Investor confidence in the UK has risen slightly in May 2016 since last month’s record low reflecting, in part, an improvement in the actual market performance of all but two of the asset classes, according to the latest Lloyds Bank Private Banking Investor Sentiment Index.
On the whole, ongoing nervousness in the markets has contributed to a continued cautious response from investors, the bank said. Gold, the price of which is at a 21 month high, and UK property remain high on the investors’ investment agenda.
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Investor sentiment on commodities turned positive for the first time since November 2015.
Ongoing volatility in sentiment towards emerging market equities also continued, as this asset class saw a positive swing of 4.39%.
However, despite an improved picture, investor sentiment was more negative towards the more unfamiliar and riskier asset classes, regardless of their performance.
The report says that investors seem to have little confidence in UK government bonds and UK corporate bonds at the moment, whilst Eurozone and Japanese equities have the lowest confidence ratings across the board. US equities also now crept into negative territory.
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By GlobalDataLloyds Private Banking CIO Markus Stadlmann said: "Investor sentiment has become more positive for most asset classes, albeit from a low base. There are growing reservations about investing more money in equities, with the exception of emerging markets. UK Gilt and corporate bond sentiment has fallen considerably, which probably reflects concerns about whether they can deliver positive returns in the future.
"Although they remain popular with investors, the safe haven assets of gold and domestic property have both seen a slight fall in sentiment over the last few weeks. Commodities and emerging markets have both seen improvements in sentiment, a reflection that perhaps UK investors think both of these asset classes are over the worst.
"Whilst we monitor monthly sentiment changes – we stand by our long term approach to investing and exercise a strategic approach that helps clients avoid short-termism."
