UK Investors Have Severley Unbalanced Portfolios

The average UK investor holds 81% of investments in the UK and only 5% in US

Up to 57% of investors do not wholly plan their portfolios

UK investors* are holding just over 80% of their portfolios in UK equities according to research conducted by MORI on behalf of Framlington. The research shows that the majority of investors are not building sensibly diversified portfolios. The asset allocation contrasts with The WM Company's model portfolio for a balanced investor - which would comprise 58% of investments held in the UK.

UK investors tend to be slightly overweight in Europe (an average holding of 11% compared to WM's benchmark of 8%). By contrast UK investors are underweight in the US (the world's biggest economy) holding 5% compared with the benchmark 8%.

Other interesting findings:

• Over half (57%) of investors admit to building up their portfolios in a sometimes unplanned way.
• IFA users, however, are more likely to have planned all their investments with (60%) having done so. As a result these IFA users tend to be less heavily overweight in the UK - with an asset allocation of 78% in the UK.
• Older investors, aged 65 and over, hold up to 90% in the UK - probably because they invested through PEPs over several years (which were more restrictive than ISAs in terms of where you could invest).
• Men tend to have a better balanced portfolios than women: The average male investor holds 78% of his portfolio in the UK, whereas women have much more in the UK - on average 84%.

Craig Walton, Marketing Director at Framlington commented: "Investors should not only plan for the future but also take a retrospective look at their investments, as unplanned and unbalanced portfolios can leave investors susceptible to unnecessary risks."

The following table illustrates the asset allocation of the average investor in the UK, compared to the average UK portfolio (WM Private Client Index), an older age group and investors who've bought through an IFA.

* i.e. those who invest in ISAs, PEPs, Stocks and Shares, Unit Trusts and Investment Trusts

Technical details

The research project was carried out by MORI Financial Services, amongst 500 investors, aged 18 and above, from 13 to 24 November 2000 in order to monitor trends amongst investors about asset allocation and portfolio planning.

To obtain further information on any of the Framlington funds, investors should visit www.framlington.co.uk or call Customer Services on 0845-777 5511. For an ISA investment pack investors should call the 24hr ISA literature line on 0845-702 3138.