As confidence grows investors are shifting towards investments with greater potential returns but property remains the top pick, according to a new survey.

Investor confidence has climbed to the highest recorded level since the ASB Investor Confidence survey began 12 years ago, according to figures released today.

The survey for the fourth quarter in 2009 showed a net 16 point increase in investors expecting a better rate of return over the next year, climbing to a record net 30%.

But ASB head of investment services Jonathan Beale said the result must be tempered by the fact the economy is recovering from a big low.

“Over the past 12 months we’ve shifted from the depths of recession and a record low in investor sentiment to the highest ever recorded optimism since this survey began.

“When you’ve dropped to such a low point, the only way left is up.”

He said the tide is turning for investors, with some now looking towards different investments for greater returns.

“The most optimistic respondents were those whose main investments lay in shares, followed by managed investments,” he said. “This shows a small but nonetheless significant shift.”

The most favoured investment classes remain those in favour since the financial crisis started.

Rental property increased in popularity over the quarter, up 2 points with 18% of respondents rating it as offering the best return - making it the most popular investment for three quarters running.

Bank savings accounts remained steady on 15%, while term deposits ranked third with 12%.

Not by KiwiSaver alone

A breakdown of respondents shows that almost half (48 percent) of those aged between 18 and 29 were confident that KiwiSaver alone would support them into retirement, however the vast majority of older age groups did not believe it would be sufficient.

“Young investors have time on their hands to build a significant pool of savings prior to their eventual retirement,” Mr Beale said.

“In contrast, the savings of those close to retirement will have been built up through avenues other than KiwiSaver, which is a very recent addition to the range of retirement savings options.”