Investors return to term deposits as confidence slips
Investor confidence slips in the second quarter amid ongoing fears about Europe's debt crisis, sending more kiwis to the relative safety of term desposits.
BUSINESSDESK: Investor confidence slipped in the second quarter amid ongoing fears about Europe’s debt crisis, sending more kiwis to the relative safety of term desposits.
Confidence fell 4 points to a net 8% for the three months ended June 30, according to the ASB investor confidence index. In the month of June alone, confidence fell 12 points to zero, the lowest in three years.
“Over the quarter Greece held two separate elections and narrowly avoided expulsion from the Euro," Jonathan Beale, head of wealth advisory, said.
"Although the situation in Greece appears to have stabilised following the June 17 election, concern about debt levels in Spain continues to rise."
“The uncertainty in Europe appears to have re‐ignited a flock to caution among investors, with more looking to the traditionally lower-risk option of term deposits as their investment of choice,” he said.
Term deposits reclaimed their top spot as the investment that gives the best return, up four points to 20%. That is compared to rental properties down two points to 17%, while KiwiSaver came in third on 12%.
The survey showed a sharp rise in the popularity of KiwiSaver for those aged 60 plus, rising eight points to 18%. Eligible investors were able to access their funds “for the first time on July 1, shortly after the survey period, potentially increasing their confidence in KiwiSaver returns", Mr Beale said.
Auckland investors bucked the trend, "climbing back to the dizzy days of Auckland’s property love affair" with about a quarter of the city's respondents believing the housing market offered the best returns.
Managed funds ranked fourth at 10%, bank saving accounts at 9%, while shares slid three points to 7%.
Hannah Lynch
Tue, 31 Jul 2012
Tue, 31 Jul 2012
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Investors return to term deposits as confidence slips
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