While returns from UK equities are attractive over the medium term, it would be expecting a lot for them to exceed the returns delivered over the last three years, according to analysis published today by the global fund manager, Standard Life Investments

To enhance future returns, investors could diversify overseas, in order to benefit from stronger earnings growth from equities and lower inflation for bonds than is likely from the UK.

In its quarterly investment review Standard Life Investments has examined the benefits of overseas investing for a UK based investor. In particular, it discusses how investors can navigate the forces of globalisation and considers valuation differences across a range of assets, as well as the corporate earnings and inflation outlook.

Richard Batty, Global Investment Strategist at Standard Life Investments, said:

“While the investment rationale for investing in overseas equity and bond markets compared to the UK looks worthy of further analysis… UK based investors need to negotiate a number of issues including currency volatility and the cost and range of hedging.”