How Much Impact Does the UK Prime Minister Have on Your Investments?

As an investor, you might wonder how the occupant of 10 Downing Street influences the direction of your investment portfolio. It's a common question: does the UK Prime Minister's identity matter to market performance?

Thankfully, regardless of who has won the latest election, decades of returns show that equity investments have trended upward.

The chart below shows the growth of £1 invested in the UK market over almost 70 years and 17 prime ministers (from Winston Churchill’s final months to Rishi Sunak). You can see that over the long run, the market has provided substantial returns regardless of who’s in charge.

That’s because shareholders are investing in the Great Companies of the World, which focus on serving their customers and growing their businesses, no matter who’s at the top.

Prime ministers may have an impact on market returns, but so do many other factors—the actions of foreign leaders, interest rate movements, changing oil prices and technological advances, to name a few.

The bigger picture is that equity investments have rewarded disciplined investors over time—regardless of who has won the latest high-profile elections.