Best Investments For UK Investors In 2024

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This guide looks at some of the best investments for UK investors in 2024. With the benefit of hindsight, there were some obvious momentum and thematic plays in 2023, such as AI and US tech, and some surprising rallies too. This shows that the international markets throw off some surprise great investment opportunities now and then.

By comparison, the main UK stock market was more or less flat. Aspiring investors must therefore cast their net wide in search of better returns. But what and where should you invest if you are based in the UK? Here we highlight some of the best potential investments for 2024.

Best Investments For 2024

The most popular investments in the UK are stocks, funds, and bonds. The rule of thumb here is that you allocate your capital according to your needs. Investors who want a diverse portfolio invest in all three; for those who want lower risk, hold more bonds than stocks – due to lower risk appetite.  Or for more risk, and therefore better potential returns, hold more shares. There is no ‘right’ allocation for everyone – only the right allocation for you.

It’s also important to remember that there are bull and bear markets. Whilst the best investments appreciate in value, nothing goes up in a straight line. A bull market is a period when prices keep rising. A bear market is the opposite, where the value of investments goes down.

These are the best investment asset classes to invest in for UK investors:

UK Shares

The UK stock market is one of the best-known in the world. The London Stock Exchange, itself a listed company (ticker: LSEG), houses many world-class institutions with origins dating back to the nineteenth century.

What are the best UK shares?

Of course, there are some drawbacks when it comes to buying UK stocks, primarily:
  • Lack of tech stocks – this means investors who wish to have exposure to the booming sector have to buy them elsewhere.
  • Few large-cap growth stocks – essentially, this suggests the UK market is overweight on value-oriented stocks. Certainly, there are no trillion-dollar stocks on the LSE.
  • Low capital growth – for example, the FTSE 100 Index has been trading sideways over the last few years, as seen from one underlying ETF (ticker: ISF).

All in all, some exposure to UK stocks may be desired, although one has to be patient in realising the returns amidst the shifting political and economic landscape on this Great Isle of ours.


US Stocks

The American stock market these days is in a league of its own.

At the end of January 2024, the US equity market fetched a total market capitalisation of $50 trillion dollars. This figure, by some calculations, occupies up to 45 percent of the world’s total equity market capitalisation. Buying US Stocks is thus indispensable to nearly all global investors: The market is simply too large to ignore. In comparison, UK total market cap of $3.2 trillion (equivalent to one Apple) is just a meagre 2.9 percent of the world’s total.

Out of the ten largest stocks in the world now, eight are found in the US. So dominant are the top few stocks that commentators have labelled these mega-cap companies the ‘Magnificent Seven‘,  which include Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), Google (GOOG), Amazon (AMZN)Meta (META) and Tesla (TSLA). This Mag7 replaces the previous acronym ‘FAANG‘. Together, this group occupies more than a quarter of the entire S&P 500 index.

Stock Market Capitalisation By Region

Source: Nikkei Asia (2024) 

What makes US stocks such good investments?

  • Bullish price momentum – take a look at the Nasdaq 100 Index. Its price strength seems to defy the economic gravity and the burden of high-interest rates. New all-time highs occur week after week. 
  • Profitable large-cap tech stocks – eg, the ‘Mag7’ are trillion-dollar stocks with billions of profits. Did you know Meta planned a $50 billion stock buyback just recently? That’s how cash-rich these companies are right now.
  • Stronger-than-expected economy – Reams of economic data show the US economy is not wilting despite the sizzling inflation and large leaps in the Fed Funds Rate since 2020. This is keeping up corporate profits and with it, the valuation of the US companies.

However, there are some drawbacks in buying US stocks now, for the following reasons.

  • The first is that many US stocks are optimistically valued. This rosy outlook may or may not materialise in the year ahead. Any disappointment like earnings growth could hit these lofty stock prices hard.
  • Second, other stocks elsewhere look cheaper by comparison. Admittedly, these ‘cheaper’ stocks have poorer accompanying fundamentals such as lower earnings expectations.
  • Third, the monetary easing that many investors are anticipating (ie, multiple rate cuts in 2024) may not unfold at the timeline they envisaged, given the ongoing market rallies and firm economic data. Should rates stay higher for longer, this may dent future returns.

Still, Warren Buffett once opined:  ‘Never bet against America.’ A wise strategy in my opinion. Investors should have some exposure to some US stocks given their positive technical conditions and outlook.

