Confidence in the US booms

The US has more than doubled in popularity among investors since September last year, the latest research from the Association of Investment Companies (AIC) shows.

A survey of more than 800 high net-worth investors indicated that 14 per cent consider it the most attractive regional sector, compared with just 6 per cent last year.

"This is the greatest display of confidence towards the US in the several years that the AIC has gauged active investor views," the body said.

The research follows the AIC’s end-of-year fund manager poll in December, which found the US was tipped as the second most likely region to outperform this year.

"You most definitely can't ignore the world's largest economy. At the end of 2011, investment company managers tipped the US to be one of the best performing regions this year, and it is interesting to see that active investors are taking a similar position," said Annabel Brodie-Smith, communications director at the AIC.

"With an upturn in the US jobs market lifting confidence they may well be right. Investor confidence is relatively stable but more active investors are inclined to invest in equity ISAs this year, perhaps reflecting the demand for income in this low interest rate environment."

"The UK is still the most popular region for investors but emerging markets and the Asia Pacific are hard on its heels, reflecting the significant rise in popularity of these regions over the last five years."

The study also found that more active investors are inclined to make use of equity ISAs this year. Twenty-six per cent plan to use both the cash and shares element of their tax-efficient wrapper, compared with 24 per cent last year, and 39 per cent plan to use just the shares element of their ISA.

While prospects for the US have risen significantly in the eyes of active investors, the UK is still the favoured destination for its residents' cash.

"The UK has consistently topped the popularity tables over the years, but attitudes have shifted dramatically. Five years ago, three-quarters of active investors considered the UK the most attractive region and while it remains the most commonly cited region expected to outperform, the figure has now shrunk to 20 per cent," the AIC explained.