The latest Association of Investment Companies (AIC) Investor confidence research has revealed that investors’ optimism is rising to what it was in the pre credit-crunch levels, with investors increasing their stock market exposure to emerging markets as the UK falls out of favour, while taking a risk-on approach to smaller companies.
The research, which used survey data from Morningstar, showed that over half of investors are planning to increase their stock market exposure, reaching the highest level in eight years.
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The feel good factor created by the recent strong performance of the stock market was cited as a reason for rise in investor confidence, as 23% of the survey respondents said that they are increasing their equity exposure as they are more optimistic about the outlook for the stock market.
However, 25% of the survey respondents said that they are looking to increase their exposure since they are tired of the low levels of interest on UK savings accounts.
The survey revealed that UK has dropped to 15%, it’s lowest ever level of popularity amongst investors. Emerging markets was found to be the most favoured region by investors at 23%, followed by Asia Pacific 19%.
Further, the research showed an increase in interest surrounding emerging markets in recent times, with figures from six years ago showing only 6% of investors preferred emerging markets.
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By GlobalDataSmaller companies was found to be the favorite sector with 28% respondents willing to invest in the same, compared to 12% in the previous year; while demand for blue chip companies came down to 15%.
The top risk for investors was found to be the Eurozone crisis at 20%, despite falling from 37% the previous year, followed by stock market crash at 18%; and 10% being concerned about an unraveling of the US economy and another 10% worried over poor returns on cash deposits.
