Global investor confidence increases in August

The State Street Investor Confidence Index (ICI) has increased 1.5 points to 86.1, up from July’s revised reading of 84.6.

Investor confidence rose in all regions with North America up one point to 77.6, Asia up 3.3 points to 89.9 and Europe up 4.8 points to 122.6.

Rajeev Bhargava, State Street Associates managing director and head of investor behaviour research, said global risk appetite remained largely unchanged in August as investors continued to closely monitor the number of new COVID-19 cases and their impact on global growth.

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“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,” Bhargava said.

“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.”

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. 

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