Investor Sentiment Highest in March 2015

Overall, investor sentiment for the month of March, 2015, reached a high of 16% as per a reputable investor sentiment index for the UK. At the same time, the net sentiment went up for seven out of the ten surveyed asset classes with the other three registering a slight decline to register the highest total score since last year, July 2014.

How is "The Investment Market Cycle" associated with "The Cycle of Investor Sentiment"?

How is “The Investment Market Cycle” associated with “The Cycle of Investor Sentiment”?

Yet, in comparison to sentiment, the performance of actual asset class went down for nine out of the ten asset classes between February and March 2015.

Only Japanese shares asset class recorded a rise from last month (7%) in the area of performance apart from recording the fifth highest increase for investor sentiment to increase 5pp (five percentage points).

Eurozone received the worse sentiment of every asset class at -33 percent, but ended up recording the highest positive gain from one month to the other. As the net sentiment went up by 13pp, the shares in the Eurozone enjoyed a handsome asset class rise since March 2013 when the survey started.

In March 2015, Gold ended up the largest net loser and dropped 5 percentage points in contrast with February 2015 where its first swing negatively was recorded since the beginning of the year. Three of four asset classes denominated by the sterling pound recorded a good performance. The UK shares rose by 7pp, corporate UK bonds by 4pp as UK government bonds went up by a single percentage point. In the area of UK property, a three percentage point drop in sentiment was seen, signalling the second dip for UK property in 2015.

Of all the asset classes, five have indicated a dip in net sentiment since 2014. Eurozone is one of the top declines at -99 percentage points, -15 percentage points for UK property and -6 percentage points for commodities. The biggest rise in net sentiment was recorded by the UK government at 12 percentage points as Gold also gained 10 percentage points and 5 percentage points for US shares.

Trader Emotion Chart

Trader Emotion Chart

As the findings were reported, analysts explained that the continued rise and improvement in the performance of asset classes shows a positive picture investors will be keen to laud. Eurozone shares are perhaps the most notable of all this after gaining a very crucial momentum even as it displayed a high negative sentiment. It is also possible that the sentiment improvement is a result of continued quantitative ease courtesy of the European Central Bank, including a number of improvements in the total macro-economic setting for Europe even as the challenges remain.

Also, it is clear the UK shares positive sentiment has not been missed as it is reflected in the rate of recovery of the UK economy that even now has remained very solid. Nonetheless, the United Kingdom property shares have started easing after the recent slowdown of the housing market that could end up into a slight narrowing of demand from investors in the next few months in 2015. In essence, the results are very significant for investors who take such information seriously.

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