Significant fall in investor sentiment

Survey1Investor sentiment has dropped to its lowest level since at least May 2013 due to fears about China’s economy, but there are just about more investors with a positive outlook than negative, a survey suggests.

Although the Lloyds Bank Private Banking Investor Sentiment Index has only been going since March 2013, it has recorded the largest fall in monthly investor sentiment since then.

Overall investor sentiment for September is positive, at 3% more investors with a positive outlook – though this is still nine percentage points lower than the same time last year.

Sentiment towards UK equities in particular has fallen by a record monthly amount.

Ashish Misra, head of portfolio specialists at Lloyds Bank Private Banking, says: “Although it is still marginally positive, investor sentiment has this month taken a massive step backwards driven by concerns about the unfolding trajectory of economic activity in China.”

Concerns about the slowdown of China’s economy and the impact of currency devaluation have driven significant month-on-month declines in confidence towards a number of asset classes.

Emerging market equities’ sentiment has declined by 20 percentage points; UK equities have experienced a drop of 18; commodities’ sentiment has fallen by 15; and Japanese equities’ sentiment has fallen by 14.
UK property is the most appealing asset for investors, with sentiment at a positive 48%.

Sentiment towards Eurozone equities has also bucked the overall downward trend to see a positive increase of seven percentage points. This may be driven in part by the European Central Bank’s continued quantitative easing programme and a weaker euro.

The survey records investors’ views according to their outlook for each type of investment over the next six months.

©2015 funds europe