The FTSE 100, with its tilt towards mining and energy, offers interesting diversification benefits, that is assuming the behemoths in these sectors don’t uproot to the US – something that poses a frightening prospect.
In recent weeks the FTSE 100 has been playing catch up with other global indices, although in part owing to the currency translation tailwind of a weaker pound. Could this performance shine a light on a market more broadly out of favour? Possibly.
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Those with embedded diversification don’t need to worry so much about where, when and how the returns will be generated over the long term. Those aligned with the global equity benchmarks may want to look a little closer.
James Flintoft is head of investments solutions at AJ Bell
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