The monthly Lloyds Bank Private Banking Investor Sentiment Index showed bleak asset class sentiment in the beginning of 2015.

The monthly Lloyds Bank Private Banking Investor Sentiment Index showed gloomy sentiment about a number of asset classes at the start of this year, although there are bright spots amid a general decline in confidence.

There was a gain in confidence in five of the ten major asset classes covered in the survey, and a fall in confidence in the other five, creating a modest overall decline. This pulled the average sentiment score down to its lowest level since the survey's launch in December 2013.

Emerging market equities came out as the biggest loser in net sentiment this month, falling by 7 per cent compared to December. Also suffering investor pessimism were eurozone shares, recording a net sentiment of -42.8 per cent. Sentiment towards UK shares also waned 5.8 per cent from last month while US shares saw a slight rise.

Meanwhile, gold improved the most in net sentiment since the beginning of January 2014, increasing 29.1 per cent. Investors remained optimistic about gold this month too – the asset class recorded the largest positive month-on-month gain with a 6.5 per cent climb.

“Gold has seemingly been boosted due to mounting concerns regarding the global economic outlook. Increasing uncertainty about the prospects for both the eurozone and emerging markets appear to have adversely affected sentiment towards equities in these areas,” said Ashish Misra from the wealth investment office at Lloyds Bank Private Banking.

Over the last year, seven of the ten asset classes have recorded a fall in net sentiment. These were led by commodities but Japanese equities also fell by 26 per cent, European equities by 22 per cent and finally, UK shares by 17 per cent.

As the Chinese economy slowed and oil prices fell in 2014, commodity prices did too. The survey found commodities (down 33 per cent), eurozone equities (-10 per cent) and emerging market equities (-10 per cent) to be the worst asset class performers in terms of investor confidence in 2014.

UK property, however, was on top recording a rise of 17.2 per cent over 2014. Close behind, with a rise of 12.9 per cent between the end of 2013 and the end of 2014, was UK government bond performance. 

“Two sterling denominated assets – UK government bonds and UK property – fared best as they were boosted by the improving performance of the UK economy,” said Misra.

January's overall slump in investor sentiment marks the sixth negative monthly change in the average sentiment score in the past eight months.

A total sample size of 4,486 adults was used for the Lloyds Bank Private Banking Investor Sentiment Index– of which 1,167 were investors. Fieldwork was undertaken 27 November – 1 December 2014.