Coutts, a bank with a prestigious clientele that includes members of the royal family, has caused controversy with its recent decision to shift nearly £2 billion of client funds away from the London stock market to invest in foreign ventures. This move, affecting six key client funds, reflects a strategic shift in asset allocation, with UK stocks being reduced from as high as 40 per cent to levels ranging from 1.9 per cent to 3.5 per cent, depending on the fund.
The decision by Coutts to move away from a UK-centric investment approach has attracted attention, especially given that the UK government holds a 28 per cent stake in the bank's parent company, NatWest. This move has the potential to clash with the UK government's push for increased investment in UK equities, creating a notable ripple in financial circles.
Charles Hall, a prominent figure in financial research, commented on Coutts's sizeable move away from UK markets, amounting to £1.96 billion, which significantly impacts the ongoing trend of outflows from UK funds. This shift, while in line with Coutts's goal of adopting a more global investment strategy for enhanced diversification and opportunities, has the potential to further pressure the UK market, already facing challenges with valuations and outflows.