Goldman Sachs analyst Sharon Bell and her team produced this excellent chart of who owns what in the FTSE 100:
Unsurprisingly, about half the market is owned by people who live outside the UK. Only a tiny sliver is owned by households or the government, the only two sectors that have a long-term vested interest in the fate of the UK as a place to live.
That poses a risk that investors will look to sell UK stock if the EU Referendum vote on June 23 goes in favour of Brexit, Bell writes:
Of course, there is a difference between the risk of a UK exit from the EU and this actually occurring, and it’s possible the FTSE 100 stocks would move to a discount vs Europe as investors apply a higher risk premium to UK assets. As shown [in the chart] around 50% of UK equities are owned by investors outside the UK.
Although, a Brexit discount may already be priced in, Bell says:
But we cannot be certain about this. Despite all the turbulence around the UK leaving ERM in 1992, we did not see a clear discount for UK stocks. And the FTSE 100 and FTSE 250 outperformed vs Europe strongly afterwards.