The UK investor mood has gone from bad to worse in April, hitting an all-time low despite the improved market performance of most asset classes, according to the monthly poll.

Investor sentiment in the UK has fallen to another record low this month even though the market performance of equity asset classes, property and commodities picked up, according to the Lloyds Bank Investor Sentiment Index.

The bank pointed towards the European Central Bank's surprise move to cut its main interest rate from 0.05 per cent to 0 per cent as a possible driver for the decline. In addition, the 2016 UK Budget indicated that the rate of growth of the UK economy was slowing, with the forecast for gross domestic product growth for this year being revised down from 2.4 per cent to 2 per cent.

Attitudes towards UK government bonds and UK corporate bonds soured the most (-5.9 per cent and -4.88 per cent respectively). Japanese equities, however, saw the greatest positive change in attitude, jumping 7.94 percentage points to -11.49 per cent. Lloyds noted this may well be a delayed response following the Bank of Japan’s decision in early February to enter negative interest rate territory.

The mismatch between sentiment and actual market performance was clear, with UK government bonds (-0.7 per cent) being the only asset class to see month-on-month declines in market performance. Meanwhile, emerging market equities and commodities saw market performance jump by 6.9 per cent and 4.9 per cent respectively despite a continued negative perception from investors.

“Whilst investors’ attitudes to UK equities improved notably this month [up 4.67 per cent], we have seen sentiment slip in other asset classes. This is led by attitudes towards domestic bonds going from positive to negative. Gold has certainly lost a little lustre, with a drop in positivity, and UK property has also been knocked down a little,” said Markus Stadlmann, chief investment officer at Lloyds Bank Private Banking.

“We can see that investor sentiment does not simply follow market performance, but is influenced by a combination of market movements, economic news and behavioral biases. The perception of economic data is currently so depressed, meaning that small improvements or surprise changes in economic statistics, which are always closely followed, can have a huge positive impact, potentially disproportionately.”

The survey's sample size was 4,295 adults in the UK, of which 1,080 were investors.