March saw an overall average asset class sentiment reach a high, according to the monthly Lloyds Bank Private Banking Investor Sentiment Index. With continued improvement in overall asset class sentiment, net sentiment increased for seven of the ten asset classes surveyed with only a modest decline for the other three, leading to its highest overall score since June 2014.
However, in contrast to asset class sentiment, actual asset class performance decreased for nine out of the ten asset classes since last April.
Despite receiving the most negative sentiment of all asset classes (-33%), Eurozone shares recorded the largest positive month-on-month gain for the first time. With net sentiment increasing 13 percentage points, Eurozone shares also saw the highest increase for the asset class since the survey began in March 2013.
Ashish Misra at Lloyds Bank Private Banking, said: “The continued improvement in asset class performance paints a positive outlook for investors. Most notable is Eurozone shares, which has gained significant momentum, despite still displaying a highly negative sentiment. This could reflect the improvement in sentiment on account of the commencement of quantitative easing by the European Central Bank and some improvement in the overall macro-economic backdrop for the region despite ongoing challenges in the periphery.”
Gold was the biggest net loser in March, dropping 5 percentage points compared with February and saw its first negative swing since the start of the year.
Three out of the four sterling-denominated asset classes recorded a positive performance with UK shares rising 7 percentage points, UK corporate bonds rising 4 percentage points and UK government bonds rising 1 percentage points. UK property saw a 3 percentage points fall in sentiment, signalling its second dip this year.
In terms of an annual change, six of the asset classes recorded an increase, with Japanese shares (+28%), UK property (+17%) and UK government bonds (+10%) seeing the largest increases. Commodities (-38%), Gold (-16%) and Eurozone shares (-9%) were the worst performers.
All of the four sterling-denominated classes saw an increase in terms of annual change with UK corporate bonds and UK shares seeing an increase of 7% and 2% respectively.