Overall investor sentiment increased 5.67%, up from a gloomy 1.12% in December 2016, with UK shares showing the biggest month-on-month jump in the ISI, up 14.58% to more than 21%.
The boost for UK shares reflects the return on the FTSE to all-time highs north of 7000, while an 8.89% rise in sentiment towards US shares has been attributed by Lloyds Bank to the Trump rally at the end of 2016.
However, gold suffered from the increased optimism to riskier asset classes in January and was the only area to see a fall, down 3.68% since December.
Marcus Stadlmann, chief investment officer at Lloyds Private Banking, said: “Investment performance continued to be strong for risk assets at the beginning of 2017, apart from gold, as did investor sentiment signalling that investor confidence is making further progress.Gold continues to be popular with investors, as the Lloyds Investor Sentiment Index shows, despite suffering on financial markets lately.”
“The ISI indicates that UK investor optimism towards US shares is not unusually high, contrasting with extremely buoyant sentiment on the other side of the Atlantic. We would therefore expect to see US equities underperform relative to the MSCI World Index even in the near-term.”
