Investors favour emerging markets, according to new research

Written by Editorial Team
Last updated: 22nd March 2013

The latest research from the Association of Investment Companies (AIC) suggests a significant increase in investor confidence – back to pre-credit crunch levels. Over half (55%) of investors are planning to increase their stock market exposure over the next few months, a 10 percentage point increase from 45% in February last year, and the highest level in eight years.

However, the UK is no longer the most widely favoured region, as investors increasingly look towards emerging markets and the Asia Pacific region. Emerging markets the most widely favoured region, with nearly a quarter of all investors expressing interest, followed by the Asia Pacific region at 19%. Interest in emerging markets has grown dramatically – six years ago, this area was favoured by just 6% of investors.

Last year the UK was the most favoured region for investment, at 20%, but this has since fallen to 15% – the lowest ever level.  To provide some perspective, six years ago the UK was the most favoured region for 75% of investors – representing a dramatic fall in confidence.

Poor savings rates drive investment 

A quarter of the investors surveyed stated that they were increasing their stock market exposure are doing so because they are tired of the low levels of interest on UK savings accounts. Fixed rate bonds, in particular, are no longer a guarantee of good rates. However, if you’re not ready to risk your capital on the stock market, structured deposit plans can provide an alternative. They allow you to gain potential stock market returns without putting your capital at risk.

The past performance of shares is not a guide to their future performance. If you are at all unsure of the suitability of this type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

Source: Research from the Association of Investment Companies (AIC) using survey data from Morningstar