The success of the vaccine rollout and lifting of lockdown rules have increased the optimism of UK investors, new research conducted on behalf of CFD broker HYCM has found.
The trading broker commissioned an independent survey of 735 UK-based investors, all of whom have investments in excess of £20,000, excluding their property, savings and workplace pensions. It found that 41% are confident the vaccine rollout will benefit their investment portfolios.
The same number (41%) believe the easing of social distancing rules will provide a boost to their investments. More than a fifth (22%) of investors consider Joe Biden’s presidency to be positive news for their portfolios, compared to 8% who think it will harm their finances.
Conversely, 36% think that the ongoing Covid-19 pandemic will reduce the value of their investments, while just 11% believe they will profit from it. A third (33%) say Brexit will harm their investments.
Many investors plan to switch out of cash in the next 12 months
Elsewhere, HYCM’s research also explored the assets, products and markets that investors are intending to back in the coming year. Cashing savings were the most popular – 33% plan to invest money in savings in the next 12 months.
Stocks and shares (22%), property (14%), bonds and ESG investments (both 11%) were the next most popular options. One in twelve (8%) plan to invest in cryptocurrencies.
Giles Coghlan, Chief Currency Analyst, HYCM, said: “The success of the vaccine rollout is clearly having a significant influence on investors’ mindsets. In allowing lockdown rules to be lifted and the UK economy to spark back into life, the speed of the vaccine programme should also mean that investors – like consumers – become more active in the months to come.”
It is interesting to see that many investors remain wary of how Brexit could affect their savings and investments. While a no-deal outcome was avoided, a large number of investors still fear a tail risk to their assets. It will likely take time for these concerns to subside.
Caution over UK property prices
In terms of asset classes, UK investors can clearly see the property bubble forming, not just in the UK but around the world – property prices globally have been spurred on by low interest rates. It makes sense that cash savings remain popular given the uncertainty that still lingers overhead, while bonds are evidently also being considered by many. If central banks start tapering, bond yields will become more attractive, and this should see some UK investors moving into bonds from equities.