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Investors returning to equities

Investors returning to equities

Category: Investments

Updated: 04/08/2009
First Published: 16/07/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

New data suggests that consumers are making tentative steps back into the equities market, reflecting a slight change in attitudes towards cautious investments.

For the first time since the three month period between August and September last year, the Skandia Investment Attitude Chart has recorded a rise in the popularity of UK equity funds as a percentage of total fund sales.

The figures reflect signs of a stock market recovery, as investors' attitudes towards funds that are perceived to be more risky, such as equities, begin to soften.

UK equity funds have actually increased by 30 per cent since the previous quarter, with sales of fixed interest funds up seven per cent, while cash market fund sales have declined by nine per cent.

However, there is still some reluctance to invest in stocks and shares, as nearly a third of all sales have gone to cash money markets and UK fixed interest sectors.

Sales of UK fixed interest funds stole a march on equities in the final quarter of last year, as investors opted for lower risk investments compared to a volatile stock market. This is likely to continue until the first quarter of 2010 at least, should current trends continue.

"The changes we have seen this quarter illustrate that some are re-acquainting themselves with risk, indicating a return in investor confidence," said head of investment and marketing at Skandia, Graham Bentley.

"However, with over 30 per cent of overall new sales going into cash/money markets and UK fixed interest sectors, many investors continue to invest cautiously against a background of low deposit rates."

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