Deciding on whether to invest in UK or Global shares through investment funds is a question I get from many investors. The natural inclination for many I have seen is to invest primarily in UK funds. This I suspect has a lot to do with investing in what you know. People feel closer to and therefore more comfortable with UK shares.

However, investing is more of a science than an art based on emotions and feelings. You should do what makes sense and not what feels right. So if we look back over the past 1, 3 and 5 years we can see the following growth has taken place. The interesting thing for me is not that Global shares have outperformed UK shares but there has obviously been a period throughout the last few years when at times UK shares had outperformed Global shares, and then at other times Global shares had outperformed UK shares.

To me the moral of the story is that you should in fact not only invest in both but carry out rebalancing. I wrote about the importance and benefits of rebalancing your investments in a blog some time ago, but the charts below really do spell out the benefits of systematically and regularly buying and selling through the rebalancing process.

UK V Global Shares 1 year

UK V Global Shares 3 years

UK V Global Shares 5 years

 

Blog by Jaskarn Pawar

Jaskarn Pawar is an experienced and award winning Chartered and Certified Financial Planner. He advises people all over the UK on financial planning and wealth management issues to help them reach solutions to fit their personal needs. You can contact Jaskarn on 01604 211234 or by e-mail on jaskarn@investorprofile.co.uk