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Stock markets are too high and set to fall?
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It will be under 20% of every publicly listed company in the world, given that many are not considered "free float". But while unsettling, I don't think it is all that unusual. Obviously the companies at the top are different at different times, but the peak concentration in each era can reach levels like this. Ramin PensionCraft did an analysis of this in one of his videos one of the last times we were bubbling up to an ATH.
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More data on the demographics of US markets stock and investments ownership, from the Federal Reserve. I find it helpful to understand such things, because it helps explain some of the wealth transfer issue. Whether or not other countries have similar profiles remains unclear but I suspect many will follow similar lines.
https://usafacts.org/articles/what-percentage-of-americans-own-stock/
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Perhaps you already knew these things, I didn't, perhaps there's another out there who also didn't know.
As of one year ago, overseas investors held over 59% of the UK equities market whilst resident Brits hold only 12%.
- The total value of shares held in quoted UK-domiciled companies listed on the London Stock Exchange (LSE) was £2.54 trillion at the end of 2024.
- Overseas investors continued to increase their holdings, with the proportion of UK shares owned by the rest of the world reaching a record high of 58.8% in 2024, up from 57.7% in 2022.
- UK-resident individuals held 11.6% of quoted shares, which is an increase of 0.8 percentage points from 2022; these holdings were valued at £295.0 billion – a record-high value.
- ….beneficiaries in the United States held £693.9 billion in 2024, which is the largest proportion of UK quoted shares of any country outside the UK and is over half the estimated £1 trillion of UK quoted shares that are owned domestically.
Assuming the US Fed and the UK's ONS aren't cynically distorting the facts for their own purposes (!), it seems reasonable to think that UK markets are heavily influenced by US residents investing behaviour and that the wealth transfer that is taking place there currently, will impact UK markets accordingly.
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Shares on the UK stock exchange are about 59% owned by overseas investors against 41% owned by UK investors not 59% overseas and 12% UK as your post implies.
Most of the UK resident ownership is indirect via platforms and unit trusts/OEICs and defined benefit pensions which isn't included in the 12%.
From a quick glance (someone can correct me if I'm wrong) it appears to be about 41% UK, 27% US, 32% other overseas.
I came, I saw, I melted3 -
All of my previous post, bar the opening and closing para's, is a direct quote fropm the ONS report, apologies for not putting it all in quotes.
My understanding is that the majority of UK owned shares are owned by UK institutions and that the net volume held by the UK public who are UK domiciled, is about 12%. "29 Jan 2026 — UK-resident individuals held 11.6% of quoted shares, which is an increase of 0.8 percentage points from. 2022".
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All other things being equal, you'd expect overseas share ownership to be distributed roughly according to global wealth distribution, with the home country having a bias toward its own shares, and that is what is seen. The per capita data suggests the average UK person owns about double that of the US person. But I rather suspect that data is skewed by bodies corporate domiciled in one country but with foreign ownership.
The time series is quite interesting. In 1963 over half of share capital was owned privately by individuals, 10% by insurance companies, and less than 10% by investment funds. Rather than seeing an overall increase in the latter, it has decreased, while "Rest of world" has gone from 7% to nearly 60%. Which leads me to wonder how multinational custodians like State Street are being classified.
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That would be a significant misread. Even if a UK institution is on the share register, the beneficial owner of the shares may be an individual. Presumably, the 12% refer to individuals who directly own shares, rather than buying them through an investment platform where they are held by a nominee (company).
If 59% of shares are owned by overseas investors (including companies), then it must be the case that 100% minus 59% = 41% are owned by not overseas investors (including companies) = UK investors.
In addition to the 12% who own directly, there is another 27.7% of UK corporate owners who are likely to be holding on behalf of individuals.
Zero pounds of my UK share ownership will be registered in the "individuals" category. It will be divided between the "other financial institutions" category, the "pension funds" category, and the "investment trusts" category.
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Is the point not that 59% of the UK market is owned by overseas investors and that regardless of the percentage held by UK individuals, vs UK institutions, wealth transfers by the overseas element have a greater influence on market behaviour than domestic activity does.
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Why would transfers of wealth between investors residing overseas have a greater influence on market behaviour than domestic activity? Are you suggesting that the death of a US billionaire will move markets more than a downgrade to an economic forecast in the UK? How would such things be quantified?
Perhaps you are predicting that a significant proportion of the 59% will be sold as wealth is transferred, and the next generation won't want to own UK stocks? Of course we have the same problem of not knowing what fraction of that 59% represents beneficial ownership by an individual rather than say an investment bank.
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The subject is wealth transfer, not the impact on markets by economic reporting or changes in economic activity. It appears to me, from the things I have read, that heirs to late boomer estates do not regard traditional share ownership in the same way as their benefactors, certainly at least, the preference for different asset classes is not the same, one case in point is digital assets. How this will play out over the duration of the transfers is very unclear but I think it would be foolish to ignore its potential impacts. Whether or not todays markets are being supported/suspended/aided as a result of this transfer, is a point I'm trying to understand.
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