Financial advisers more positive on UK shares -poll

By James Molony

LONDON, Dec 3 (Reuters) - British private investors are increasingly being told to consider investing in UK equities despite sustained and dramatic volatility in markets, a poll of independent financial advisers (IFAs) showed on Wednesday.

An index of investor intentions compiled from interviews with 100 IFAs showed 81 percent would advise investing in UK shares over the next three months, up from about 75 percent in the previous quarter.

The Virgin Money index also showed the proportion of IFAs likely to recommend investing in UK bonds rose to 79 percent from about 75 percent.

The results came in a quarter which saw the FTSE 100 slump to a low of 3,665 in October, down from 6,087 in May this year, as well as an interest rates cut to 3 percent from 4.5 percent.

Virgin's Scott Mowbray said although IFAs are happier to recommend those asset classes, "caution still reigns supreme".

That view was echoed by Mark Dampier, an IFA with Hargreaves Lansdown, who told Reuters he would recommend corporate bonds, gilts and high-yielding UK shares but remains wary.

"I can't say yet I'm super optimistic on the UK market as a whole because I wouldn't be surprised if it re-tests some of the lows," Dampier said.

He said corporate bonds are attractive with yields of 6 to 10 percent and with another UK interest rate cut likely on Thursday. "I think they already reflect a 1930s-type depression which I'm not sure we're at," he said.