Marginal drop in global investor confidence
Global investor confidence took a fall in August, largely driven by caution in Asia and Europe, the State Street Investor Confidence Index (ICI) shows.
The ICI dropped from a revised July reading of 107.7 to 105.1 in August, but was still above the ‘neutral' reading of 100, where institutional investors are neither increasing or decreasing their exposure to risky assets.
European confidence fell 8.2 points to 97.1, while Asian confidence declined by 7.6 points to 93.
Kenneth Froot, who co-developed the index, described the overall index drop as "modest".
"Notwithstanding the turbulence in markets witnessed this month, especially in some emerging markets, institutional investors have broadly maintained their stance on risk, with only a modest pull-back seen in the global index," he said.
Paul O'Connell, the model's other co-founder, said any confidence losses were driven by countries with large current account deficits, such as Brazil and India.
"We do note, however, that while investors have been quick to sell emerging markets bonds, there is no evidence yet that their appetite for emerging markets equities is waning, and indeed a portion of the cash released by fixed income sales has been recycled into equities.
"We also note that flows to countries less exposed on the current account deficit side, such as China and South Korea, have been relatively strong."
AUTHOR
Staff Writer
Recommended for you
The latest budget papers have outlined a $10 million provision for ASIC greenwashing enforcement activity as well as funds for a sustainable labelling regime to be partially met by industry levies.
Betashares has expanded its fixed income solutions with the launch of a new ETF offering exposure to subordinated bonds issued by the big four Australian banks.
The latest monthly Bank of America global fund manager survey has found investors are starting to shift cash into bonds as cash allocations reach a three-year low.
AUSIEX analysis has discovered the net traded value of Australian dollar fixed income ETFs more than doubled from January to April, reflecting growing investor demand.
