Institutional investor confidence dropped this month as the failed coup in Turkey and the aftershocks of the Brexit vote took their toll, according to State Street.
The global State Street Investor Confidence Index (ICI) fell by 7.7 points to 98, down from June's revised reading of 105.7.
The ICI measures institutional investor trades to determine changes in risk appetite. A reading of 100 is 'neutral' and indicates investors are neither increasing nor decreasing their long-term allocations to risky assets.
Accompanying the fall in the global ICI, the North American ICI dropped by 5.9 points to 99.9 while the Asian ICI fell 5.2 points to 108.
ICI developer Kenneth Froot said the July numbers signal "unequivocally" a decline in institutional investor confidence.
"Not surprisingly, risk aversion surged as market participants grappled with the wider implications of Brexit and Turkey’s recent geopolitical turmoil," Mr Froot said.
"Global growth prospects, while being already lacklustre, have worsened, and institutional investors responded by putting the accumulation of risky assets on hold," he said.
State Street Global Exchange's executive vice-president, Jessica Donohue, said the "major setbacks" in July were Europe-based institutional investors who were caught off guard by the Brexit referendum in June.
"Brexit is a visible sign that globalisation has come under heavy political pressure, and market participants are only in the first innings of assessing the impact of anti-globalisation measures on economic growth," Ms Donohue said.
Institutional investors in Asia are still optimistic, however, with a reading above the neutral setting of 100, she said.
"The positive sentiment was likely driven by good news out of China, with its Quarter 2 GDP growth beating consensus," Ms Donohue said.