As well as taking flight from European and global stocks in the wake of Russia’s invasion of Ukraine, more investors are also basing their investment decisions on their ethics, according to new polls from the UK’ largest investment platforms.
Following the breaking out of hostilities in Ukraine, 54% of investors on the Interactive Investor (ii) platform said they have become more conscious of how their money is invested, with four out of 10 said they were considering investments that align with their moral values as a result of the conflict.
Almost a third said their moral stance had remained unchanged, according to the poll carried out of 2,058 visitors to the UK’s second largest consumer investment platform on Wednesday and Thursday last week, with 13% responding that they were not sure.
Asked what they felt represent the biggest threat to global stock markets over the next five years, the largest percentage of respondents (42%) picked the Russia-Ukraine war and the potential escalation of the conflict, ahead of inflation (23%), geo-political tensions involving China, Brazil, the Middle East and more broadly (20%) and 7% of respondents who cited climate change.
More investors also appeared to be tweaking their portfolio in response to the Ukraine invasion, ii said, with 55% of respondents reporting that they are making changes, of which a quarter are upping their stock market exposure; 13% are doing the opposite, while 17% are re-allocating money to more defensive sectors.
A month ago a poll by ii found that 80% of investors were following the ‘keep calm and do nothing’ mantra in response to rising inflation.
Lee Wild, ii’s head of equity strategy, said: “The Russian invasion has had a terrible impact on millions of Ukrainians, and the economic consequences are already being felt around the world. The conflict has made investors think hard about where their money is invested.
“More than half of those who responded to our poll are now more conscious about the destination of their cash, and almost 39% are considering investing more in line with their moral values. There are signs that this is not a temporary trend, but a more permanent shift in attitudes.”
Meanwhile, a monthly survey by Hargreaves Lansdown, the UK’s largest fund supermarket, found a sharp fall in investor confidence, with confidence in global sectors has plunged by on average 22% in March, with European and global sectors understandably seeing the biggest drop.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Confidence in the UK has dropped by more than a fifth (22%) as investors assess the ricochet effect sanctions will have on industries across the board, as they grapple with higher food and transport costs, and a hit to consumer spending power.
Investor confidence in the UK has dropped back to levels not seen for 18 months.
“This week investors are once again assessing the potential economic damage that a fresh wave of Covid is causing in China,” she said.
The investor confidence index is compiled by surveying clients on a monthly basis, HL said, with 6,000 random clients receiving it each month, across a representative split of clients by age. On average around 10% of clients respond.