HL Investor confidence survey shows UK optimism rising, while FTSE 100 inches up
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Q1 2021 hedge fund letters, conferences and more
- Investor confidence has risen again in April to another record high score this year, and the highest reading since March 2014.
- Confidence in North America & the UK market has risen the most, both rising by 8 points each.
- The biggest drop in confidence can be seen in Europe, dropping by 7 points.
- Confidence in the UK Economic Growth has also risen this month, rising by 12 points.
- Confidence that interest rates are going to be higher in both the mid to short term has risen slightly this month.
- Most popular funds include Baillie Gifford American, Marlborough UK Micro-Cap Growth and HL Multi-Manager Balanced ManagedTrust.
- Most popular shares include Legal and General, Lloyds and Tesco.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown:
A Surge In Investor Confidence In The UK
“There has been another surge of confidence in the UK as Brexit uncertainty has continued to ebb away. Although lots of companies are encountering more red tape, Overall the economic impact of a post-Brexit world appears to be lower than investors expected. Our measure of sentiment towards the UK is higher than it’s been since well before the Brexit referendum, back at levels last seen in March 2014.
The UK is considered to be ahead of the curve in vaccine efforts and that’s also helped put wind in the sails of confidence. The FTSE 100 has fallen back from the psychologically important 7,000 mark this week over concerns about fresh covid mutations, but it is creeping back up. The pattern of two steps forward, one step back is likely to continue for some time as an uneven recovery unfolds. Stocks linked to the travel sector continue to be the laggards in this economic revival. Airlines IAG and easyJet have gained ground today but they are still well below pre-pandemic levels. Exhibitions giant Informa, which revealed a big accounting loss today is among the top fallers on the FTSE 100 over fears international business travel won’t bounce back any time soon. However, as the UK inches along the re-opening road map, with social distancing measures on track to be lifted by the end of June, clients are hopeful that UK companies will bounce back strongly during the second half of the year. President Biden’s stimulus programmes appear to be boosting sentiment in the US as well, with hopes that the mass spending plans will filter through to UK assets. But we should remember that confidence is coming from a low, depressed base and the bounce is more pronounced because of just how out of favour the UK has been in recent years.
Post popular funds and stocks in ISAs since the 6 April 2021.
In alphabetical order and by net trades
| Baillie Gifford American |
| Baillie Gifford Managed |
| Baillie Gifford Positive Change |
| Fundsmith Equity |
| HL Multi-Manager Balanced Managed Trust |
| HL Multi-Manager Special Situations Trust |
| HL Select Global Growth Shares |
| Marlborough Nano-Cap Growth |
| Marlborough UK Micro-Cap Growth |
| Rathbone Global Opportunities |
Most popular shares and overseas shares into ISAs since 6 April 2021.
| Legal & General Group plc |
| Coinbase Global Inc |
| Lloyds Banking Group plc |
| Rolls Royce Holdings Plc |
| International Consolidated Airlines Group SA |
| Tesla Inc |
| GlaxoSmithKline plc |
| BP Plc |
| Tesco plc |
| Argo Blockchain Plc |
About us
1.5 million investors trust us with £120.6 billion (as at 31 December 2020), making us the UK’s largest direct-to-investor service.
Our purpose is to empower people to save and invest with confidence. We want to provide a lifelong, secure home for people’s savings and investments that offers great value and an incredible service, and makes their financial life easy.
Clients rate our service highly, 90% say we are good, very good or excellent.
Our expert research has been helping investors for almost 40 years through thick and thin – we’ve seen many market downturns.
We make things easy – it takes just five minutes to open or top up an ISA. More clients log into their accounts via our mobile app than through a desktop PC.
In 2018 we also launched Active Savings, an online savings marketplace that lets savers move money easily between banks, to help their money work harder without the hassle.
Our helpdesk is based in our HQ in Bristol. We have a tech hub in Warsaw Poland and around 100 financial advisers based across the UK. We are a financially secure, FTSE 100 company.
