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Investors most confident in UK asset classes

Over the last year sentiment among private investors has been strongest towards UK asset classes, with shares and property climbing the highest in the first year of the Lloyds Bank Private Banking Investor Sentiment Index.

According to the monthly survey, the net sentiment among investors towards UK property from March 2013 to March 2014 has seen a positive increase of 50 points, from nine per cent in 2013 to 59 per cent this month.
 
Similarly, sentiment towards UK shares has seen an approximate increase of 25 points over the course of the year, from around 16 per cent in March 2013 to over 41 per cent in March 2014.
 
This is compared to US shares, a seven point improvement from last year, Japanese shares, a one point decrease, and emerging market shares, a three point decrease, from this time last year.
 
Sentiment towards gold for the period has more than halved, down 20 points, despite a rise in sentiment of eight-points since January, perhaps on account of gold’s perceived ‘safe haven’ status.
 
Ashish Misra, head of investment policy at Lloyds Bank Private Banking, says: “The rise in shares versus the drop in gold over the past year is very interesting. It signals that investors are actively seeking better performing – but riskier – assets. This shows a strong level of confidence in their choices. The spikes in sentiment in the wake of policy decisions such as the US Federal Reserve postponing QE tapering of its asset purchase programme in September 2013, goes to show how the average private investor is becoming more sophisticated and knowledgeable. With this in mind, it will be interesting to see how the current crisis in Ukraine will affect investors’ sentiment towards Eurozone shares.
 
“This relative movement in net investor sentiment resonates well with our pro-equity, pro-risk strategy positioning that has delivered a good performance for our clients through 2013.”
 
Sentiment towards Eurozone shares is still the lowest of all asset classes at -14 per cent. Japanese shares at -2 per cent is the second lowest. However, the sentiment swing of 22 points from March 2013 to March 2014 makes Eurozone shares the third best performer in terms of absolute shifts in positive percentage increase. The net investor sentiment change for Eurozone shares makes it the strongest relative mover of all assets this month (up nine points), compared to commodities (up five points) and emerging market shares (up four points).

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