CAMRADATA Live activity: Good next-door neighbours
This month, Mithursha Kesavan of CAMRADATA highlights what appears to be an increase in the investment case for UK and European equities.
The total search activity in CAMRADATA Live in the past year shows there was a gradual increase in asset-class searches nearing the end of the first quarter of 2021. Two asset classes in particular were UK Equity and European (inc. UK) Equity, which were the fourth and eighth-most researched asset classes by UK institutional investors, respectively, during this period.
Interestingly, both asset classes have also seen an increase in interest from non-UK investors over the past 12 months. This resulted in both of the asset classes coming within the top five most searched equity strategies by all investors – UK Equity (fourth) and European (inc. UK) Equity (fifth).
The bar chart demonstrates that total activity in CAMRADATA Live for UK Equity was increasing up until October 2020, and similarly for European (inc. UK) Equity up until September 2020. A slight drop followed in November 2020 (UK Equity) and October 2020 (European inc. UK Equity), perhaps due to the Brexit deal and the Covid-19 pandemic creating uncertainty in the financial markets. However, the activity that started to increase at the end of the first quarter of 2021 is probably due to the rapid vaccination programme, prompting a swift recovery in global stock markets.
As can be seen, search activity was across all capitalisation sizes and various styles of investing. For UK Equity, more than half (55%) of the total activity by size was All Cap and the total activity by style was mainly No Predominant Style at 33%. For European (inc. UK) Equity, 45% of the total activity by size was All Cap and 34% of the total activity by style was Core.
The ambiguity around Brexit and the pandemic creates uncertainty for investors’ decisions about these two asset classes. This may possibly crowd out the positive opportunities they may entail.
Mithursha Kesavan is an associate at CAMRADATA, the owner of Funds Europe. *All figures are for the 12 months to March 31, 2021 unless otherwise stated.