elements of 2020 will eventually fade from the collective memory, few of us will quickly forget just how much time we have spent working, eating – and living our lives – in the same confined space. From months spent labouring at a kitchen table to ‘staycations’ and even the dreaded Zoom party, the Covid-19 pandemic has forced most people to simply stay put.

But if few have left home shores or even their neighbourhoods that much since March, the opposite rings true for our investments. UK investors have long been fond of overseas stocks and funds, with any home bias that once lingered in portfolios rapidly receding in recent years (see right chart below). The year 2020 is likely to have accelerated this: the pandemic has seen investors ditch a market that, having been dogged by Brexit uncertainty, then found its biggest industries on the wrong side of many lockdown trends (see chart).

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