Global investors are shifting into the FTSE 100 and FTSE 250 as many reassess richly valued US equities, creating fresh momentum for UK stocks that had lagged other developed markets. Why investors are rotating to UK equities - Valuation gap: The S&P 500 is trading at a notable premium to its historical norms, while UK indices show lower price-to-earnings ratios and offer higher dividend yields — making the FTSE indices look comparatively cheap. - Sector mix and resilience: The FTSE 100’s heavy exposure to energy, financials and commodities gives it global revenue streams and a degree of inflation resistance. The FTSE 250, dominated by domestically focused mid-caps, stands to gain if UK inflation stabilizes and consumer confidence improves. - Currency stability: A steadier pound has eased FX volatility for overseas investors, boosting the appeal of UK-listed multinationals. - Diversification impulse: US outperformance in recent years—fueled by AI and tech earnings—has concentrated returns in a handful of mega-cap stocks. That concentration risk is driving institutional allocators to rebalance toward broader sector exposure and income-producing assets in the UK. - Monetary backdrop: Market expectations of gradual Bank of England rate adjustments could support equity multiples in the near term, adding another tailwind for UK shares. What this means for portfolios (and crypto investors) - Traditional asset allocators are rethinking regional weightings to capture lower relative valuations and potential downside protection if global growth cools. - For crypto-focused investors, the shift highlights two themes: the persistence of capital flows between risk assets and traditional markets, and how relative yield and FX stability can redirect institutional liquidity. Periods of equity reallocation can influence broader risk-on/risk-off sentiment and cross-asset flows, including into and out of crypto. - Continued valuation disparities between US and UK equities could keep inflows into the FTSE 100 and FTSE 250 if investors maintain their search for income, diversification and lower-priced exposure. Bottom line After an extended spell of underperformance, UK equities are attracting renewed international interest as a cheaper, yield-rich complement to US tech-heavy markets. While flows can turn quickly, current market mechanics suggest the FTSE 100 and FTSE 250 are well positioned to benefit from ongoing portfolio diversification and a reassessment of US equity concentration risks. Read more AI-generated news on: undefined/news

#BTC #ETF