The UK is back in business. Someone forgot to tell that to British investors

Britain’s stock market is outperforming Wall Street in 2025, and the UK economy has enjoyed the fastest growth of any G7 country during the first half of the year. Yet British investors are mostly missing out while foreign buyers are reaping the benefits.

- Joachim Klement

The UK stock market has been plagued by sluggish performance and a dearth of IPOs for so long that any good news has a tendency to travel quickly among the local investor community.

Last week, I received several emails about a study from Schroders showing that US investors were moving more money into UK stocks than anywhere else. Indeed, after withdrawing almost $100 billion from the UK between 2020 and 2022, the last three years have seen persistent inflows from Americans.

Unfortunately, this optimism about UK stocks doesn't appear to be shared by UK investors. According to the Investment Association, a UK trade body, retail investors have sold more than £50 billion in UK equity funds over the last five years while buying more than £25 billion in international equity funds. And unlike American investors, the domestic crowd has not warmed to UK stocks in the last three years.