Invesco QQQ ETF


Exchanged-Traded Funds (ETFs) are one of the fastest-growing areas of the financial markets. Investors like them because they are cheap, transparent and offer easy access in terms of coverage. Even sophisticated hedge funds trade ETFs because of their deep liquidity.

Three advantages of investing in ETFs are:

  • Diversification – With just a few ETFs, you can easily diversify your capital across asset classes. In the past, you bought stocks and gilts separately, topped up with a vault full of physical gold coins. Now, you can buy a stock ETF (SPY:US), a bond ETF (BND:US or TLT:US) and a gold ETF (GLD:US) – all in the same account.
  • Overseas markets – can be purchased easily. You can invest in emerging markets (EEM:US) or a single country market (say, China FXI:US) at the click of a button. Or try riskier frontier markets (FM:US)
  • Thematic exposure – is investable now since different securities can be packaged together according to certain characteristics. For example, the recent emergence of the electric vehicle industry resulted in the creation of several EV ETFs (eg DRIV:US). Other thematic ETFs cater to a wide variety of interests, including Cathy Woods’ ARK Innovation (ARKK:US), Global Agriculture (COW:US) or Cloud Computing (SKYY:US). 
  • Short ETFs are available – for more opportunistic traders. One such ETF is the ProShares Ultra Short QQQ (SQQQ), which benefits from a fall in QQQ. Note that these short (or inverse) ETFs are for trading rather than long-term investment.

One of the newest and hottest ETFs in the world is the $3.3 billion iShares Bitcoin ETF (IBIT, factsheet). This recently approved ETF holds spot Bitcoin (akin to the SPDR Gold ETF which holds physical gold) so it tracks the spot Bitcoin prices closely. Needless to say, this fund is extremely volatile due to the sharp spot Bitcoin price action.

You can also use ETF to acquire exposure to other booming developed markets, such as Japan. In February, the Nikkei 225 Index rallied nearer to its all-time high set in 1989. This is a milestone. The ETF to watch include iShares MSCI Japan (EWJ:US) or the Hedged version (HEWJ).

iShares Bitcoin ETF Chart


REIT is the acronym for a Real Estate Investment Trust (REIT). Launched in 2007, REITs have become a significant sector in the UK. You can buy and sell REITs just like any other listed companies on the London Stock Exchange. There are 48 REITs in the LSE (see full list here) – and one of the largest list REITs is Land Securities (LAND).

REITs offer several advantages for ordinary investors:

  • Access – REITs offer investors access to a wide portfolio of commercial and residential properties at a corporate level. REITs have experience and knowledgeable teams to manage properties professionally on your behalf – and save investors the hassle of direct property ownership.
  • Income – REITs offer the prospect of a stable income. Remember that a REIT distributes most of its property-derived income to shareholders.
  • Positioning – You can trade major REITs throughout a trading session. Liquidity is good on a FTSE 100 REIT. Investing £1,000 or half a million in a REIT will earn a proportional amount of income. Unsurprisingly, many pensions and large investors are increasingly reaching to REITs for their dividend yields.

The downside is that REITs’ share prices can fluctuate like any other stock. They can go up or down depending on current supply and demand. Price volatility is higher on REITs than on traditional brick-and-mortar stocks. Lastly, macro conditions will determine the valuation of REITs. High-interest rates are capping the values of property due to the more expensive debt financing.

Land Securities (LAND) Chart


Bonds suffered one of their worst price performances during 2022-2023. The decisive end to the zero interest rate policy (ZIRP) cratered bond prices in 2022/3, which at some point, some noted that US 10-year bonds were on track for ‘worst year since 1788‘. You can see the destruction of bond values on this US Treasury ETF (TLT). From 170 in 2020, the instrument plunged to near 80 just a few years later. In the UK, the performance of long gilts are not that much better either. In 2022, the iShares Long Gilt ETF (IGLT) slumped by nearly a quarter.

Given this bearish backdrop, an important question stares squarely at investors: Are bonds still worth buying at all?

US Treasury ETF (TLT) Chart

Bonds are an essential part of the investment landscape and have an important place in a diverse portfolio. A bond, in a nutshell, is a financial security that pays a fixed amount of income over time (interest). As the debt issuer usually redeems the bonds at the end of the life of a bond (at par value), this given cash flow certainty to debt holders.

During 2020-2024, bond values have plummeted because investors were demanding more interest to lend the same amount of money. This, in turn, is because the central banks have been raising the cost of borrowing due to soaring inflation rates.

