Investors are becoming increasingly bullish on UK equities, with confidence in UK equities rising 7.95 per cent to 23.48 per cent in March, an increase of 25.97 per cent year on year, according to the Lloyds Bank Investor Sentiment Index.
However overall investment sentiment dropped slightly in March, falling 0.29 per cent to 5.89 per cent, although this is still the second highest level since April 2016.
Markus Stadlmann, CIO, Lloyds Private Bank, says: “The announcement of a £60bn UK Brexit fund to steady the economy during Brexit negotiations seems to be having the desired effect of reassuring investors, at least in the short term.”
US equities are also back in favour, with investment sentiment rising to 0.51 per cent in March from -5.09 per cent in February while conversely UK Government bonds saw the biggest drop in confidence, with sentiment falling 4.61 per cent to 5 per cent.
Gold remains the most popular asset class, with sentiment levels at 41.93 per cent, although this is 4.44 per cent lower than in February.
All asset classes recorded positive performance over one, three and 12 months, with UK property the best performer, up 6.5 per cent, followed by gold (up 3.5 per cent) and US equities (up 3.5 per cent).
Stadlmann adds: “Investors remain largely undeterred by geopolitical uncertainty both in the UK and in the US, demonstrating renewed positivity towards both countries’ equity markets. The fact that UK property is the best performing asset class is indicative of the growing belief in national economic resilience, come what may.
“Given high valuation readings we are underwhelmed by US equities, despite general optimism. Investor scepticism towards UK bonds is interesting to note. Lack of confidence in fixed interest assets is increasingly based on structural dynamics as well as rising import prices.”