A monthly poll tracking UK investor sentiment slid to its lowest point in over two and a half years.

Investor sentiment has fallen to 2.98 per cent, its lowest level since May 2013, amid continued market turbulence, according to a survey of 4,933 UK adults by Lloyds Private Banking.

Attitudes towards UK equities were of particular concern as sentiment here plunged by over 6 percentage points from January to 6.38 per cent in February, marking its lowest level since the index began in March 2013.

Both UK and US equities also experienced their biggest ever year-on-year falls in February, with sentiment towards these two asset classes falling by 22.73 per cent and 18.31 per cent respectively.

The dismal mood appeared to be justified by actual market performance over the past month, which saw UK, eurozone, US, Japanese and emerging market equities decline between 5.8 per cent and 8.6 per cent. 

“As the trend of ‘growth’ investing dissipates, we may now be entering a period where investors have a preference for sectors with more predictable earnings. Now more than ever, identifying buying opportunities in the equity market requires a deep understanding of company valuations and how markets work,” said Markus Stadlmann, chief investment officer at Lloyds Bank Private Banking.

“What’s more, both the understanding of risk, and the appetite for it have changed. It is notable that some investors seem to be adopting an increasingly negative attitude...towards lower risk assets, such as government bonds, which have seen performance improve in the last month. This shows the current levels of uncertainty among investors.”

There was a clear flight to safety as gold overtook UK equities to become the second most favourable asset class after UK property. Actual market performance of the precious metal was up 4.5 per cent from last month while that of UK government bonds was up 2.2 per cent. These were the only two asset classes to record an improved performance from January.