What’s boosting investors’ confidence?

8 June 2021

The success of the UK vaccine rollout and the easing of social distancing are contributing to a boost in investors’ confidence, according to new research from HYCM.

A survey of 735 UK-based investors with investments in excess of £20,000 found 41% are confident the vaccine rollout will benefit their investment portfolios, while the same number (41%) believe the easing of social distancing rules will help their investments.

A fifth (22%) of those surveyed viewed the presidency of Joe Biden as a positive factor – nearly treble the 8% who believed it could harm their investments.

Despite this, over a third (36%) of investors expect the ongoing Covid-19 pandemic to reduce the value of their investments, with just 11% believing they will profit from it. A third (33%) also anticipate Brexit having an adverse effect on their investments.

Giles Coghlan, chief currency analyst, HYCM, said: “The success of the vaccine rollout is clearly having a significant influence on investors’ mindsets. In allowing lockdown rules to be lifted and the UK economy to spark back into life, the speed of the vaccine programme should also mean that investors – like consumers – become more active in the months to come.

“Meanwhile, it is interesting to see that many investors remain wary of how Brexit could affect their savings and investments. While a no-deal outcome was avoided, a large number of investors still fear a tail risk to their assets. It will likely take time for these concerns to subside.”

HYCM’s research also found cash to be king among investors, with 33% planning to invest money in savings over the next 12 months. Stocks and shares were found to be the second most popular option (22%), followed by property (14%) and bonds and ESG investments (11%).

Coghlan added: “In terms of asset classes, UK investors can clearly see the property bubble forming, not just in the UK but around the world – property prices globally have been spurred on by low interest rates. It makes sense that cash savings remain popular given the uncertainty that still lingers overhead, while bonds are evidently also being considered by many. If central banks start tapering, bond yields will become more attractive and this should see some UK investors moving into bonds from equities.”

Professional Paraplanner