Investor sentiment is upbeat again… and green energy is in favour

Investor sentiment is upbeat… but green energy and biotech are IN, and tobacco and fossil fuels are OUT

  • Some 59% are optimistic markets will perform well for the rest of the year
  • Just 11% of investors said they were pessimistic right now
  • The biggest worry is the impact new coronavirus variants could have on markets 

Investors reckon green energy will be the top performing sector and tobacco the poorest over the next five years and beyond, new research reveals.

Healthcare, biotech and technology are also predicted to do well, while the oil, gas and mining industries are expected to take a hit as businesses and governments combat climate change and create a greener global economy.

Sentiment is generally upbeat among UK investors as the developed world shows signs of recovery from the pandemic, with 59 per cent  feeling optimistic markets will perform well for the rest of the year, according to the poll by Barclays Smart Investor.

Sustainable energy and biotech are among sectors forecast to do well, while fossil fuel and tobacco industries are expected to be among the poorest performers

Just 11 per cent of investors say they are pessimistic about markets this year, while 27 per cent have no feelings either way and 3 per cent are unsure.

Some 63 per cent believe that pandemic-hit industries such as hospitality and travel will recover soon, and 60 per cent are confident that the vaccine rollout will help markets.

When asked about the biggest threats to investment performance, 65 per cent said they were concerned about the potential impact new coronavirus variants could have on financial markets.

The UK-wide, cross-age survey of over 2,000 adults who own investments found that 59 per cent fear inflation, 58 per cent were anxious about market volatility and the same percentage were worried about the continued impact of Brexit. 

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Some 50 per cent were concerned that continuing Covid-19 restrictions would affect their portfolios, and the same percentage about the market ‘bubble’ bursting by the end of 2021.

The possibility of the tech bubble coming to an end is causing 42 per cent to worry about a collapse in valuations in the next six months, while 39 per cent are apprehensive about crypto currencies decreasing in value.

Barclays asked investors for their sector predictions in the short to medium term, meaning the next five years, and over the longer term.

Healthcare and biotech are expected to perform well in the near future, but technology is forecast to do better when looking beyond the next five years.

Although investors think hospitality and retail will bounce back from the Covid-19 crisis this year, these sectors are on the poor performer list for the next five years and beyond.

What was the full list of sectors? 

Investors were asked to choose among: sustainable energy; healthcare and biotech; IT, environmental; real estate (property); food and drink; financial services; oil, gas and energy; communication services; hospitality; utilities; retail; mining; industrials and tobacco.

Will Hobbs, chief investment officer at Barclays Wealth, says: ‘It’s great to see that investors are generally optimistic on the market outlook – and reassuring that many are still cautious when it comes to predicting the future, and the pathway out of the pandemic, with too much confidence.

‘We don’t yet know what the long term effects of the pandemic will be on the global economy, but many experts are predicting that Covid-19 will be the catalyst for an industrial revolution.

‘With such change comes real opportunity for investors – but it’s very difficult to pin point exactly which industries or sectors will truly benefit from this innovation.

‘With this in mind, investing in a diversified set of assets will give investors the best chance of benefiting from whatever the future economy holds.’

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