Ken Wotton, a fund manager at Gresham House, said: “This policy could serve as a catalyst for the UK market, offering a unique opportunity for taxpayers to participate in and benefit from the success of high-quality companies.”
Savers investing in a FTSE tracker have lost out as the British stock market has trailed international rivals since 2016’s Brexit vote. Over the past 10 years, an investor who consistently invested £5,000 in a tracker following the FTSE All Share would have made £67,658, according to calculations by stockbroker AJ Bell.
The same investor putting money into the Fidelity Index World, which mirrors the performance of the MSCI World, would have seen their pot grow to £97,488 – a difference of £30,000. If they invested in US stocks, they would have more than doubled their contributions to £113,230 by the end of the period.
But picking the right companies when creating your own Great British Isa could yield some real bargains. Last week JO Hambro fund managers Clive Beagles and James Lowen said the low level of a bid for electronics retailer Currys highlighted “the absurdity of UK stock market valuations”.
In a note to their investors, they claimed the catalysts for improved performance from the British market “are not only appearing on the horizon but are in danger of stampeding towards us at some pace”.
Steven Magill, a fund manager at UBS Asset Management, added that while the UK economy had fallen into recession, the 80pc of sales London-listed companies made overseas meant the health of the global economy was more important to their success. Conditions for stock markets should improve, he said, “with interest rates having possibly peaked in the US and Europe”.
Research from financial publisher Citywire meanwhile shows some of the world’s best fund managers are heavily backing British stocks in anticipation of a turnaround. The findings highlight how savers can follow the “smart money”, by investing in British companies alongside professional investors with the strongest performance records.
