Eurozone shares have had the largest annual decline in sentiment on record, dropping 19 percentage points in just a month.
New figures from Lloyds show investors’ sentiment for Eurozone shares have crashed to -48 per cent, down 30 percentage points over the past year. Ashish Misra, head of portfolio specialists at Lloyds, said the drop was unsurprising:
We are witnessing a classic response from investors during this dramatic time in the Eurozone.
Analysts suggest political turbulence in the Eurozone has caused investors to flee to safer options:
While riskier assets, such as Eurozone shares go down due to the economic uncertainty, ‘safe haven’ assets such as gold and UK government bonds increase due to their flight-to-safety behaviour typical of investors in such market conditions.
The strongest asset class remains UK property at 47 per cent, but investor sentiment is declining here too, with the class dropping 8 percentage points over the period.
UK government bonds are the only asset class to see investor sentiment rise over the time period, albeit with a decidedly careful 0.4 per cent rise.