UK investor sentiment has reached its highest level in over a year, despite geopolitical uncertainties, this month’s Lloyds Private Bank survey shows.
The UK bank’s investor sentiment index shows appetite towards investments has increased 6.23 per cent on last year to 6.66 per cent this month and 2.42 per cent more than a month ago.
In particular, investors preferred UK corporate bonds and UK government bonds with sentiment increasing 3.17 per cent and 2.63 per cent respectively.
However, only UK equities experienced a slight dip in sentiment despite a bullish outlook, scoring 8.68 per cent in May, own from 9.06 per cent.
Emerging markets, which was the second most popular choice with UK investors in April, saw the biggest decline in sentiment from 18.77 per cent to 16.75 per cent.
Meanwhile, US equities rebounded from negative sentiment levels in April to reach 6.38 per cent this month, up from -0.38 per cent.
Lloyds Private Bank chief investment officer Markus Stadlmann says: “This month’s data suggests that things continue to look up. The month of May returns the highest investor confidence in over a year and, in line with this, we remain positive about the health of the UK economy.“In this context, the story we see playing out with global equities is particularly interesting. I am not surprised to note the big rises in confidence for Japanese and emerging market shares that have been recorded over the course of 12 months.”
Stadlmann argues global equities will be the main “performance engine” for those customers who have portfolios made up of a diverse range of asset classes, on a long-term basis. Over the short term, however, he sees the US equities uptrend flattening out, possibly with a correction.