HL investor confidence plummets in US but soars for Europe

• It was all change in March, with HL investors’ confidence in North America plummeting (-17%) but rising dramatically in Europe (+48%) and the UK (+16%).
• Confidence in UK economic growth also increased by an impressive 45% among HL clients.
• Investors continue to favour global funds but are now starting to look at European and UK funds too.
• The Investor Confidence Index is compiled by surveying HL clients on a monthly basis. This month’s survey was open 3 – 10 March.

Victoria Hasler, head of fund research, Hargreaves Lansdown:

“After a turbulent couple of months following the inauguration of a new president in the US, HL clients’ investor confidence took a dramatic U-turn in March. Confidence in North America, previously the most-loved area by investors, plummeted by 17% as HL investors baulked at the impact that some of the new president’s policies appear to be having on markets and sought diversification elsewhere.

Unlike the US, both the UK and Europe are on an upward path, with confidence in the UK increasing by 16% over the month and in Europe by a massive 48%, albeit both from relatively low bases. After some difficult months, HL investors seem to have faith that the political situation is settling down. In the UK, confidence in economic growth also increased by an impressive 45%.

Confidence among HL investors has also increased in both global emerging markets and Japan, although by smaller amounts. Investors continued to favour global funds in the first few weeks of March, with six of the top ten funds investing globally. Of these most were passive. It is worth remembering that passive global funds are likely to have a large weight in the US (the MSCI World Index had a weight of 73% to the US at the end of February). It is nice to see a European fund featuring at number six on the list, and a UK fund just snuck in at number ten. Perhaps it is too early to see improvements in confidence feed through to large scale purchases just yet, but like the daffodils that herald spring there are tentative signs of change.” 

Global investor confidence

HL data

Investor Confidence Index

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.