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2015 asset class winners and losers: Japanese equities take the top spot

14th December 2015


With a 15.1% year-on-year rise, Japanese equities have been the big success story of 2015 but UK investor sentiment towards them has remained stubbornly negative finds new research from Lloyds.

The group’s latest Investor Sentiment Index also found that in contrast, UK property has consistently been the most popular asset class throughout 2015, with sentiment extremely high at around the 40-50% mark throughout the year.

But this is reflective of the actual market performance of the asset class which year-on-year is 10% higher. Elsewhere the analysis concluded that attitude’s have began to agree with markets about commodities.

Towards the end of 2015, sentiment finally became negative finishing at a generous -1.5%, down 9.11% compared to a year earlier, against a backdrop of huge declines in commodity prices and oversupply.

The actual market performance is down 40% year-on-year, making commodities the worst performing asset class in 2015.

Gold fell 12.2% year-on-year but bullion continues to be seen as a relatively ‘safe’ investment. As such, gold commanded positive sentiment of between 11% and 36% across the year, with sentiment now standing at 19.63%, only reducing by 3.01% in the last 12 months.

Markus Stadlmann, chief investment officer at Lloyds Bank Private Banking, said: “The results of the Investor Sentiment Index show that whilst there have been some real winners and losers when it comes to the actual performance of asset classes over the last year – sentiment doesn’t always truly reflect reality.

“At times such as these it is more important than ever for investors to be well informed and advised on the latest global issues and trends in order to help ensure they maximise the performance of their portfolios, particularly over the longer term.”

Sentiment vs. performance in 2015

Sentiment among UK investors for UK equities remained very positive all year and rounds off 2015 with sentiment at a robust 26%, albeit below the summertime highs of 40%. UK equities are down year-on-year by -2.7% but the asset class has staged something of a recovery in the final quarter of 2015, up 2.7% over last three months, as reasonable UK economic growth appears to be holding up.

But Lloyd’s said the reverse has been true of investor sentiment towards eurozone equities, with sentiment levels at -48% in summer during the nervousness around a potential Greek exit.

For the final quarter however, sentiment has trended around the -30% mark as the Greek situation has been dealt with for the time being but the eurozone recovery still looks weak. But given that actual market performance is down 4.5% year-on-year, the negative sentiment is understandable.

Investors have also seen US investments in positive light for the entire year. The actual market performance of this asset class has been less volatile than other markets at -0.1% year-on-year, as the US economy has shown signs of recovery.

In contrast, emerging market equities were very much in favour at the beginning of 2015 but were deeply unpopular in summer around the time of the unexpected Chinese devaluation.

Although sentiment towards emerging market equities is still positive, it has fallen by 10% year-on-year.

The actual market performance of the asset class has declined by 6.5% year-on-year, with most of the damage done in the summer months.

A year of uncertainty is reflected in the consistently positive sentiment towards both UK corporate and UK government bonds. UK government bonds’ actual market performance nudged up 0.9% year-on-year, while UK corporate bonds have actually declined by 2%.

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