UK investors paid more into their portfolios during the second quarter than the first three months of the year, despite mounting economic and political concern, new data from Scottish Widows shows.
Average portfolio contributions increased by 47% to £3,554 between April and June, up from £2,413 during the first quarter. Just under half (48%) reported positive returns this quarter, down marginally from 50% at the start of the year.
UK-held investments remained the largest single allocation, with North America also growing in popularity. More than one in three (31%) investors say their UK exposure has increased over the past three months, while individual shares remain in favour too, with 28% increasing their exposure.
However, the Scottish Widows Investment Pulse, which surveyed 2,000 non-advised UK retail investors, found the number of investors increasing contributions during the second quarter was down slightly at 26% from the 30% recorded in the previous quarter. At the same time, the number of people who said they invested less than usual has gone up from 19% to 23% since the last quarter.
A quarter (26%) of investors made no or very limited changes to their portfolios in the second quarter, while 13% chose to move some investments into cash, 12% opted to sell some investments and the same number (12%) chose to invest more in individual shares.
Meanwhile, just under one in 10 (9%) invested more in cryptocurrency and 8% invested more in gold.
The cost of living and personal finances were the biggest driving factors behind investors’ decision-making.
Manuel Pardavila-Gonzalez, managing director of investments at Scottish Widows, said: “Investors have shown real resilience this quarter, increasing their contributions even as global conflict has escalated and the UK political landscape has shifted expectations.
“There’s a clear sense that investors are remaining level-headed. Even as the cost of living continues to bite, most aren’t reacting to short-term noise or alarmist headlines – they’re staying the course rather than making knee-jerk decisions.”
Looking ahead, Scottish Widows said that more than four in 10 (44%) expect their portfolios to perform well in the third quarter. Nearly one in four (24%) will increase the amount they invest over the next three months, with investors planning to contribute an average of £3,579, while just 16% plan to reduce contributions.
A desire to build long-term wealth was the leading factor (43%), while 28% cited feeling that it is a “good time to invest.” More than a fifth (21%) are driven by having more spare money than usual, while 19% are making use of their ISA allowance and tax benefits.
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