Investor confidence returning

Category: Investments
Date: 6/8/2009

Investor confidence looks to be returning and has actually surged significantly over the past six months.

The Investment Management Association's (IMA) Great British Investor Confidence Index (UK GB ICI) rose by seven points compared to April, recording a score of 106 in May.

The index works on a scale from 0 to 200, with 100 being neutral. In just six months the score has risen markedly by 35 points.

The IMA also revealed that half of investors believe the current investment market has improved compared to six months ago, while a similar amount (51 per cent) think now is a good time to put money into investment products.

Less than half (47 per cent) of investors said they believed the current financial slowdown would last another one to two years, compared with 58 per cent who thought that would be the case when asked in November last year.

Of the investors looking to boost their portfolios over the coming year, 51 per cent will opt for equities.

"These findings suggest that investors are feeling more optimistic about the investment market than they did six months ago, although they are still cautious about entering it," said Richard Saunders, chief executive of the IMA.

"This improved mood is consistent with IMA sales statistics which show modest net retail inflows into equity funds over the last two months, but much healthier ones into corporate bond funds over the last six months, with April's overall retail sales being the highest in three years."