In the past, bonds were excellent investments because a) they offered good price stability b) bonds were in a bull market. The latter happened because interest rates kept dropping. Defaults (creditors not redeeming/repaying debt) were low because borrowers could roll over the old debt with new – and often cheaper – debt. This keeps both creditors and borrowers happy.

That benign credit landscape is certainly history. In today’s new stricter rate regime, borrowers have to renew their debt with more expensive ones, often causing more financial distress along the way.

Why, then, should you invest in bonds now? For three reasons:

  1. Interest rates have rocketed. This means investors are compensated for the increased risk. For example, 1-year gilt yields are near 4.85 percent. This is not a bad yield.
  2. Inflation rates are heading lower. This means the real return (nominal minus inflation) from bonds is nearing positive.
  3. Bond prices fluctuate. Astute investors can take advantage of these fluctuations to buy bonds at a cheap price and benefit from any fall in inflation or interest rates.

After a century of cataloguing bond and stock prices, however, researchers have discovered that returns from gilts tend to lag behind that of stocks. Bonds are very useful when you have excess cash and are waiting for good opportunities in the equity market. Occasionally gilt yields offer bargain levels (eg 1980) relative to their risk. When that happens, it could be an opportunity to buy bonds.

Gilt Returns

Source: FT (paywall)

Index Funds

The popularity of buying index funds has increased sharply in recent years. This is a structural growth across the world because investors prefer the ease of investing in index-related products. And they are cheaper too.

In a nutshell, index funds track a particular financial index, such as the most-watched equity index like the S&P 500 or FTSE 100. In the US, the top 3 ETFs (SPY:US, VOO:US, iVV:US) that track the S&P totalled more than $900 billion.

Why are index funds favoured across the world?

  1. Reduces the risk of active management. Many investors prefer the simplicity of just buying a major market index instead of trying to find a ‘star’ fund manager.
  2. Stay invested in the biggest stocks – as major stocks indices undergo regular “reshuffling”. Weak stocks are automatically phased out from the index.
  3. Capture the upside with less transaction costs – it is well known that costs erode long-term return.

Like most assets, index funds are not the panacea to all investment shortcomings. While a major index (sometimes known as ‘blue-chip index) can appear solid, prices can and do drop precipitously occasionally. In 2008, the S&P slumped by more than 40 percent. And there are some index funds that track the more obscure indices. But they are smaller and less popular, and prone to wilder price swings. 

Open Ended Funds

An open-ended fund is known as OEICs in the UK. These are investment schemes that pool capital together under a structure and invest the total capital. Because the number of shares vary over time due to issuance and redemption, it is ‘open ended’. Another benefit is that OEICs are regulated in the UK.

Some investors favour open-ended funds because of a) the high level of fund’s expertise and b) the market it invests in. Perhaps the fund’s prospective return complement what they have already owned.

Investing in these funds carries the same risk as other funds: The value of the fund depends on the performance of the underlying assets.

As a prospective investor, some research about these funds are required:

  • What is the investment goal?
  • What are the charges to manage the fund? (professional managers aren’t cheap these days).
  • Geographical bias and concentration of the portfolio
  • Risk level of the fund,

Until you have clear answers to these questions, you should monitor these funds further before investing.    

Investment Trusts

Investment Trusts (IT) are funds that pooled capital and invest in a structured way. Sponsoring and managing these ITs are big fund management companies such as Fidelity, JP Morgan, Ballie Gifford etc.

Many ITs are closed-ended. This mean that the number of shares of an IT remains static for a period of time (unlike open-end funds). For most ITs, you can readily trade their shares during a business day. But the bid-ask spread will probably vary depending on the size and liquidity of a trust.

Some of the biggest investment trusts have assets under management in the billions. The biggest include the Scottish Mortgage IT (SMT:UK), Smithson IT (SSON:UK),  and Foreign & Colonial IT (FCIT:UK).

Why you should take a look at IT

  • Brilliant fund managers do exist – but they are a rare breed. Scottish Mortgage (SMT) benefitted enormously from the brilliant James Anderson who helped propelled SMT into a FTSE 100 company.
  • Some investment trusts provide diversification – since they can hold a basket of investments and in different asset classes
  • Some investment trusts can outperform the British general market index over a period of time because they invests outside the UK

However, no one should invest in an investment trust until he/she reads the trust’s mandates and its various parameters of investments, include the investment universe, charges and leverage.


