Confidence is back as investors bet on shares
- Virgin Money Investor Intentions Index shows surge in optimism
Investors are ditching cash investments in a return to stocks and shares as confidence in equities makes a comeback, according to the latest results from the Virgin Money Investor Intentions Index.
The number of IFAs advising their clients to invest in cash has fallen dramatically from 86 per cent this time last year to just 55 per cent now.
Virgin Money’s authoritative Investor Intentions Index tracks the confidence of independent financial advisers across the country in 10 different investment sectors as well as where they advised their clients to invest their money over the preceding quarter.
The year-on-year figures show that the proportion of IFAs recommending UK shares to investors increased from 78 per cent this time last year to 80 per cent now.
Over the same period the FTSE 100 Index has fallen from 5,649 points to 4,966. However the Index is actually in a period of recovery, having risen in value significantly and consistently from a low of 3,460 points in March this year.
And optimism in the likely performance of UK shares has rocketed in the past year as signs of recovery slowly translate into better results on the stock market. Virgin Money’s Optimism League puts UK Shares top by a huge margin – 45 per cent of IFAs are most optimistic about UK equities in delivering the best return for their clients’ investments, up from 29 per cent a year ago.
Meanwhile confidence in cash has disintegrated from 18 per cent of IFAs who think cash would deliver the best returns to just 7 per cent now.
Virgin Money spokesman Grant Bather said: “The FTSE is on the up and while it will be a gradual and at times unpredictable improvement, there seems to be a quiet acceptance that UK shares are recovering from the downturn. Cash is the big loser as investors have started to shirk the relative safety of cash in favour of capitalising on the long but consistent curve of recovery in the stock market.”
However the reduced interest in cash has not bolstered confidence in many of the other investment sectors tracked by the Virgin Money Investor Intentions Index. Green investments continue to suffer with the number of IFAs recommending eco-friendly investments down from 49 per cent to 44 per cent in the past year.
Fewer IFAs have recommended European shares (down from 74% to 70%), property (down from 41% to 38%), bonds (down from 83% to 82%) and gold (down from 35% to 33%), Virgin Money says.
However confidence in the Far East and other emerging markets is significantly higher now than a year ago. According to Virgin Money the number of IFAs advising clients to invest in the Far East is up from 63 per cent a year ago to 69 per cent now, and in emerging markets from 71 to 78 per cent.
| SECTOR | PERCENTAGE FEELING MOST OPTIMISTIC ABOUT SECTOR | CHANGE ON LAST YEAR |
|---|---|---|
| UK Shares | 45% | + 16% |
| Emerging Markets | 27% | - 9% |
| Far East | 22% | + 2% |
| European Shares | 22% | + 3% |
| Bonds | 17% | + 3% |
| Property | 13% | + 1% |
| Commodities | 9% | - 4% |
| Gold | 9% | + 4% |
| Green Investments | 8% | + 3% |
| Cash | 7% | - 11% |
The Virgin Money Investor Intentions Index tracks 10 sectors in total. These are: UK shares, European shares, green investments, cash, commodities, property, bonds, Far East, emerging markets and gold. The Index details advice over the last 3 months and investment intentions for the next quarter.
- Ends -
Notes to Editors
* IFA interviews were conducted by George Street Research in August 2009. A total of 100 interviews were completed amongst a cross-section of advisers throughout Great Britain with a weighting towards those whose business is primarily with investment clients. Quotas were imposed on the total sample in respect of size of IFA firms, region and areas of specialisation.
For further information:
Grant Bather, Public Relations Manager, Virgin Money
Tel: 0207 111 10212
Kevan Reilly/Billy Partridge Citigate Dewe Rogerson
Tel. 0207 638 9571
About Virgin Money
Virgin Money is Virgin’s financial services arm and was established in 1995.
Virgin Money has over two million customers and offers a wide range of financial products across lending (e.g. credit cards and personal loans), savings (e.g. deposits, investments and pensions) and protection (e.g. life insurance, home insurance and car insurance) to the UK market.
Virgin Money Personal Financial Service Ltd is authorised and regulated by the Financial Services Authority (FSA). Registered Office: Discovery House, Whiting Road, Norwich NR4 6EJ. Registered in England no. 3072766. Entered on the Financial Services Register (www.fsa.gov.uk/register), Register Number: 179271
