You are here: Home - Investing - Experienced Investor - News -

Investor confidence on UK fixed income assets turns negative

Written by: Paloma Kubiak
Investor sentiment has fallen to another record low despite recovery in market performance of all but one of the asset classes, an index reveals.

Latest figures from the Lloyds Bank Investor Sentiment Index which compares the outlook for each type of investment over the next half year, show investor confidence dipped to a record low for the second month in a row.

This is despite recoveries in the market performance of equity asset classes, property and commodities.

The index revealed that sentiment on UK fixed income assets turned negative while confidence in Japanese equities saw the biggest improvement in April, up almost 8%.

This may be a delayed response following the Bank of Japan’s decision in early February to join other central banks in negative interest rate territory.

UK government bonds and UK corporate bonds were the two biggest fallers when it came to changes in monthly investor sentiment (-5.90% and -4.88% respectively).

Lloyds said investor confidence may have been impacted last month by the surprise European Central Bank (ECB) move to cut its main interest rate to 0% from 0.05% and with growth in the UK slowing, the forecast for domestic product growth for 2016 was revised down from 2.4% to 2%.

But despite the negative sentiment, there has been a rebound in the actual market performance of all but one of the asset classes, which suggests the views lag behind the markets.

Markus Stadlmann, chief investment officer at Lloyds Bank private banking, said: “While investors’ attitudes to UK equities improved notably this month, we have seen sentiment slip in other asset classes.

“This is led by attitudes towards domestic bonds going from positive to negative. Gold has certainly lost a little lustre, with a drop in positivity, and UK property has also been knocked down a little.

“We can see that investor sentiment does not simply follow market performance, but is influenced by a combination of market movements, economic news and behavioural biases. The perception of economic data is currently so depressed, meaning that small improvements or surprise changes in economic statistics, which are always closely followed, can have a huge positive impact, potentially disproportionately.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week