State Street’s global investor confidence index (ICI) revealed further increases in risk appetite in March, rising to 111.9 points from February’s revised reading of 107.1, according to a statement.
The North American, European and Asian ICIs all rose, by 5.8 points, 1.6 points and 1.3 points to 109.8, 102.1 and 109.6 respectively, the statement said.
ICI co-developer Kenneth Froot noted that February had been a volatile month.
Since then, “institutions seemed to have re-embraced risk in March, with the ICI rising across all the regions we track”, Mr Froot said.
“However, increasing rhetoric over protectionist policies and fears over a potential trade war are still festering and have the potential to impact confidence.”
State Street Associates managing director and head of behaviour research Rajeev Bhargava commented, “Although the global ICI increased this month, it will be interesting to see if continued Federal Reserve tightening and recent money market stress, highlighted by rising US LIBOR-OIS spreads, will impact investor sentiment going forward.”
The ICI, released on the last Tuesday of every month, is an index developed by SSGX’s research and advisory arm State Street Associates and measures investors’ risk appetites by analysing their buying and selling patterns.
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.
