For the start of October, the Japanese shares asset class was the only asset class to display a negative month-on-month performance, falling four percentage points to -3.0 per cent, according to the monthly Lloyds Bank Private Banking Investor Sentiment Index.
The asset class is only one of two classes with a net negative sentiment score based on responses by surveyed investors. The other is Eurozone shares, which, despite the positive month-on-month change, still sits at -26 per cent.
October also broke four successive months of decline as the overall average change across all asset classes reached three per cent, the largest month-on-month increase seen since this time last year.
While two of the three top-performing asset classes in terms of net sentiment are still Sterling-denominated, gold has maintained a steady net sentiment trend and comes in this month in third place – behind UK property and UK equities asset classes – rising one percentage point.
UK property has strengthened its position as the top-performing asset class, bringing an end to the four-month decline as it climbs eight percentage points to 45 per cent net sentiment. In line with predictions from commentators, the lift in UK property’s sentiment score shows that the flattening out of the market is a key driver for investors as the market continues to stabilise throughout the UK.
In addition, Japanese shares have seen the biggest year-on-year decrease with a -8.0 percentage point swing, while emerging markets net sentiment remained virtually unchanged year-on-year.
According to the monthly survey, the net sentiment amongst investors in the US saw the largest increase, rising 10 percentage points to an overall net sentiment of 13 per cent. This swing in sentiment shows that investors view of US shares is now picking up, reflecting the strong jump in sentiment following five straight months of decline.
Ashish Misra, head of investment policy at Lloyds Bank Private Banking, says: “Gold has continued to be an interesting asset class to watch, as a gently rising investor net sentiment score towards the asset class is set in the context of a weak price trend. Gold’s utility to investors – as a flight-to-safety safe haven – is not at as much of a premium in a low-volatility and low-inflation world. Nevertheless, we continue to see the sentiment towards gold increasing slightly every month, even though these modest month-on-month increases in the asset class are not impacting the price of the precious metal.
“The UK has also seen an improved landscape for the property market as the four-month decline of the asset class we were witnessing came to an end with a sharp eight percentage point increase in October. In addition, October finally broke the four-month decline of the overall average change for all asset classes, which reached three per cent, the highest seen since this time last year. Overall, this indicates that investors are still holding their nerve and staying invested in an increased number of asset classes.”