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UK bonds out of favour while property and equities thrive


Both UK government and corporate bonds are not proving popular with investors according to the monthly Lloyds Bank Private Banking Investor Sentiment Index.

Investor sentiment towards UK government bonds endured its largest fall of 5 per cent from last month, down to 16 per cent while corporate bonds declined in sentiment among surveyed investors to 14 per cent, a drop of 3 per cent. Shares, however, fared better with sentiment towards UK and international shares remaining strong and UK shares enjoying investor sentiment of 37 per cent. US shares were up to 19 per cent along with emerging market shares which went up 3 per cent last month.
Eurozone shares enjoyed the greatest boost with a rise of over 5 per cent over the month but they still languish in negative territory, sitting at 28 per cent.
Across the asset classes, UK property saw the largest monthly increase in returns of 7 per cent. Year on year changes reveal that half of the ten asset classes have seen a fall in net sentiment over the past year, with the biggest declines in Eurozone shares, -18 per cent, UK property, -11 per cent and Commodities at -6 per cent. Gold recorded the biggest improvement in net sentiment, rising 7 per cent. (See Largest gold mining ETFs arrive in UCITS form in Europe, Wealth Adviser)
Ashish Misra at Lloyds Bank Private Banking, said: “Overall asset class performance paints a positive picture for investors as the average change has shown a steady increase since the start of the year. Interestingly, as UK government bonds decline, US shares have hit their survey high.
“However, Eurozone shares, despite gaining significant momentum, continue to display a highly negative sentiment. This momentum could reflect the quantitative easing by the
European Central Bank. As the currency falls, sentiment towards the asset class has gone up with increased export and job prospects.”

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