- At the start of September two of the three top-performing asset classes in terms of consumer confidence were Sterling-denominated, according to the monthly Lloyds Bank Private Banking Investor Sentiment Index. UK Property is now reading a net positive sentiment score of 38 percent and UK Shares are at 33 percent. This compares to Emerging Markets, a distant third-largest in terms of asset class consumer confidence, at 16 percent. In addition, UK Government Bonds have seen the biggest year-on-year increase with an 11 percentage point swing, while UK shares benefitted from a nine percentage point positive swing.
- Lloyds Banking Group
- UK Property and UK Shares are investors top performing asset classes, followed by Emerging Market Shares
- UK Government Bonds has seen the biggest year on year increase, rising 11 percentage points
- Eurozone Shares have seen the biggest monthly decline, dropping over seven percentage months from August
This positive change in investor sentiment can very likely be attributed to the recovery of the UK economy over the past 12 months, the outlook and perception of which has changed dramatically over the last several months.
Despite still remaining the overall highest-scoring asset class at 38 percent, the survey showed net sentiment1 around UK property dropped again in September, down a further three percentage points from last month. In line with predictions from some commentators, the drop in sentiment reflects a property market that is flattening out and stabilising throughout the UK.
According to the monthly survey, the net sentiment amongst investors in the Eurozone saw the largest drop, falling seven percentage points to an overall net sentiment of -28 percent. This swing in sentiment shows that investors still hold a persistently weak view of Eurozone shares – perhaps unsurprising given the mix in market conditions – and is only one of two asset classes that is viewed negatively on a net sentiment basis by surveyed investors, with Japanese Shares at -1% this month.
Commenting on the latest Investor Sentiment Index, Ashish Misra, Head of Investment Policy at Lloyds Bank Private Banking, said:
“The UK has seen a significant step change in investor sentiment as we are now seeing that UK assets are some of the top-scoring classes for investors. This change can be attributed to a far more positive outlook for UK GDP growth as well as the recovery of the UK economy as a whole that we have witnessed, particularly in the last 12 months or so. While we have continued to see a month-on-month decrease in UK property, this still continues to be the highest-scoring asset class in our universe and reflects a more stable housing market across the UK.
Despite the fourth consecutive month of decline in overall sentiment, the net score remains positive with a three percentage point increase year-on-year. This indicates that, despite all the geo-political and macro-economic uncertainty that has visited financial markets over the summer, investors are still holding their nerve in terms of staying invested.”
While the overall figures across asset classes has seen a two percentage point dip from last month, the overall average net sentiment figure of 12 percent is a three percentage point improvement on the corresponding figure from this time last year.