The majority of investors do not anticipate a return to normalcy until after July, according to new survey by UBS.
The investor sentiment survey from UBS has polled more than 4,000 investors and business owners in late December and January.
The investment bank found an increased sense optimism from investors globally, with the majority (60 per cent) of respondents holding a positive economic outlook for the next 12 months, compared with 55 per cent in the three months prior.
The majority (63 per cent) do not, however, believe that life will return to normal in the next six months and of those respondents, only 48 per cent are optimistic about the economy.
Among the 37 per cent of investors who expect a return to normal life in the next six months, economic optimism is much higher at 80 per cent.
But during the next six months, most investors (61 per cent) are 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 per cent) and new US President Joe Biden (62 per cent).
Tom Naratil, president of UBS Americas and co-president of UBS Global Wealth Management commented eight in 10 investors indicated a higher need for expert advice.
“The decade ahead will present new opportunities, while geopolitical, economic and social challenges will remain,” he said.
Investors also expressed particular interest in sustainable investing, with 54 per cent looking to increase their allocations. Half of investors expect sustainable investing to yield better returns relative to traditional investing, while 29 per cent expect equal performance.
UBS Global Wealth Management co-president Iqbal Khan added the company had seen an accelerated demand for sustainable investing in recent years.
“Three years ago we had around US$1 billion invested in our 100 per cent sustainable portfolio for private clients. Today that figure is over US$18 billion,” Mr Khan said.
Asian investors had grown more positive about the economic outlook in their region. The proportion expressing optimism was up by 7 percentage points to 62 per cent.
Their confidence in the stock market had also risen by 7 percentage points, to 61 per cent.
In the US, the national debt had surpassed COVID as the top concern for respondents (60 per cent). Around 59 per cent of US participants believe the US election results will be good for the economy, while 31 per cent believed they would be detrimental.
Regardless, stock market optimism increased to 59 per cent from 55 per cent in the prior quarter, due to vaccine progress and Mr Biden’s inauguration.
Meanwhile, 65 per cent of European respondents (excluding Switzerland) were confident in their own region’s economy, up from 58 per cent, while 64 per cent were optimistic about the stock market, up from 55 per cent three months prior.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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