Commodity is a popular asset class. Investors found them attractive due to four arguments:
  • Superb returns – especially when you get the timing right. When a commodity shortage occurs, prices can go ballistic over a short period of time.
  • Commodities as Hard Assets – commodities have an important place in portfolio during inflationary periods (like now). Gold is valued near $2,000 for this reason.
  • Secular demand for many commodities – due to the ongoing industrialisation and infrastructure upgrades in many, especially emerging, countries.
  • Diversification – from other asset classes such as bonds, since commodities move differently and are impacted by different factors.

In the past, you could only gain exposure to commodities via physical ownership. Nowadays, you can buy commodities through futures, options, ETFs, spread betting, or through miners.

In the US, $1.6 billion Invesco Commodity ETF (DBC:US, factsheet) is a popular funds amongst investors. It invests in energies, precious metals, agriculture and soft commodities. As noted below, DBC rose strongly in 2021 and 2022 due to soaring oil and agriculture prices.

Within the commodity sector, some commodities will perform differently over time – just like how some equity sectors diverge. In 2022, for example, oil and wheat were a few of the best-performing assets in the world due to the war in Ukraine and geopolitical tensions in the Middle East. In 2024, oil prices are more settled due to a more bearish demand outlook.

The once red-hot Lithium (Global X Lithium, LIT, factsheet) also saw prices crash in the past year because of lower demand from the EV sector. However, having sold off massively, a rebound is not to be ruled out.

Invesco Commodity ETF (DBC:US) Chart

IPOs & New Issues

When companies grow, many of them became public companies which you can buy when they IPO. The process of bringing privately-held companies to the public is called an IPO, short for Initial Public Offerings. Many major companies started their journeys as a small public company and then grew rapidly over time.

In 2021, more than 120 companies chose to list on the London Stock Exchange and raised £16.8 billion. It was a bumper year for the LSE.

What are the advantages of buying into new securities?

  • New exciting sectors. A newly-listed company is often young and dynamic. You can buy into these high-growth companies for a fraction of what they will be worth in the future.
  • Untapped potential. A company uses funds raised from the IPO to invest in new corporate expansion. In time, these investments bring revenue growth.
  • Booming industries. New sectors need funds to grow. That’s why these companies list in public markets to attract more investors. You can get a piece of the action this way.

But like any other investments, the downside of investing in new securities is that these companies are untested. They may or may not survive the next economic downturn. Corporate longevity is unknown.

Another point worth remembering is that IPOs are more vibrant during a bull market when Investors are more receptive to new positive ‘stories’. Ergo, wildly enthusiastic investors overpay for IPOs.

Look at one ETF that invests in IPOs (ticker IPO:US). Its price action succinctly captures the rise and fall of the investor sentiment during the covid boom.

Best IPOs

Emerging Markets

Another major part of a portfolio is investing in emerging markets. These markets are mostly from developing countries such as India, Indonesia or Vietnam. They have only begun their industrialisation process and are still expanding their manufacturing prowess.

Emerging markets as an asset class is still a popular choice, primarily because of:

  • Long-term growth story – especially when we look at countries like India (population=1.4 billion, or Indonesia (population=277 million).
  • Ongoing industrialisation – and sooner or later this will turn into a large fantastic consumer market
  • Volatile pricing – which create opportunities for attentive investors to pick up bargains, es as fear permeates
One of the current hottest EM is India. The story behind India is well known – a large population with a large class of dynamic young workers, cheap labour (at least in comparison to other Asian countries) and an educated English-speaking workforce. The country also benefits from the burgeoning middle class.  Apple, the premium phone marker, has been reporting rising sales in the country. All these factors are feeding into the stock market, as seen from the near-cyclical high iShares MSCI India ETF (INDA:US, factsheet). A GBP-denominated India-based fund is the JP Morgan India Trust (JII).
iShares MSCI India ETF (INDA:US) Chart
Of course, not every EM story is positive. China, for example, is struggling to resuscitate its economy after years (decades even) of strong growth. This is depressing China-related stocks. A quick check on iShares China Large Cap (FXI:US) shows that prices have decimated by 50 percent. Another leg-down is possible, although some state interventions may insert floors on assets.
If you are unsure which country to bet on, perhaps sticking to a broad-based EM ETF may be a more appropriate strategy, such as: Vanguard EM (VWO:US) or iShares Core MSCI EM (IEMG:US).
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