InvestmentsMay 15 2013

Schroders survey shows rise in UK investor confidence

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ByBradley Gerrard

One in three UK investors is planning to increase the amount they invest in the next 12 months with an average increase of 4 per cent compared to last year, according to Schroders.

The company, which has conducted its Global Investment Trends report, said 37 per cent of the 1,008 UK investors surveyed said they were planning to invest more.

The trend by investors comes as 41 per cent of UK investors surveyed said they were more confident about investment opportunities in 2013 with more than half (56 per cent) saying they think equities offer the greatest growth potential.

This compared with just 16 per cent of UK investors who are looking to invest in fixed income assets in the next 12 months.

However, in spite of their bias towards equities, Schroders said there was a “fundamental disconnect” as just 15 per cent of investors said they would invest their own money in the Asia Pacific region in spite of 57 per cent saying it was the engine for investment growth.

In addition, more than half of UK investors (55 per cent) said they were looking to achieve long-term capital growth and income generation from their investments.

But those polled said they intended to place half of their new and re-invested funds in 2013 into low-risk, low-return assets, with just 12 per cent of funds allocated to higher-risk, higher-return investments.

Elsewhere, the greatest investment concern for UK investors is the ongoing eurozone debt crisis, with 67 per cent saying it was an issue followed by a weak economic recovery (51 per cent).

Robin Stoakley, head of UK intermediary at Schroders, said UK investors recognise investment opportunities are good as stockmarkets globally had shown strong growth and the FTSE has recovered the losses it suffered in 2008, growing 11 per cent already this year.

“As a result the trend to switch into equities and out of bonds is set to continue this year but UK investors risk missing other growth opportunities by keeping large sums of money in cash-based savings, particularly given that interest rates remain at record lows and show no signs of rising anytime soon,” Mr Stoakley said.

“Equally while investors understand they need to gain exposure to global, particularly emerging markets assets if they are to maximise growth potential, many remain cautious when it comes to committing their own money to these assets.

“This paints a mixed picture for UK investors. On the one hand they are seeing growth opportunities in UK, emerging markets and Asia but on the other they remain overweight in cash and are potentially failing to capitalise on improving economic conditions.”