KEY POINTS:
Investors now see term deposits as providing a better return than any other investment class.
The finding comes in ASB's latest quarterly Investor Confidence survey.
For the first time in the survey's eight-year history term deposits came out on top, with a net 21 per cent of those
surveyed saying they believed term deposits offered the best return.
That was five percentage points ahead of the next most popular investment, bank savings accounts.
Rental property came in at number three with 15 per cent support, but it continued to lose popularity and was down a percentage point on the second quarter survey.
ASB's head of investment services Jonathan Beale said term deposits had traditionally been seen as a conservative investment choice, but since the last quarter of 2007 their appeal had been rising.
"Investors are clearly making a distinction between term deposits with institutions such as banks and those with finance companies," he said.
The survey was completed before the announcement of the Government's retail deposit guarantee scheme. Beale believed this development would strengthen the attraction of term deposits and bank savings.
"People are looking for a safe haven for a while. With a guarantee that's certainly helping but it's changing every day, new bits of news of the guarantee are coming out so we're still not quite sure exactly what it all means."
He was not surprised rental property retained a degree of support, as investors in this category tended to take a long-term view and rent levels were stable. It was still way ahead of other investment options such as publicly listed shares, which attracted 8 per cent support, and managed funds and unit trusts, on 10 per cent.
The attraction of KiwiSaver stayed constant, at 4 per cent support.
The level of investors who intended to use KiwiSaver as their primary means of saving increased by 5 per cent to 45 per cent, a result Beale said was "great news".
The survey showed that investor confidence had risen to a net positive 3 per cent for the quarter, but Beale said this would not be the case if the survey was taken today.
"A breakdown of the monthly results shows that while July and August confidence was on the rise, in September confidence declined dramatically to its lowest level since November 2002."
MOST POPULAR
* Term deposits - 21 per cent support.
* Bank savings accounts - 16 per cent.
* Rental property - 15 per cent.
* Shares - 8 per cent.
