UBS’s new Investor Sentiment survey, finds that market optimism has been boosted by vaccine progress and the impact of US election results.
- Investors and business owners globally have grown more upbeat on the economy and stock market
- A majority of investors do not anticipate a return to normalcy until after July 2021
- Eight in 10 respondents now expect sustainable investments to deliver returns that are the same as or better than traditional investments
Investors are increasingly optimistic about their regional economic outlook and the equity markets, according to UBS’s new Investor Sentiment survey, which polled more than 4,000 investors and business owners across 14 markets globally in late December and January.
A majority of survey respondents (60%) have a positive economic outlook over the next 12 months, compared with 55% three months prior. Sixty-three percent of investors don’t believe life will return to normal in the next six months. Of those respondents, only 48% are optimistic about the economy. Among the 37% of investors who expect life to return to normal in the next six months, economic optimism is much higher at 80%.
Over the next six months, 61% of investors are also increasingly optimistic about the stock market, up 6 percentage points globally over the past quarter. Globally, investors expect the market to benefit from progress on COVID-19 vaccines (72%) and the potential impact of the US election results (62%).
Among business owners, 72% are confident in their own business over the next 12 months, up from 69% in the third quarter, due to business momentum (45%), vaccine progress (43%) and favourable monetary policy (40%). Nearly a third of business owners (32%) plan to hire workers, up from 30% three months prior. However, the proportion of business owners who plan to downsize increased as well, up 2 percentage points.
Investors expressed particular interest in sustainable investing, with 54% looking to increase their allocations. Half of investors expect sustainable investing to yield the better returns relative to traditional investing, while 29% expect equal performance.
Tom Naratil, President of UBS Americas and Co-President of UBS Global Wealth Management, said: “We are encouraged that confidence among investors and business owners is rising globally, despite uncertainty over COVID-19 and political issues. The decade ahead will present new opportunities, while geopolitical, economic and social challenges will remain. It is no surprise to see that eight in 10 investors tell us they need expert advice more than ever.”
Commenting on the finding that most investors plan to increase sustainable allocations within their portfolios, Iqbal Khan, Co-President of UBS Global Wealth Management, said: “Three years ago we had around USD 1 billion invested in our 100% sustainable portfolio for private clients. Today that figure is over USD 18 billion. We believe sustainable investing offers significant value for clients and for the world, which is why in September we became the first major global financial institution to make it our preferred solution for private clients investing globally.”
