Institutional investors remained broadly positive this month, according to a leading indicator of market conditions, State Street’s Global Investor Confidence Index. European investor confidence slipped somewhat, but remained in positive territory, while Asian investors crossed the threshold into positive territory for the first time since November 2021.
The September 2022 global index was 108.8 points, compared to 107.3 in August 2022, 102.2 in July 2022 and 106 in September 2021.
A score above 100 indicates positive institutional investor sentiment and below 100 signals a negative view.
The regional index for Europe was 100.1 points in September 2022, compared to 106 in August 2022. North America was up from 106.5 to 109, while the figure for Asia-Pacific rose from 92.4 to 100.1.
“As anticipated, European investors were rattled by a continued energy crisis, diminishing growth prospects and hawkish global central banks,” Cayla Seder, macro strategist with State Street Global Market’s multi-asset strategy team, on 28 September. “Going forward, it will be important to monitor whether the dip in European investor confidence persists given the market’s negative reaction to the UK’s recent fiscal plans. Overall, the increase in the September Global ICI can be largely attributed to Asia-Pacific investors as risk appetite grew in tandem with the reopening of borders and easing of restrictions in Macau and Chengdu China.”
According to State Street: “A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.”
State Street has a large business as a bank for institutional investors, with $38.2trn in assets under custody or administration. Its own fund business has €3.5trn in assets under management, as of 30 June 2022. The firm employs 40,000 staff globally, including roughly 1,000 in Luxembourg.