Investor confidence in Australian shares has increased by 4.9 per cent in March despite the ongoing federal election campaign and mounting international concerns about a slowdown in global economic growth, according to data released today.

The latest Global Proxy-Melbourne Institute Shareholder Confidence Index survey, a leading indicator of the performance of Australian shares, revealed a rebound from the 10 per cent fall in May when the previous results were published. The reversal, to 117 points, occurred as respondents expected an improvement in returns during the next 12 months and a decrease in volatility.

"On balance, shareholders are more confident about the market right now than they are about its future performance," said Melbourne Institute's Professor Guay Lim.

"One might have expected a fall in confidence at the moment because of uncertainty surrounding the election, but that doesn't seem to be worrying investors. It is possible that the pause in interest rate hikes is helping to boost sentiment."

The survey was carried out nationally between August 5 and 7 this year and involved 1600 respondents.

Two components of the overall index, showing current confidence and expected confidence levels, show that the buoyant attitude may not persist. Current confidence increased by 12.2 per cent to 103.4 points, while expected confidence recorded a slight decline of 0.2 per cent to 130.7 points.

Confidence levels went up depending on the level of share market experience held by respondents. People with experience of 31 years or more showed an increased confident level of 10.8 per cent, compared with those who had invested for 0-10 years of 5.7 per cent and 11-20 years of 1.5 per cent, the survey said.