Investor feel-good factor made a return in October - Lloyds Bank

Billy Bambrough
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Investor sentiment towards Japanese equities and emerging market equities in particular improved (Source: Getty)

Investor confidence picked up in October, according to research from Lloyds Bank.

There was an improvement in eight out of 10 asset classes, although safe havens gold and UK government bonds saw a surprise dip in sentiment despite having the strongest performances.

Overall investor net sentiment rose by four percentage points, taking it to an average of seven per cent, the Lloyds Private Banking Investor Sentiment Index showed. However, this is still eight percentage points lower than this time last year.

The greatest improvements in sentiment in October were towards Japanese equities and emerging market equities, both of which saw a rise of seven percentage points.

In September concerns about the slowing of China’s economy contributed to sentiment towards eight out of ten asset classes seeing month-on-month declines.

Ashish Misra, head of portfolio specialists at Lloyds Bank Private Banking, said: “With the US Federal Reserve not raising interest rates in September, and ongoing concerns over China, there is still much uncertainty in the global economy.

“It is encouraging to see investor sentiment increase however, and the strength of the sterling denominated asset classes which continue to keep levels of sentiment in positive territory,” she added.

UK property has continued to record standout gains, surging a further six percentage points in October, bringing sentiment to 53 per cent.

The next highest, UK equities, languishes at 24 per cent. Over the last three months asset performance has been muted, with seven out of the 10 asset classes recording a fall in returns earned, with commodities (-18.4 per cent) and Japanese shares (-11.5 per cent) seeing the biggest declines.

However, a steady flow of London flotations are returning after a arid summer. McCarthy and Stone, which builds retirement housing across the UK, has announced its intention to float in London next month to raise £70m to support its expansion plans, while share registrar Equiniti recently set its price range for an upcoming IPO to raise £315m.

UK Government bonds lead the way in terms of the largest growth rate (four per cent), followed by UK property (2.4 per cent).

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