The State Street Investor Confidence Index (ICI) has dropped 3.6 points in November to 110.5, driven down by falls in North America and Europe which decreased by 5.3 points to 108.7 and 1.4 points to 95.3, respectively.
At the same time, Asia was up 4.8 points to 108.1, the firm said.
State Street Global Markets’ global macro strategist, Marvin Loh, said investor sentiment remained near its three-year high in November, although the global ICI eased off the strong levels recorded last month.
“The overall positive tone in risk assets pushed global equity bourses to multi-year highs, led by North America, with US equity investors looking past the start of Fed tapering, higher inflation readings and more aggressive rate hike expectations,” Loh said.
“Investors’ willingness to look through surging inflation will be key to maintaining the overall investor confidence that has emerged globally this year.”
The ICI was developed at State Street Associates in partnership with FDO Partners and measured 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, with a reading of 100 being neutral and indicating the level at which investors were neither increasing nor decreasing their long-term allocations to risky assets.