State Street Global Markets today released the results of the State Street Investor Confidence Index® (ICI) for June 2020..
Michael Metcalfe, head of Global Macro Strategy, State Street Global Markets.
The Global Investor Confidence Index increased to 94.3, jumping 21 points from May’s revised reading of 73.3.
North American ICI led the way, rising 18.8 points to 86.2, followed closely by the Asian ICI which was up 18.6 points to 100.0.
The European ICI was up double digits as well, rising to 119.7 from 108.5. The Investor Confidence Index was developed at State Street Associates, State Street Global Markets’s research and advisory services business, in partnership with FDO Partners.
It measures investor confidence or risk appetite quantitatively by analyzing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence.
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.
“Risk appetite saw a strong rebound in June. The Global ICI rose to 94.3, its highest level in almost two years, buoyed by higher sentiment across all regions,” commented Rajeev Bhargava, head of Investor Behavior Research, State Street Associates. “Unprecedented action by central banks combined with the reopening of major economies around the globe likely drove a more optimistic tone of investors. However, it will be important to see whether the positive momentum in sentiment endures as signs of a second wave in COVID infections drive volatility in asset markets.”