At odds with the recently published Hargreaves Lansdown Investor Confidence Index, which showed confidence hit an all-time low this year, the Lloyds UK investor confidence measure has risen from 1.1% in December 2016 to 6.4% this year. This was assisted by consecutive rises in sentiment in the last three months of the year.
Year on year, the biggest change in sentiment towards a region has been towards eurozone shares, with net sentiment rising from -39.7% in December 2016 to -4.0% in December this year, an annual swing of 35.7%.
Going the other way sentiment towards UK equites fell 3% over 12 months, from 6.9% to 3.9%, while confidence in UK property also dipped from 25.3% in December last year to 11.4%, a change of 11.1%.
With a net sentiment reading of 37.8%, gold remains the most popular asset class among investors, followed by emerging market equities (20.9%).
However, according to Lloyds the biggest monthly winner in December were US shares, where confidence jumped from -0.7% in November to 5.1% in December, a monthly change of 5.8%.
It said this uplift coincides with a steady improvement in readings over the year, thanks largely to a 22.2% rise in performance in the region.
“In a year with so much uncertainty and strong performance by equity markets across the globe, it’s intriguing to see that UK investors feel more optimistic now than they did this time last year,” commented Markus Stadlmann, chief investment officer at Lloyds Private Bank.
“We have consistently referenced emerging market shares as the standout ‘turnaround story’ of the year and they are not only much improved in terms of investor sentiment, but also the best performance return – the other stellar performers being Japanese and US shares.
“Our economic and financial markets outlook is positive for a limited number of asset classes. Then again, we will de-emphasise quite a few investments which were pillars of our success in previous years.
“2018 could prove to be an important year for identifying potential turning points in the investment cycle.”
