Retail investor sentiment is ‘bearish', with over half of investors forecasting their portfolio to devalue or see no growth in the next six months, according to Legal & General.
Publishing its first What Matters Investment Index, Legal & General Investments said there was a ‘sense of uncertainty and pessimism about the next six months’ amongst investors.
The survey of more than 1000 investors in equity ISAs, unit trusts and investment trusts also showed ‘DIY investors’ had delivered three per cent higher returns over the last six months compared to those investing through banks or building societies.
Those investors collaborating with an independent financial adviser (IFA) saw a net return of 5.21 per cent compared to the ‘DIY investors’ – classed as those making their own investment decisions without an IFA – who delivered a net return of 6.78 per cent.
Twice as many investors were planning to invest in active funds rather than passive investments, with only two in five expecting to increase their exposure to equities.
There was some uncertainty amongst the panel about which asset class they would select in future, with one in three citing the reputation of a particular investment house as the most important influence on decisions.
Investors making their own decisions were more likely to invest in equities over the next six months, with property funds attracting the least amount of interest amongst the entire group.
Simon Ellis, unit trusts managing director at L&G Investments, said: “Investors are clearly looking for some signs that the market is recovering, and that this growth is both sustained and sustainable.”
He said the index was aiming to ‘understand the intentions of the country’s sophisticated investor’ in an environment with so much attention focussed on the financial services industry and with risk now fundamental to everything the sector was doing.
The index surveyed people with an average portfolio value of £111,217 excluding pensions but also included people with portfolios under £5,000.
© Fair Investment Company Ltd