More than $15 billion has been invested in the UK since the start of year, in a sign that equities on the LSE are relatively cheap and Britain is seen as a safe haven.
The UK stock market has just received a powerful vote of confidence from the USA. According to analysis by Schroders, American investors have invested more than $15 billion (£11 billion) into UK equities since the start of 2025. This marks the largest allocation US investors have made to any overseas market this year, highlighting a growing interest for London-listed shares.
Sue Noffke, Head of UK Equities at Schroders, explained to The Sunday Times: “We are currently seeing increased interest in UK companies from our US and international investors, with many noting the relative value available across a range of sectors.”
Why is the UK attracting US investment?
While global investors have channelled funds into Asia, Japan, Latin America, and China, Europe has seen far less attention, with the UK standing out as the exception. What’s driving this change?
One of the main reasons is attractive valuations. London-listed shares are still considered relatively cheap compared to global peers. An additional factor is regulatory stability and strong rule of law. Investors value the UK’s transparent and established market framework.
Sector opportunities
Schroders reports growing interest in financial institutions, defence, and AI industries, as well as domestic defensive stocks such as telecoms, utilities, and insurance, which continue to trade at a discount compared to international peers.
This shift comes after years where UK shares were often overlooked, with Brexit-related uncertainty keeping investors away. The renewed interest signals that confidence is returning to the London market.
Market performance
The UK stock market has actually been doing better than the US this year. Since January, the FTSE All-Share Index (which tracks most UK companies) has gone up by around 14%, while the S&P 500 in the US has only risen by about 2% once converted into pounds. However, if you look at the past five years, the picture changes: the US market has nearly doubled in value, driven mainly by technology stocks, while the UK market has grown by about 74% including dividends.
Still, recent momentum has clearly shifted. Net inflows into FTSE-linked exchange-traded funds (ETFs) in June and July, the first two consecutive months of inflows in a year, suggest global investors are warming up to UK equities again.
UK investment funds offering good value
This positive international sentiment could benefit UK investment trusts, which continue to trade at discounts to their net asset value. On average, UK equity investment trusts are priced 6% below the value of their assets, making them an appealing entry point for investors seeking long-term growth.
For businesses, this surge in international investor confidence is more than just market news. It reflects a broader trend: the UK is regaining appeal globally, not only for capital but also for talent and innovation. Sectors like finance, defence, AI, and telecoms are seeing renewed interest, industries that also attract skilled professionals from abroad.
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