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EFM picks UK for investment

Edinburgh Fund Managers is weighing in to the debate on where to invest this year with a new guide outlining reasons for investing in the UK.

The guide is the third in a series of factsheets from EFM tracking how UK blue-chip stocks have fared over the past five years and drawing conclusions about what this means for investors.

It points out that in 1997 the top 10 stocks in the FTSE All Share accounted for 28.6 per cent of the UK index while today they account for 45.6 per cent.

BP was top of the table five years ago and still is today, the difference being that it now accounts for 9.5 per cent of the UK market while five years ago it was only 4 per cent.

EFM head of UK equities Robert Waugh says this information is handy for investors as it shows that if they are buying the market through a UK tracker fund, 9.5 per cent of their holding would be inves-ted in one company.

Other features of the factsheet, which will be aimed at EFM&#39s existing clients as well as distributed to IFAs, are 10 facts to remember when investing in the UK.

They include the importance of diversifying a portfolio, the fact that all the top 10 stocks have gone through a mega-merger of some variety over the last five years and, because of this M&A activity, how it is difficult to predict who will be in the top 10 in 2007.

Details are al;so included about the fund manager&#39s flagship investment trust, the Edinburgh investment trust managed by Waugh.

Waugh says: “The UK looks fine from an economic perspective, there is not the same debt as in the US and there look to be signs of recovery, unlike continental Europe.”

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