Investor confidence has fallen in every sector except the UK, new data from Hargreaves Lansdown has shown.
The inauguration of Donald Trump in the US and with it, speculation of policy change and potential trade wars, coupled with geopolitical instability and conflict has knocked investor confidence. As a result, investors have retrenched into UK equities, the investment platform said.
Investor confidence in the UK grew by over 6% in February, in stark contrast to overall investor confidence, which fell by 2%. Confidence in UK economic growth also rose by almost 7%.
In comparison, investor confidence in other sectors fell markedly. The biggest drop was in emerging markets, which experienced a 14% dip in confidence levels compared to the previous month. North America and Japan also saw double-digit falls in confidence levels.
Victoria Hasler, head of fund research at Hargreaves Lansdown, said: “The relatively stable political picture in the UK compared to much of the rest of the world was clearly a comfort, as was the benign inflation picture. It is worth noting, however, that the rise in confidence in the UK was off a low base and in absolute terms confidence in the UK remains lower than most of the rest of the world with the exception of Europe.
“Given the uncertainty in markets, it is perhaps no surprise that investors flocked to cash funds in the first few weeks of February, with five cash funds in the top 10 most bought funds. Income funds also featured on the list, perhaps to safeguard income streams from the threat of falling interest rates. This latter point also featured heavily in the most bought investment trust list, with infrastructure, property and equity income funds dominating the list.”
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