We may be seeing falling inflation and even a sharp upward revisions of UK growth forecasts, but the exodus from the FTSE among the DFMs we cover continues at pace.
Indeed we have reached an interesting inflection point: for the first time holdings in US equity funds have overtaken holdings in UK equity funds.
In truth this is a trend long in the making, as can be seen in the chart below.
A glance at our allocations database shows the average exposure to UK equity funds in May was 14.7 per cent, down from 17.1 per cent a year ago, and 18 per cent in late 2021.
Average allocation to US equity funds is 16.5 per cent, meanwhile, up from a little over 15 per cent a year ago.
Moves like this can often be the result of asset class performance rather than outflows, but given the UK was the best performing developed market in the world in 2022, the drop in allocations seems to be the result of investor action.
The outliers include Evelyn Active, with 25 per cent of its balanced portfolio in UK funds and 22 per cent in US funds, closely followed by Morningstar at 24 per cent in the UK and 12.8 in the US.
But it is worth bearing in mind both of those firms are generally very overweight to equities, with the Evelyn Active portfolios at 78 per cent, and Morningstar at 62 per cent.
The peer group average is for equity exposure 56 per cent.
At the other end of the distribution, Charles Stanley maintains its long held position of just 4 per cent in UK equities and 15 per cent in the US, while Invesco is at 7.3 per cent in the UK and 18.8 per cent in the US.
Brewin Dolphin has one of the biggest gaps, with a UK equity position of 16.9 per cent and a US equity position of 29 per cent.
In the income model portfolios we cover, the average UK allocation has been more robust, remaining within the 16 per cent range since we began compiling the data, with the average allocation to equities overall being 46 per cent.
Here UK equity fund holdings remain well above US holdings, which are just above 10 per cent (a position which has also remained relatively static).
The income portfolio with the biggest exposure to UK equities is Wise at 40 per cent, while Brooks Macdonald, Morningstar and Evelyn Activer are among a number of firms with an exposure greater than 20 per cent.
At the other end of the scale, Invesco has 7 per cent in UK equities and Charles Stanley 4 per cent.
And if DFMs are lukewarm on the UK in their income and balanced portfolios, they are positively Baltic on the domestic market in their cautious portfolios, with just 6.5 per cent there.
Among those with the lowest allocation are HSBC, at 0.83 per cent, and Vanguard LifeStrategy Global MPS, which has 0.94 per cent deployed to UK equities.
The cautious portfolio with the largest exposure to the UK is Close Brothers at 19.5 per cent.
At 48 per cent, Robert Alster and his team have more than double the peer group weighting to equities in their cautious portfolio.