For more information: www.hl.co.uk/about-us
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Investor relations: www.hl.co.uk/investor-relations
FAQs
Investor confidence refers to the willingness of investors to undertake financial activities in the market by leveraging all available opportunities. This is influenced by their perception of risk and expected returns, which is a critical driver of economic and financial fluctuations.
Why is confidence so important in the stock market? ›
However, if the stock market remains depressed for long, it may begin to slow down the economy as well. The lack of investor confi- dence causes consumers to delay their spending. The lower stock market, caused by the confidence crisis, will eventually affect business investment too.
How does confidence affect investment? ›
On the other hand, when investor confidence is low, there may be pressure to sell and a lack of demand, which results in falling stock prices. Investor confidence influences market patterns and affects overall market performance as a psychological component.
Will Baillie Gifford Global Discovery recover? ›
With inflation likely peaking, Baillie Gifford's fortunes are forecast to recover in 2023 and beyond offering enormous potential for those able to stomach the swings that comes with volatile markets.
What are the three criteria an investor should consider before investing? ›
The options for investing your savings are always increasing but they can all still be categorized according to three fundamental characteristics: safety, income, and growth. The first task of any successful individual investor is to find the correct balance among these three worthy goals.
Which ratio indicates investor confidence in a common stock? ›
Price-to-earnings, or P/E, ratio
The price-to-earnings (P/E) ratio is quite possibly the most heavily used stock ratio. The P/E ratio—also called the "multiple"—tells you how much investors are willing to pay for a stock relative to its per-share earnings.
When stock prices rise due to confidence? ›
Confidence in the stock market can also push up demand and prices for individual stocks. If investors believe that stocks are a good investment, either because valuations are attractive or because the stock market has been trending upwards, an increase in demand for stocks can push up prices across the board.
What did confidence in rising stock prices lead to? ›
A rising stock market is usually aligned with a growing economy and leads to greater investor confidence. Investor confidence in stocks leads to more buying activity which can also help to push prices higher. When stocks rise, people invested in the equity markets gain wealth.
What does low confidence mean on a stock? ›
Low confidence means with the first sign of troubles in the broader market, the investor will get jittery because he doesn't know if the business he owns has the resilience to weather the temporary storm. Low confidence is usually compensated with diversification.
Is confidence a key factor to success? ›
It is a belief in oneself, abilities, and one's potential to overcome challenges and accomplish goals. People who possess self-confidence can achieve success in their personal and professional lives by taking risks, pursuing their dreams, and handling failures with resilience.
Believing in yourself, having confidence in your own abilities, leads to success. Confidence gives you courage, resilience, motivation, and a belief in your own ability to succeed. The best way to attain confidence is by acquiring skills and training; skills that form the basis of your abilities and achievements.
Why has Baillie Gifford gone bad? ›
The outflows for Baillie Gifford come after the group's assets under management plunged by £113bn in 2022, according to a Financial Times report in February. These were driven by valuation decreases across its investments, with net outflows accounting for around £20bn.
Why is Baillie Gifford falling? ›
The volatility experienced by several Baillie Gifford equity strategies in recent years has led many advisers to lose confidence in the growth-focused asset manager, with one telling Citywire New Model Adviser last year that Baillie Gifford was 'more of a hold than a buy' due to disappointing performance.
Why has Baillie Gifford dropped? ›
The fall was largely due to declining values of its investments, with outflows accounting for £20 billion. The figures include money from large institutional investors, as well as retail investors.
What determines manager and investor sentiment? ›
Introduction. This paper adds to the literature by investigating the common factors that underlie investor and managerial sentiment. It finds that both rely on inflation, liquidity and the term premium, though it finds that managers and investors sentiments react with opposing signs to changes in the term premium.
Why are investors overconfident? ›
Overconfidence in general is supported by bias in self-attribution, as modeled in Daniel, Hirshleifer, and Subrahmanyam (1998) and Gervais and Odean (2001); that is, investors who have experienced high returns attribute this to their high skill and become more overconfident, while investors who experience low returns ...
Does your personality determine your success as an investor? ›
The power of personality
The data showed, for example, that highly neurotic investors are much more concerned with downside risk. Investors with high conscientiousness and extroversion, by contrast, expect a lower probability of a market crash.
