The State Street Global Investor Confidence Index increased to 86.1 in August, up 1.5 points from July’s revised reading of 84.6.
Investor Confidence rose across all regions, with North American ICI up 1.0 point to 77.6, Asian ICI up 3.3 points to 89.9, and European ICI up 4.8 points to 122.6.
The Investor Confidence Index was developed at State Street Associates, State Street Global Markets’s research and advisory services business, in partnership with FDO Partners. It measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.
“Global risk appetite remained largely unchanged in August as investors continue to closely monitor the number of new Covid-19 cases and their impact on global growth,” says Rajeev Bhargava, head of Investor Behaviour Research, State Street Associates. “While US equity markets hit new highs, institutional investors seem more guarded, expressing a larger degree of restraint in August as the US ICI inched up only slightly to 77.6. Interestingly, Europe experienced a more pronounced uptick in sentiment despite weaker economic data and the onset of what appears to be the start of a second wave of Covid-19 in certain parts. A more constructive fiscal policy regionally is likely driving this response.”