Investor sentiment has recovered in the last month, up 0.49% to 4.27% but investors are still piling into cash (up 10.81%) in the face of geopolitical uncertainty.

According to the latest Lloyds Bank Investor Sentiment Index (ISI), the second biggest increase between September and October was in emerging market shares (up 2.80%).

Gold, a safe haven asset, saw sentiment rise by 0.78% to 44.39% and although a small increase, Lloyds considers anything near or over 40% to be “extreme”.

While Eurozone equities returned a lower sentiment score compared to September, it is still up 33.75% while performance is up 26.90% over the past 12 months. Lloyds said the recent and various elections held across Europe had little effect on investors’ appetite.

Closer to home, it was a month to forget for all four UK asset classes. UK property was down 2.33%, corporate bonds were down 1.92%, gilts were down 1.13% and sentiment for UK shares fell 1.04%. In terms of performance, UK government bonds were down 5% while corporate bonds were down 4.9%.

US shares saw the biggest drop in sentiment in October, down 2.45%, their lowest point since February this year.

Markus Stadlmann, chief investment officer at Lloyds Private Banking, said: “The ‘yo-yo’ nature of our tracker this year may well be eye-catching but the bigger story is that despite all the mounting geopolitical ‘noise’ out there, sentiment is actually higher now than at this time last year.

“While it’s still too early to call, it is looking increasingly likely that the ISI ‘success story’ for 2017 will be Eurozone equities. Despite a small drop in popularity this month, the overall sentiment recovery (versus 2016) and the performance returns of Eurozone equities (in 2017), has been incredible to watch. The opposite is true for UK assets, which collectively leave room for improvement.

“The core message for this month? Short term tricks shouldn’t distract you from aiming for longer term treats.”