The stock market may be back in vogue for Britain’s DIY investors

Brits’ appetite for the stock market has come roaring back in the past month as retail investors poured cash into global equity funds, new data has revealed.

The UK and Europe both notched a 50 per cent surge in investor confidence on the previous month as amateur investors look to capitalise on “bouncing markets”, data from the UK’s biggest retail investment platform Hargreaves Lansdown shows.

Investors globally have fled equity markets over the past year as volatility shakes global stock markets. However, the latest investor confidence index rose to 90 through November, with investors searching out tech and AI focused funds after a surge in valuations this year.

“Investor confidence has been buoyed by bouncing markets – with conviction in all global equity markets rising,” said Emma Wall, head of investment analysis and research. 

“The UK and Europe saw the biggest bounce, both up 50 per cent, while Asia Pacific equities have seen a 30 per cent increase in confidence compared to last month.”

Wall said investors were “putting their money where their mouth is” and buying up equity funds and investment trusts. Vehicles invested in India have been a particular draw after a bounce in value in recent weeks, she added.

The figures mark a sharp rebound in confidence after a drop-off in equity investment in the past two years.

Figures over the summer from industry body the Investment Association showed that UK DIY investors pulled £1.5bn from equity funds. Outflows then slowed dramatically to £137m in October, according the body’s latest figures.

Wall added that a general slump in value across equity markets had presented good deals for investors and allowed them to buy on the cheap.

“Going into 2024, we believe valuations are below average in most global markets and offer upside for long-term investors,” she said. “Many Asian and emerging market companies are trading at a significant discount compared to their developed market counterparts.”

A drop-off in retail investors’ appetite has weighed on the valuation of firms like Hargreaves Lansdown and rival AJ Bell this year.

Hargreaves Lansdown’s market capitalisation has slumped around 50 per cent since Russia’s invasion of Ukraine triggered volatility across global markets in February last year. AJ Bell is trading down around 11 per cent in the same period despite an uptick in value at the end of last year.

Property funds have also been shunned by investors after a slowdown in the sector globally. UK investors pulled money from real estate funds for the second month running in November, according to data from fund network Calastone last week.

Investors withdrew £88m from real estate funds overall last month, making it the second-worst month of the year for property funds after August’s £121m net outflow, according to Calastone’s data.