POWERED BY MOMENTUM MEDIA
Risk stance unchanged while confidence drops, says State Street
Investor confidence slumped in July but institutional investors have broadly maintained their stance on risk, according to State Street Associates founding partner Kenneth Froot.
The State Street Investor Confidence Index fell 2.6 points in August from 107.7 to 105.1.
Although all regions saw declining confidence levels, the fall was mainly driven by European and Asian investors, State Street said, with European confidence falling 8.2 points to 97.1 and Asian confidence falling 7.6 points to 93.
North American investors fell 1.5 points to 112.5.
Froot said institutional investors had maintained their risk stance and only reported a modest pull-back.
"The consensus is certainly that monetary authorities in the US will shortly begin to cut back on the monetary stimulus that has been in place for some time now, but there is recognition that this will only occur in response to improved US fundamentals," he said.
"Certainly, the recently-announced policy that short-term interest rates will be tied to the rate of unemployment lends support to this view."
Countries with larger account deficits such as Brazil and India that experienced pressure on currency brought confidence down a notch in Asia, according to Froot.
Although investors quickly sold emerging market bonds, there was no evidence of depleting interest in emerging market equities — and a portion of cash freed up by fixed interest sales had been re-invested in equities, Froot said.
"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," he said.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum.
Institutional investors have entered November with their largest pre-election equity allocation in two decades, according to new data.
The sovereign wealth fund remains cautious of the impact of high inflation as it announces a strong return in its latest update.
Australia is becoming increasingly recognised as an attractive investment opportunity against global counterparts, recent analysis has found.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
