Over recent days, the Trump tariff chaos has provoked a mix of high anxiety and jubilation in stock markets.
Yet, even against the background of this week’s intimidating fluctuations in the FTSE 100, professional and private investors have been steadily snapping up shares in household names and other British businesses.
These purchases suggest that UK markets could be returning to fashion since they ‘represent a relatively safe haven in a world turned upside down by the tariff agenda’, as Charles Luke, co-manager of Murray Income Trust, argues.
In 2024, the FTSE 100 was likened to a ‘museum’ that was full of stocks in old-world industries such as banking, mining and oil – but without a 21st century tech titan.
However, in the uneasy environment of 2025, it seems that supposedly outdated British names may be coming back into vogue as investors place less trust in Big Tech.
Before the tariff pause, Dan Ives of Wedbush – Wall Street’s most influential tech analyst – predicted that the policy could unleash Armageddon on Amazon and the rest.
City limits: In the uneasy environment of 2025, it seems that supposedly outdated British names may be coming back into vogue as investors place less trust in Big Tech
This fear may be overstated, but it underlines the hazards facing those British investors who, in March, committed £1.7billion to US funds but withdrew £1.2billion from UK funds, seemingly oblivious to the growing focus on attractive propositions on these shores.
In a continuation of the takeover spree of UK plc, the US private equity giant KKR is to acquire Assura, the FTSE 250 group that owns GP surgeries, for £1.6billion.
The 49.4p-per-share offer represents a premium of 32 per cent over Assura’s share price in February.
The broker Peel Hunt says that the pace of takeovers gathered strength in the first quarter: some 15 companies are currently the subject of a bid and about half of the suitors are from overseas.
But there are signs that UK companies are also seeking out acquisitions in their own industries, grabbing the chance to expand while they can.
Urban Logistics, an REIT (real estate investment trust) that owns warehouses, yesterday received an approach from the FTSE 100 REIT LondonMetric, which provides logistics to Marks & Spencer and others.
The share price of Urban Logistics is at a 23 per cent discount to its net asset value, helping explain its desirability to LondonMetric, which seems to be on a shopping spree. At the end of March it bought another REIT – Highcroft Investments.
More consolidation in this sector seems likely.
Meanwhile, private investors are putting money into BP, HSBC, Legal & General, Lloyds and Rolls-Royce, the Interactive Investor platform reports, saying that volumes of trading were high, with more clients buying than selling and determined not to retreat in the face of the tariff onslaught.
A decent income is also a lure, as Richard Hunter of Interactive Investor points out.
For example, Legal & General is a blue-chip stock with a dividend yield of 9.7 per cent.
The deals indicated a flight to quality, a belief certain long-established businesses will find a way to thrive.
It seems these investors are convinced that UK shares were cheap even before the rout, and look more appealing today.
Evidently, Barclays takes this view – it is suggesting clients should ‘overweight’ their portfolios with British shares.
The bank points out that the average price-to-earnings (p/e) ratio on the FTSE 100 is 17.1 times.
This compares with 23.1 times for the German Dax index and 24.9 times for the US S&P 500 index. The p/e ratio is a guide to value.
Should you join this new Backing Britain movement?
Here are some of the routes to take a bet on it – and the new rules for investing at this nerve-jangling moment:
THE OPPORTUNITIES
If you have scant exposure to the UK, consider a ‘passive’ fund such as Fidelity Index, Ishares UK Equity Index and Vanguard FTSE 250.
Active funds and trusts recommended by major investor platforms include Artemis UK Select, City of London, Diverse Income and RGI UK Recovery.
Factsheets, available online, detail contents of fund and trust portfolios, enabling you to get a spread of FTSE 100 names which are global players as well as more domestically focused smaller companies. Diversification matters more than ever.
If you are ready to gamble, and can afford to take a long-term view, look at shares particularly hard-hit by the slump.
Ben Ritchie, co-manager of the Dunedin Income Growth Investment trust, says: ‘There are some companies that are trading at multiples lower than at the nadir of Covid-19 when we were unsure if the world could function.’
Ritchie’s highlights include: the animal genetics business Genus; the building products manufacturer Genuit;…
Read More: As Trump’s tariffs hit stock markets, experts recommend you BACK BRITAIN