Now may be a good time to invest in UK asset classes as investor confidence in UK Shares and UK Government Bonds saw the biggest year-on-year increases, up 11 and 14 percentage points respectively, according to the Lloyds Bank Private Banking Investor Sentiment Index.
This year-on-year increase sees UK shares sitting at 38 percent, which is now the second highest performing asset class.
Despite remaining the overall highest-scoring asset class at 41 percent, the survey showed net sentiment1 around UK property dropped for the third consecutive month in August, down a further five percentage points from last month. The fall in UK Property has narrowed the gap in investor sentiment between UK Property and UK Shares as the highest performing asset classes. In line with market predictions, the drop in sentiment reflects a property market that is stabilising throughout the UK.
Sentiment towards emerging markets saw the largest drop in the month, falling -7 percentage points to an overall net sentiment1 of 11 percent.
According to the monthly survey, the net sentiment among investors in the Eurozone dipped three percentage points in confidence, falling back to -21 percent, despite being the highest performing asset class in July. This swing in sentiment means that Eurozone shares continue to be the only asset class that is viewed negatively on a net sentiment basis by surveyed investors.
Gold continues its upward trend for the third consecutive month, as the most positive asset class performer with a two percentage point increase at 24 percent in August, rising four percentage points since June, UK Government Bonds saw the biggest year on year increase, up 14 percentage points, which suggests both these asset classes could be perceived as ‘safe havens’
Commenting on the latest Investor Sentiment Index, Ashish Misra, Head of Investment Policy at Lloyds Bank Private Banking, said:
"The large increases seen in UK asset classes over the past 12 months are a positive sign that there is a significant increase in sentiment towards a recovering UK economy. While we have continued to see a month-on-month decrease in UK property, this could be a reflection on the market as this drop reflects a stabilising market across the UK. The consecutive increase in Gold alongside the strength in Government Bonds could be viewed as ‘safe haven’ investments given the mix in market conditions across Europe.
Overall, and the third straight month of decline in overall sentiment notwithstanding, the net score remains firmly positive and current short-term trends indicate a moderation, rather than any strong reversal, in investor sentiment."
While the overall figures across asset classes remain relatively stable, the overall average net sentiment figure of 14 percent is a four percentage point improvement on the corresponding figure from this time last year.