Mon 18th May '15
Retail investors' appetite for UK assets evaporated this month, as the uncertainty of the election combined with growing demand for other assets such as eurozone shares, according to research published today.
Investors' views dimmed on UK stocks and bonds at the fastest pace since November 2014, a monthly survey by Lloyds showed, even as London-listed shares gained 1.3pc to outperform many other global markets in the month to May 6.
The poll of more than 1,700 investors found that sentiment towards UK stocks has dropped 11 percentage points in the last month and 17 points in a year, although with 26.3pc of net investors positive towards British shares, equities are still viewed more favourably than corporate or government bonds, gold or commodities.
The FTSE All-Share gained 1.4pc in the month before the election, yet the uncertainty of the result prompted some investors including the online discretionary manager Nutmeg switched some assets out of UK shares as they braced for a coalition.
The relief rally on the day after the Conservative victory pushed the All-Share almost 100 points higher.
Investors’ views towards UK property held up slightly better ahead of the election, losing 0.9 percentage points in the month and 12.5 points on last year, and seen as a good investment by a net 26.3pc of those surveyed.
"The results show investor unease due to potential economic and post- election uncertainty in the UK in May," said Ashish Misra at Lloyds Bank Private Banking.
"However, eurozone shares and Japanese shares have displayed positive performances and have gained from the halo effect arising around the outcome of elections in the UK."
The investors polled were 5pp more upbeat about eurozone shares during the month, buoyed by improving stock prices. However, a net 23pc still believe the region's equity markets are a poor place to invest.