Investor confidence has fallen to one of its lowest levels since July 2013, according to figures from Lloyds Bank.
This month’s investor sentiment index came out at a level of 4.55 per cent during December.
Only in September last year did the level fall even lower to 3.23 per cent, driven by the initial concerns about the slowing of China’s economy and the impact of currency devaluation.
Net sentiment is a statistic showing the difference between those who hold a positive view and those who hold a negative view each month on the outlook for each type of investment over the next six months. All figures are rounded to the nearest whole number.
The data comes from a 4,621 adult strong YouGov survey, of which 1,152 were investors, undertaken at the start of January.
In December, all 10 asset classes experienced a drop in market performance, compared with the previous month. Commodities lead the way, with another huge fall in perceived performance of 8.6 per cent.
Markus Stadlmann, chief investment officer at Lloyds Bank Private Banking, explained investors are feeling particularly gloomy at the moment, with asset class performance dropping off as we start 2016.
“Given declining market performance and falling levels of sentiment, it is surprising to see sentiment towards bonds also falling.
“But, by sticking to familiar investments like property and gold, some investors might be missing the potential opportunity offered by lower risk fixed income assets such as bonds.”
Only UK property and gold bucked the trend, with small rises in sentiment of 1.88 per cent and 2.04 per cent respectively.
When comparing the year-on-year changes in sentiment, only UK property increased its positive position, with a 12 per cent rise over 12 months, taking it to a high level of more than 50 per cent.
Eurozone equities have also improved levels of sentiment during the last year time, with a rise of 9 per cent, but sentiment towards this asset class remains extremely negative, at around -34 per cent.
Emerging market equities have fallen out of favour. After being regarded positively with a sentiment of 6 per cent in December, confidence levels fell by around 12 per cent this month.
Sentiment towards emerging market equities also fell by around 15 per cent year-on-year, which is the biggest fall across all the asset classes.
Despite their 10.7 per cent growth in actual market performance, Japanese equities are still failing to impress the UK investor, with a sentiment reading of -14.31 per cent, their poorest level since its record low in this survey, also registered in September 2015.
katherine.denham@ft.com
