Investors’ confidence rose at the end of 2020, with the State Street Investor Confidence index (ICI) going up in December by 13.3 points to 104.1 compared to 90.8 in November, thanks to the release of COVID-19 vaccines, prospects of a fresh stimulus package out of the US and post-election certainty.
The North American ICI rose 15.9 points to 103.5 and the Asian ICI increased 17.4 points to 112.6 while the European ICI fell for the fourth straight month, down 4.6 points to 87.2.
“As an overwhelming 2020 finally drew to a close, investors ended the year on more optimistic footing with the Global ICI recording its highest reading in over two years,” commented Rajeev Bhargava, head of Investor Behaviour Research for State Street Associates.
“However, as COVID cases continue to surge globally, we will need to see if the momentum persists into the new year as more data becomes available on the vaccines’ overall effectiveness, but certainly December’s reading of global sentiment is a good supporting datapoint that we may be heading in the right direction.”
The ICI, developed at State Street Associates, State Street Global Markets’s research and advisory services business, in partnership with FDO Partners, measured investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors.
A reading of 100 was neutral and indicated the level at which investors were neither increasing nor decreasing their long-term allocations to risky assets.