The State Street Investor Confidence Index (ICI) has decreased to 84.8 globally, down 9.2 points from June’s revised reading.
The North American ICI was down 9.1 points to 76.7, while the Asian ICI was down 13.7 points to 86.7 – both the largest regional declines.
The European ICI fell by a much smaller margin, dropping to 117.8 from 119.9.
Marvin Loh, senior macro strategist at State Street Global Markets, said risk appetite pulled back this month after reaching the multi-year highs recorded in June, although this still made July the second strongest showing for the ICI in a year.
“While economies continued to open, the mounting number of virus cases in the US and across various emerging markets tempered last month’s positive momentum,” Loh said.
“The European ICI fell the least, as the virus remains more contained than other parts of the world.
“Interestingly, sentiment in Asia also deteriorated even though the region was the first to emerge from lockdown, as a prolonged economic recovery may now be impacting investor outlook.”
The ICI was developed to measure investor confidence or risk appetite quantitatively by analysing the buying and selling patterns of institutional investors, in partnership with FDO Partners.
The greater the percentage allocation to equities, the higher risk appetite or confidence; a score of 100 was neutral.
The index differed from survey-based measures as it was based on actual trades, rather than opinions of institutional investors.