Advisers are increasingly telling clients to invest in cash and bonds as stock market volatility continues, according to Virgin Money.
Emerging market and UK equities in particular have fallen out of favour with IFAs over the past three months, according to Virgin Money’s Investor Intentions Index.
Around 86% of advisers told Virgin Money they will be recommending clients invest in cash over the next quarter, while 83% will advise bonds.
Cash and bonds have become the top two sectors in the latest survey, knocking emerging markets and UK equities off the top spots.
However, 78% of adviser will still recommend UK shares, meaning they have not yet completely fallen off advisers' radars despite a highly volatile stock market.
On the other hand, property and commodities have become very unpopular with IFAs in recent months, with only 41% saying they will recommend property in the next three months and just 40% thinking favourably about commodities. This is down from 50% and 52% respectively in the last survey.
Scott Mowbray, Virgin Money spokesman, comments: “The shift to cash and bonds is a sign of the times with stock market volatility and almost daily doses of bad news hitting confidence in shares. It is clearly a case of safety first for advisers with clients' best interests at heart.
“Concerns about inflation are the dominant factor in the market with that worry outweighing fears about the UK economic slowdown tipping over into recession.
“Despite the short-term angst our research shows IFAs remain optimistic about the long-term outlook for UK and emerging market shares. The real damage has been done to property and commodities while other sectors such as green investments are holding up well.”
If you would like to comment on this story, contact:
Tel: 020 7484 9805
e-mail: [email protected]
Went into administration April 2018
Threat of legal action looms over Woodford IM
View from the front row
Retirement Planner Forum 2019