General Election poll: Investors dash to cash

Just weeks before the election, our poll reveals some dramatic changes in investor behaviour. 

As Brits get ready to go to the polls, the UK general election outcome has usurped Brexit as the number one issue concerning investors right now – by a massive 12 percentage points. 

Some 44% of respondents say they are most concerned about the UK General Election outcome, whilst 32% fret most about Brexit. The third most common concern – US/China trade war, is way behind at 14%.

And it seems they are putting their money where their mouth is: 43% say they are increasing their cash holdings, and 17% of these say they are upping their cash levels significantly. Some 484 customers responded between 14-15 November 2019. 

Whilst 45% of respondents are sticking to their investment strategy whatever the political weather, a third (33%) of respondents said they are not investing until the outcome of the election is known; 16% are heading for less risky investments; whilst an adventurous 7% say they like volatility, so are trading more.   

Only 5% of interactive investor customers say they are not concerned by 'market noise' – be it a UK election, Brexit, Trade Wars or otherwise.

Meanwhile, at a time when the CBI have warned both the Conservatives and Labour party about 'extreme ideologies' in politics, it is interesting that almost a quarter (24%) of respondents expect none of the political parties to have a positive effect on markets, with  other factors expected to have a bigger impact. 

• UK General Election: Investment ideas for all scenarios

Whilst respondents' views about which political party will be best for markets should not be read as an illustration of their voting intentions, it seems that Labour have the most convincing to do from an investment perspective at least. Only 6% of respondents thought Labour would be the political party with the most positive influence for markets, 9% thought the Liberal Democrats, whilst 61% thought a Conservative victory would be the most positive influence for markets. 

Lee Wild, Head of Equity Strategy, interactive investor, says: "With less than a month to go until election day, it is no surprise that UK investors are consumed by domestic issues. That so many have moved to the safety of cash, and one-third of investors have decided to sit on their hands until the election result is known, is hugely significant. But they are not the only ones. Many fund managers, especially in the small-cap space, are running higher levels of cash than normal, and for the same reason. It is clear from these numbers and anecdotal evidence that any clarity on EU withdrawal after December 12th could provide a significant boost to UK assets."