Investors Are Moving From The US To The UK, Here’s Why

President Donald Trump’s tariff situation hit New York hard. Financial Times numbers show United States shares lost $5.4 trillion in value in just 2 trading days after the plan surfaced. Selling gathered pace as China replied with its own duties, and the mood across global markets darkened. The S&P 500 sank 9% for the week, its worst run since early 2020, while volatility increased.

Bank of America’s latest Global Fund Manager Survey captured the extent to which this went. Allocations to United States equities fell by 40% units in March, turning a 17% overweight into a 23% underweight — the highest monthly rotation on record. In the same poll 69% of managers said the tale of “US exceptionalism” has peaked.

And then, average cash holdings went up to 4.1% of portfolios, the highest level since the first pandemic spring, while global growth hopes fell to a 2 year low. In the same survey 63% of respondents now see the world economy slowing during the next year.

“ A majority now expect the administration to hurt growth and lift prices, effectively creating a stagflation threat,” Bank of America strategists Andreas Bruckner and Sebastian Raedler wrote. They warned that a tariff‑driven slowdown could tilt portfolios towards cash and defensive shares for months.

 

 

How Did UK Shares Move To The Front Of The Line?

 

Wall Street stumbled, and at the same time City AM reports that global managers turned 4% overweight on London‑listed firms, the highest reading since mid‑2021 and only the second month in three years with a positive stance.

Just a month earlier the same survey had ranked Britain as the least attractive market, with an 18% underweight. The jump put UK equities behind only utilities and banks in the sector league table.

Cheaper valuations, a weaker pound and shelter from tariff crossfire all play a part, and Bank of America’s poll also shows the largest cash build‑up since early 2020, meaning funds have dry powder (this, according to Investopedia is defined as “the cash reserves an individual company proactively maintains so that it can meet its obligations during times of economic stress”) that can be directed towards markets viewed as better value than New York. Lower earnings multiples give overseas buyers extra comfort even after sterling’s rebound.

 

Will The UK-US Flow Keep Rolling?

 

Reuters data from Calastone show UK savers poured £1.8 billion into North American equity funds in March, the 3rd largest monthly inflow in a decade. The rush came even as global managers ran from New York, which shows the divide between professional and retail money.

Tax year planning and a belief that Wall Street had fallen far enough tempted retail buyers before the tariff news. Trading volumes reached unusual highs as opinions on the United States outlook pulled in opposite directions. That gamble looks painful now, but tax perks often exceed short‑term nerves.

Overall equity funds took in £1.4 billion during the month even as money left domestic shares, and £513 million headed into money‑market vehicles for safety. Bond funds lost £700 million. The pattern shows savers hedging their bets while still hunting for bargains.

The next survey will show whether that cash motivates more buying in London. For now, Bank of America data hints that caution may stay through spring, keeping the FTSE on many buy‑lists while Washington plots its trade course. Spring budgets and UK tax breaks could add extra fuel if global trade tension continues. Investors will watch April’s tariff deadlines for extra clues.