Though the Investor Confidence Index (ICI) for both Europe and Asia rose in September, the 6.3 point drop in the North American ICI contributed to the overall global decline in investor sentiment this month.
The ICI tracks risk appetite by analysing institutional investors' buying and selling patterns, with a reading of 100 meaning "investors are neither increasing nor decreasing their long-term allocations to risky assets".
State Street Investor Confidence Index co-developer Kenneth Froot said the regional breakdown revealed “rather diverging paths”.
“Confidence has strengthened in Europe and Asia on the back of optimistic economic conditions,” he said.
“However, it has weakened in North America with renewed geopolitical concerns and the Federal Open Market Committee’s pivotal decision to gradually trim its $4.5 trillion portfolio.”
State Street Associates managing director and head of investor behaviour research Rajeev Bhargava said, “The risk appetite narrative of recent months has been revolving around monetary policy rhetoric from major central banks.
“While global equity markets appeared to be unnerved by the Fed’s announcements of balance-sheet reductions, overall investor sentiment has declined.”
The drop in September follows the 2.1 point decline of the previous month.
