The new Labour government has plenty to look at and one area they need to focus on currently is to simplify ISA rules in a bid to bolster the UK equity market and attract more investment in British stocks. Broker AJ Bell advocates for a "radical" overhaul of ISAs, proposing a single product that combines different ISA types and suggests raising the overall ISA allowance to £25,000. Michael Summersgill, CEO of AJ Bell, believes these changes would streamline long-term investing. AJ Bell also recommends eliminating stamp duty on UK investments to incentivise investing in UK assets. Diversification of portfolios and the rise of passive investing have contributed to significant outflows from UK equity funds, with retail investors withdrawing nearly £55 billion since 2016, as noted by the Investment Association. In contrast, US and global funds have seen substantial inflows, with North American and global funds attracting £7.8 billion and £7.58 billion respectively in the first half of 2024, according to Calastone. London Stock Exchange-listed companies are currently more affordably priced than their US counterparts, suggesting a favorable investment opportunity. Positive UK economic indicators, a shifting international perception, and potential factors like improved European political stability and a stronger sterling could further enhance the UK equity market, according to Michael Brown, chief investment officer at Martin Currie. Laith Khalaf, head of investment analysis at AJ Bell, highlights the need for strategic changes to revitalize the UK equity market amidst challenging times. #UKEquityMarket #Investment #StockMarket #ISA #Finance #UKStocks
