Investments 

Hargreaves says advisers 'negligent' about US

Hargreaves says advisers 'negligent' about US

Financial advisers in the UK are "negligent" in not having enough of their clients' assets invested in the US market, Peter Hargreaves has said.

The Hargreaves Lansdown founder said there were positives in the US political environment at the moment that advisers would do well to embrace, as he accused advisers of having home bias.

He said: "Whatever your view of Trump, and personally I think he is a fairly odious character, the economy is doing well there with low tax and low regulation.

"If you have political leaders that are positive about business, that helps business and markets.

"In the UK we don’t have that, it seems to be fashionable among different leaders to always want to bash business and that isn’t good. I think there is too much of a home bias in the UK and advisers are negligent for not having more in the US."

In addition to his holding in Hargreaves Lansdown, valued at about £2.6bn, Mr Hargreaves has a holding of more than £30m in the Blue Whale Global equity fund, which has more than 60 per cent of its capital in US equities.

Mr Hargreaves is not the manager of the fund but seeded it with £25m when it launched in 2017.

Mr Hargreaves is also a long standing investor in the Lindsell Train Global Equity fund, which has North American equities as its largest allocation.

Peter Elston, chief investment officer at Seneca, said he agrees with Mr Hargreaves that the long standing pro-market sentiment in the US is a positive, but he believes that the valuation at which US shares trade relative to the rest of the world already reflect the relative difference in business climate, meaning they are expensive.

He added in the shorter-term, the US Federal Reserve has signalled that it won’t put interest rates up this year, which typically indicates that it fears the rate of growth in the economy is slowing.

Simon Edelsten, who runs the £207m Mid Wynd investment trust, has just under 50 per cent of assets exposed to the US, which he said was more than many other global managers.

He said: "The tax cuts last year seem not to have added to growth but have strengthened balance sheets and started some mergers and acquisitions.

"Growth is still very good in our US investments, which are mostly exposed to the overseas market. The political cycle is entering the worry stage, but at least it hasn’t the problems of the UK and Europe."

david.thorpe@ft.com