The risk appetite of global investors continued to rise in February despite dramatically higher levels of volatility, according to State Street Global Exchange.
A statement from State Street Global Exchange (SSGX) revealed that the February reading of its Global Investor Confidence Index (ICI) rose to 107.4 points, from January’s revised reading of 103.0 points.
January represented the first uptick in global investor confidence since mid-2017.
In February, the North American and Asian ICIs performed strongly, rising 6.1 points to 104.4 points and 7.8 points to 108.5 respectively, while the European ICI fell by 12.9 points, dropping to 100.6 points.
ICI co-developer Kenneth Froot said February had been “far from boring”.
“Global markets witnessed inflation concerns and growing fears about the pace and degree of rising rates,” he said.
“However, it appears that the return of market volatility did not suppress institutional investors’ risk-seeking appetite.”
State Street Global Markets senior managing director and head of multi-asset strategy for Americas, Lee Ferridge, said investors overall “showed resilience” after volatility in February, but remarked upon the “divergence in regional performance”.
“The market gyrations were led by the US but it appears that this impacted European investors more than those in North America and Asia.
“This divergence is certainly notable and worth watching in the months ahead,” Mr Ferridge said.
The SSGX ICI measures investor confidence by analysing buying and selling patterns of institutional investors. A reading of 100 is neutral (neither increasing nor decreasing allocations to risky assets), with a higher reading signifying greater risk appetite and vice versa.
Wealth management relationships are under threat as clients look to switch providers driven by the impact of the royal commission. ...
S&P Dow Jones has announced a new addition to its global ESG index using enhanced ESG scores and granular data. ...
Investor confidence is on the rebound and the ASX hit a 12-year high on Monday. But it’s not all good news for the Australian economy. ...