Investor confidence slipped from record highs amid global financial turmoil, but has started to recover, according to a quarterly ASB survey.
The investor confidence survey fell 7 percentage points in the three months ended September, to a net 22 per cent of investors expecting returns to improve next year.
Confidence had surged in the previous quarter to its highest since the survey began in 1998, on the back of the introduction of the Government's KiwiSaver retirement savings scheme and higher interest rates for savings.
However, panic selling in August amid financial turmoil sparked by credit problems in the United States curbed investor enthusiasm, which began picking up again last month.
"Globally, the theme of the past three months has been a shift from years of underplaying risks in the chase for returns, to one of avoiding risk at all cost," ASB investment services head Jonathan Beale said.
"While the financial markets remain jittery, the general panic that prevailed in August has died away to wariness ... "
New Zealand was caught up in the credit crunch, with the dollar falling sharply as overseas investors sought safety elsewhere, and several finance companies failed.
Confidence in rental property investment was unshaken by recent interest rate rises, remaining the favoured investment category at around a net 22 per cent confidence.
Bank savings accounts rose in favour, up 5 points to a net 15 per cent confidence. Confidence in term deposits eased two points to 12 per cent, reflecting a preference for shorter term investments, Beale said.
Sentiment towards managed funds improved slightly over the quarter, with confidence rising 2 points to 13 per cent.
The survey was taken before the introduction of the new PIE taxation rules which came into effect at the start of this month.
The survey also found that awareness of KiwiSaver increased again, up four points to 94 per cent of respondents.
Seventy-six per cent of those believed it would encourage New Zealanders to save for retirement.