HL investors’ confidence rebounded strongly in May, with confidence in all regions higher than the month before, a confidence in the UK shot up by an impressive 70%, while confidence in UK economic growth rose even quicker at 85%.
Victoria Hasler, head of fund research, Hargreaves Lansdown comments:
“After a terrible month in April, May saw a huge rebound in investor confidence among HL clients. The pause in tariffs, combined with opportunities presented by the fall in markets, saw investor confidence rise across all regions in our survey.
The UK saw the biggest rise, with investor confidence increasing by an impressive 70% from the previous month. It should be noted that April was a low point for the UK, with the smallest confidence number of any region in our survey but, even so, the rebound was dramatic. Confidence in UK economic growth increased at an even quicker pace, rising 85% on the previous month.
There was also a striking increase in confidence in Europe, up 55% from April. The region in which investors have the most confidence, however, is Japan. This could be linked to the yen’s perceived status as a safe haven, or perhaps the structural reforms which continue to come through in the market and inflation creeping back into the system for the first time in decades.
Investors remain cautious on the US. Whilst confidence in the North American market did rise, the magnitude of the rise was much smaller than other markets at just 8%. It seems that investors are still mistrustful of Trump.
In what have been quite tricky markets, the most popular fund in May so far was, for the first time in many months, an actively managed offering – Artemis Global Income. Passives remain the most popular choice with investors overall however, with eight of the top ten funds being index trackers.
Within investment trusts, infrastructure was a popular choice. The outlook for infrastructure spending remains good given the government’s net zero commitments, and most infrastructure trusts pay an attractive income which, when combined with the large discounts at which they are trading, have made them popular with investors. The stalwarts of the investment trust world such as Scottish Mortgage and City of London Investment Trust also remain popular.”
Investor Confidence Index
Each month we send the investors’ confidence survey to 6,000 random clients and there is a representative split of our clients by age. On average around 10% of clients respond.
