Cash remains king despite the continuing low interest rate environment, according to the latest data released by CoreData.
The Australian Investor Sentiment Index (ISI) has recovered in Q2 from -9.0 to -0.6, but still remained in negative territory, with cash popular despite the historic low rate environment, according to CoreData.
The quarterly Investor Sentiment Report said that the uptick in ISI was driven mostly by an increase in investment intention and improved market expectations.
Following the growth in ISI, the Investor Equities Sentiment Index improved considerably to -6.4 from -14.2 in Q1 while the Investor Property Index recorded only a slight improvement to -8.2 against -9.2 in Q1 and both remained in negative territory.
Head of CoreData WA, Kristen Turnbull, said despite the historically low interest rate environment, Australians were still heavily invested in cash, holding a record $976.7 billion in cash and deposits, which represented 22.7 per cent of all financial assets.
Also, the cash equivalents and the Australian shares were the two most popular investments among respondents who had invested new money this quarter, according to a report.
“Looking forward, cash is also the most common investment investors are likely to make (44.5 per cent), with Australian equities coming a distant second (22 per cent),” Turnbull said.
However, she added that while cash remained popular, only one quarter of investors were happy with the investment returns generated by their cash assets in the past 12 months.
“This suggests that while cash is the flavour of the moment, the growing dissatisfaction with cash returns could prompt some reallocation of cash holdings if sentiment continues to recover,”
