Investors’ confidence in financial markets is now at its highest level this year, marking a complete turnaround after the 23 June referendum caused a slide in sentiment.
Lloyds bank, which released its monthly Investor Sentiment Index yesterday (17 August), found that all asset classes except safe havens gold and cash have seen a rise in investor confidence since last month, despite continued market volatility.
In fact, figures show investor sentiment is now at its highest level this year, rising 8.1 per cent.
Gold remains the preferred asset class for most investors, although July saw a drop in sentiment of nearly 12 per cent.
Markus Stadlmann, chief investment officer at Lloyds Private Banking, said this decline suggests investors no longer feel so compelled to shelter in safer investments.
UK government and corporate bonds also rebounded despite remaining in negative territory.
Mr Stadlmann said investor sentiment has bounced back since the EU referendum, adding: “The fact that gold and cash are viewed slightly less favourably reflects this greater confidence in risk assets.
“It is still early in the process, but as the economic data starts to come through, the post-referendum outlook will become clearer for investors.”
He said, for example, if domestic spending falls, it will have an impact on specific companies and sectors.
UK equities and property displayed the biggest increase in sentiment month-on-month, after seeing a large fall in confidence in July, triggered by the EU referendum and the suspension of several large commercial property funds.
Attitudes towards the more risky asset classes have also maintained an upward trajectory, with emerging market equities seeing positive sentiment for the fourth consecutive month.
“At present, UK equities appear to be proving resilient, and generally we are beginning to see more positive news emerge globally,” Mr Stadlman said.
katherine.denham@ft.com
