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

Investor survey: confidence in UK shares hits all-time low

Written by:
Investor confidence has hit rock bottom, with sentiment towards UK shares turning negative for the first time on record, a poll has revealed.

According to the monthly survey by Lloyds Private Bank, this is the third consecutive month of falling sentiment and the mood among investors is now at its lowest level since records began in March 2013.

When looking at the actual market performance of ten asset classes, it is easy to see why sentiment continues to drop.

March saw declining performance across seven of the ten asset classes. Unsurprisingly, gold and UK government bonds bucked this trend, with UK equities seeing a slight month-on-month increase.

The overall fall in sentiment was driven by a huge shift in feeling towards UK equities which, for the first time since the survey began, has become negative (now at -2% in March compared with 36% a year ago).

Historically, UK shares have been one of the most highly regarded of the ten asset classes as far as investors are concerned, Lloyds said.

This fall contrasts slightly with the actual market performance of UK equities, which nudged up by 0.3% month-on-month, but the survey has shown sentiment tends to take a while to recover from bad news.

Perception of commodities improved in March, the first month-on-month increase since November, rebounding by 6.8%. This has taken overall sentiment towards commodities higher than sentiment towards UK equities for the first time since April 2013. This reflects the huge year-on-year sentiment drop towards UK equities, but also shows an improving picture for commodities, perhaps suggesting the bottom of this market may be drawing closer.

Markus Stadlmann, chief investment officer at Lloyds Bank Private Banking, said: “The first ever move to negative sentiment towards UK equities is potentially significant. Investors tend to focus most of their efforts on domestic markets, so a negative view of the UK equity market suggests an increasingly dour view overall, which is reinforced by the Index dropping to its lowest ever level.

“At the same time, we are seeing some glimmers of a recovery in the performance of some asset classes, suggesting that broad sentiment may lag the markets in some areas. Positive sentiment towards gold is increasing sharply as performance recovers well, but investors should always be wary about becoming too euphoric about certain markets based on short-term returns.

“Interestingly, commodities are seeing some recovery in positive sentiment and this may reflect the notion that this asset class may be reaching recovery mode in the short term. We certainly see commodities stabilising and have a more positive view as a result. As the EU referendum edges closer, talk of increased market volatility may have an impact on overall investor sentiment over the coming months.”

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.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

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.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • @YourMoneyUK All you need to know about the latest Current Account Switching winners and losers - hats off to Starl…
  • RT @WeareJust_PR: Many people struggling to make ends meet may not realise they are entitled to financial help or find the system too confu…
  • RT @WeareJust_PR: Many people struggling to make ends meet may not realise they are entitled to financial help or find the system too confu…

Read previous post:
New Tax-Free Childcare scheme: 10 things you need to know

Two million households will be eligible for the government’s Tax-Free Childcare scheme. Further details of the scheme were unveiled in...