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Investor sentiment points to confidence in UK property, as Japanese shares dip

Thursday 9th October 2014

Between September and the start of October, the Japanese Shares asset class was the only asset class to display a negative month-on-month performance, according to the latest Lloyds Bank Private Banking Investor Sentiment Index, falling four percentage points to -3%. 
The asset class is only one of two with a net negative sentiment score based on responses by investors. The other is Eurozone Shares, which, despite a positive month-on-month change, still sits at -26%.
The beginning of this month also broke four successive months of decline as the overall average change across all asset classes reached 3%, 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 - despite a recent weak run -has maintained a steady net sentiment trend and comes in this month in third place, beaten only by UK property and UK equities asset classes. 
UK Property has strengthened its position as the top-performing asset class, climbing eight percentage points to 45% 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. 
The biggest annual decrease with a -8 percentage point swing was recorded by Japanese shares. Meanwhile, net sentiment for the Emerging Markets remained virtually unchanged. 
Commenting on all the results, Ashish Misra, Head of Investment Policy for Lloyds Bank Private Banking, said: “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 3%, 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,” he added.

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Editorial Contact Details - Conor Shilling
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