November 26, 2013 11:32 ET

Investors Unmoved by Threat of US Default

Halifax Share Dealing Reports That UK Investors Believe a Technical Default in the US Would Only Have a Short Term Impact on Markets

LONDON, ENGLAND--(Marketwired - Nov. 26, 2013) - The majority of investors would not change the structure of their portfolios in the event of a US default and believe it would only have a short-term impact on the markets, according to the latest Halifax Share Dealing Market Tracker.

Despite speculation over the consequences for global markets as a result of a technical default in the US earlier in the month; almost three quarters (74%) of UK investors do not believe the impact would warrant a change in their portfolio. More than 60% think it would only have a short-term impact with just 27% predicting it would have a long-term impact.

Damian Stansfield, managing director of Halifax Share Dealing, says:

"The possibility of technical default has receded again, but the issue will return should US politicians not reach an agreement over the debt ceiling in early 2014. While we don't know what the exact impact of a technical default would be, it could include a decline in the US dollar and a decline in global GDP - both of which would have consequences for global markets."

Strong increase in consumer services holdings

Month on month figures reveal an 11.9% increase in the percentage of investors holding consumer services stocks, with 46.1% currently invested here compared to 41.2% in August. The only other sector in the top five to see a month on month increase in investors was general industries (up from 33.3% to 36.8%).

While energy and mining stocks remain the most widely held sector, on an annual basis the percentage of investors in this sector has decreased from 72.5% to 64.7%. Since the beginning of the year consumer & retail products has seen the most withdrawals from investors and is down 13.3% to 39.7%.

Top five holdings in September 2013 January 2013 September 2013 % change
Energy & mining: gas & oil etc 66.4% 64.7% -2.6%
Financial services: banks, insurance, property services, investment companies etc 65.8% 62.3% -5.3%
Consumer services: retailers, leisure, entertainment, media, transport etc 41.2% 46.1% 11.9%
Consumer & retail products: beverages, health, tobacco, pharmaceuticals etc 45.8% 39.7% -13.3%
General industries: aerospace, defence, electronics, engineering etc 34.8% 36.8% 5.7%

Source: Halifax Share Dealing Market Tracker

Future investment trends

Looking ahead over the next six months the number of investors planning to invest in financial services companies has fallen to 46.1% from 51.3% in August. However the percentage planning to invest in energy and mining stocks has increased from 45.4% to 49.2%, and the percentage planning to invest in consumer services has risen from 27.6% to 31.9%.

In general, over the last six months 63.4% of investors have reported an increase in the value of their share portfolios compared to 15.6% who have experienced a loss.

The percentage of investors who are predicting the FTSE100 will be higher in six months has fallen from 66.3% in August to 55.1% in September. However, longer term investors are more optimistic it will increase with 74.6% predicting it will be higher one year from now and 82.7% predicting it will be higher in five years time.

To view the graph accompanying this press release please click the following link: http://media3.marketwire.com/docs/HAL1126.pdf

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