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Investor confidence hits record low: Lloyds

Investor confidence hits record low: Lloyds

Investors’ confidence in the markets has plummeted to its lowest level since Lloyds Bank Investor Sentiment Index started three years ago.

The bank’s monthly figures, which gives a picture on investor sentiment in 10 asset classes, show investor mood has continued to fall following a choppy three months across global markets.

March saw a drop in performance across seven of the 10 asset classes, with gold, UK government bonds bucking the trend.

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UK equities experienced a slight boost in performance, after seeing a huge 18 per cent drop in sentiment in the space of a year.

According to the report, investor confidence across the 10 asset classes fell to -2.26 per cent in March, a fall of 13.5 per cent compared to the same time last year.

Sentiment towards commodities saw the first month-on-month increase since November, rebounding 6.85 per cent, meaning confidence towards commodities outpaced the sentiment towards UK equities for the first time since April 2013.

Markus Stadlmann, chief investment officer at Lloyds Bank Private Banking, said: “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.”

However, he said there are some glimmers of a recovery in the performance of some asset classes, pointing specifically to the switch in sentiment towards gold, which is currently benefiting from being viewed as a safe haven investment during turbulent times.

Net Sentiment, Source: Investor Sentiment Index

 

Net Sentiment March 2015

Net Sentiment  February 2016

Net Sentiment March 2016

Monthly PP Change in Net Sentiment February 2016 – March 2016

Annual PP Change in Net Sentiment March 2015 – March 2016

UK shares

 36.49% 

-2.49%

-8.87%

-38.98%

Eurozone shares

-33.06%

-30.28%

-39.92%

-9.64%

-6.86%

US shares

 17.02%

-0.80%

-0.05%

 0.75%

-17.07%

Japanese shares

-0.79%

-17.05%

-19.43%

-2.38%

-18.64%

Emerging market shares

 16.76%

-5.90%

-1.33%

 4.57%

-18.09%

UK government bonds

20.64%  4.97% 5.00% 0.03%

-15.64%

UK corporate bonds

 17.29% 1.86% 2.42% 0.56%

-14.87%

UK property

 43.42% 48.61% 41.08%

-7.53%

-2.34%

Gold

 26.54% 30.24% 38.75% 8.51% 

Commodities

 13.26%

-8.26%

-1.41%

 6.85%

-14.67%

Average

 15.76% 2.98% 2.26%

-0.71%

-13.50%

Mr Stadlmann warned though that investors should always be wary about becoming too euphoric about certain markets based on short-term returns.

Elsewhere, eurozone shares remain desperately unpopular with a sentiment rating of -39.92 per cent.

katherine.denham@ft.com