Investor confidence jumps across all global equity sectors

Investor confidence jumps across all global equity sectors

• HL’s Investor Confidence Index has risen to 90
• Confidence has risen in all Global Sectors
• Confidence has jumped the most in Europe and the UK – up 50%, while Asia Pacific equities have seen a 30% increase in confidence compared to last month
• Investors drop money market funds from top buys list for India

Emma Wall, head of investment analysis and research, Hargreaves Lansdown:

“Investor confidence has been buoyed by bouncing markets – with conviction in all global equity markets rising. The UK and Europe saw the biggest bounce, both up 50%, while Asia Pacific equities have seen a 30% increase in confidence compared to last month. Investors are putting their money where their mouth is too, and buying up equity funds and investment trusts, particularly those invested in India which has been on a tear of late. In the top 10 most bought funds and trusts there are a total of three Indian equity offerings, from Jupiter, Ashola and Ocean Dial.

Investors are also predicting further gains for the tech-dominant US market, with confidence up 20% in American equities. Investors are seeking out tech and AI focused funds too, buying into momentum with specialist offerings from Fidelity and Sanlam.

Going into 2024, we believe valuations are below average in most global markets and offer upside for long-term investors. Many Asian and emerging market companies are trading at a significant discount compared to their developed market counterparts. China, in particular, is a beaten-up region we think is worth looking at despite the negative headlines. While there are clearly question marks over some sectors such as property, looking ahead over the next five to 10 years, this presents an attractive entry point for investing in China.

On the flipside, valuations in the US look close to fair value when compared to their history. The top 10 constituents of the S&P 500 are trading at significant higher valuations compared to the rest of the market. We therefore don’t consider the US to be the most compelling market to buy going into 2024. Every portfolio should have a good allocation to the US, but we encourage investors to diversify their risks to include other styles, sectors and countries. While recession risks can sometimes create a buying opportunity for contrarian investors, we think the macroeconomic headwinds in Europe are just too tough to justify investing new money in the region this year – though as with all major economies it has its place in a diversified portfolio.”

Investor confidence in global sectors

HL data

Investor Confidence Index

The Investor Confidence Index is compiled by surveying HL clients on a monthly basis. Each month we send the investors’ confidence survey to 6,000 random clients and there is a representative split of our clients by age. On average around 10% of clients respond.