Investors across all regions experienced increased appetite for risk in March, with the State Street Investor Confidence Index (ICI) increasing to 111.9 last month, up 4.8 points from February.
The Index, which measures investor confidence quantitively the buying and selling patterns of institutional investors, showed that investors globally were more willing to expose themselves to risk than they were earlier in the year.
The North American ICI rose 5.8 points from February to March, hitting 109.8. The European ICI grew 1.6 points to 102.1 and the Asian ICI jumped 1.3 points to 109.6.
A reading of 100 is neutral, meaning that investors are neither increasing nor decreasing their long-term allocations to risky assets.
“After a volatile February, institutions seemed to have re-embraced risk in March, with the ICI rising across all the regions we track,” Kenneth Froot, co-creator of the index, said.
The State Street Global Exchange warned that the growth in appetite for risk may not be sustained though.
“Increasing rhetoric over protectionist policies and fears over a potential trade war are still festering and have the potential to impact confidence,” Froot warned.
“Although the global ICI increased this month, it will be interesting to see if continued Federal Reserve tightening and recent money market stress … will impact investor sentiment going forward,” State Street Associate’s managing director and head of investor behaviour research, Rajeev Bhargava said.
Amid a challenging market environment, three super fund CIOs have warned against ‘jumping at shadows’.
The professional body is calling for the annual performance test to transition to a two-metric test, so it better aligns with the overarching duty of super fund trustees to act in the best financial interests of their members.
AustralianSuper, Rest, and HESTA agree on the need to retain and enhance the test, yet they differ in their perspectives on the specific areas that warrant further refinement.
Australia’s second-largest super fund has confirmed it is expanding its presence in the UK following significant investment in the region.
Add new comment