Reports
UK Investor Confidence Increases For Third Straight Month In December

Lloyds Private Bank's investor sentiment index tracks the confidence of the UK investor, whilst investigating the popularity of 11 different asset classes.
December saw UK investor confidence increase for the third month in a row, according to the latest sentiment index from Lloyds Private Bank. Investor confidence reached a 12-month-high, rising from 1.1 per cent in December 2016 to 6.4 per cent this year.
Emerging markets top the ranking in total investment returns and
are at a high level of investor optimism. With a total return of
29.3 per cent year to date, emerging markets equities have
achieved an even better performance than equities overall (+19.1
per cent).
Gold is still the most popular asset class, despite a six per
cent drop since last December, from 44.5 per cent to 37.9 per
cent. It did rise by 0.1 per cent from November. Closer to home,
sentiment fares less well, with current readings for UK property
crowned the biggest loser of 2017, dropping from 25.3 per cent
last December, to 14.2 per cent this month. However, this is not
reflective of actual asset class performance, which, while
somewhat volatile across the year, has in fact increased by 9.3
per cent over the past 12 months.
The biggest monthly winner for December is US shares, with
confidence rising 5.8 per cent to 5.0 per cent. The latest uplift
coincides with a steady improvement in readings over the year
which increased by 12.0 per cent in sentiment and 22.2 per cent
in performance year to date. While confidence in UK shares
remained somewhat stagnant, with a small dip of 0.6 per cent for
the month, sentiment towards other UK asset classes has improved
somewhat, with decreased pessimism for UK government bonds (3.25
per cent increase, now standing at -2.48 per cent) and UK
corporate bonds (1.51 per cent increase, now standing at -3.65
per cent) this month.
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,” said Markus Stadlmann, chief investment officer at
Lloyds Private Bank. “We have consistently referenced Emerging
Markets 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."
Stadlmann added: “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.