Why the 'Great Rotation' away from US assets will boost Britain

Disenchanted investors have only just begun to withdraw capital from America, says Jeremy McKeown.

City of London with Thames river at sunset
(Image credit: Getty Images)

Former Citibank CEO Walter Wriston claimed that capital, allowed to flow, would go where it is wanted and stay where it is treated well. His contemporary, the legendary investor John Templeton, said that bull markets mature on optimism and die on euphoria. Both men understood how capital flows and sentiment affect asset values. If they were alive today, they would realise the significance of how global equities have become so concentrated in a few large US technology companies.

The US share of the MSCI World index now represents far more than twice its share of global GDP, and all ten of the largest firms in the 1,350 company index are US-listed. The Magnificent Seven AI companies alone account for 21% of this global gauge. By any measure, the world is long on US technology amid a well-established view that America is the pre-eminent home for its investment capital.

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