Investors in North America were the most confident in February, as risky asset prices deterred those from the rest of the world.
The Global Investor Confidence Index decreased to 92.9, down 1.6 points from January’s revised reading of 94.5. The decline in sentiment was driven by the 9.3 point decrease in the European ICI to 83.3, along with the 4.0 point decline in the Asian ICI to 104.0.
However, in contrast, the North American ICI rose 3.8 points from 90.9 to 94.7.
“In February, global institutional investors continued to shy away from risk despite the ongoing uptrend in risky asset prices,” commented Ken Froot.
“Interestingly, we note a striking disparity in risk tolerance between North American investors and other regions. It remains unclear whether this disparity stems from the relative dynamism of the US economy in the developed world, or from unrealistic Trumpian optimism on earnings and growth instead.”
The Investor Confidence Index, produced by State Street Corporation, measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors.
“Given the improving economic outlook across most regions, we would assume that the sharply weaker confidence captured by our regional index in Europe was driven by growing political concerns ahead of the upcoming elections in The Netherlands, France and Germany,” commented Michael Metcalfe, senior managing director and head of Global Macro Strategy, State Street Global Markets.