Bringing you live news and features since 2006 

State Street Ken Froot

Investor confidence down 3.4 points in December to 94.2


State Street Global Exchange’s global Investor Confidence Index (ICI) decreased to 94.2 in December, down 3.4 points from November’s revised reading of 97.6. 

The decline in sentiment was driven by the 6.7 point decrease in the Asian ICI to 109.1 along with the 6.0 point decline in the North American ICI to 87.5. By contrast, the European ICI rose 13.7 points from 86.4 to 100.1.

The Investor Confidence Index was developed by Kenneth Froot (pictured) and Paul O’Connell at State Street Associates, State Street Global Exchange’s research and advisory services business. It measures investor confidence or risk appetite quantitatively by analysing 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.

“The global ICI finished on a weak note in 2016 as institutional investors continue to shy away from equities,” says Froot. “Heading into 2017, investors are likely looking for greater clarity on their over-arching concerns regarding a Trump presidency and the hawkish tilt that accompanied the Fed's December rate hike.”

“While markets increasingly look to be ‘price for perfection’ over the US economic outlook for 2017, it is interesting that institutional investors are more circumspect,” adds Lee Ferridge, head of macro strategy, North America. “Most noteworthy for me is the decline in the North American index even as US equities and the US dollar continues to rise.”

"It is telling that the confidence of European investors rose in December in spite of the no vote in Italy's referendum,” says Michael Metcalfe, senior managing director and head of Global Macro Strategy, State Street Global Markets. “This suggests investors are perhaps learning to live with political risk and adjust their portfolios accordingly.

Latest News

As the ETF industry reaches a milestone of USD12.71 trillion in global assets, Brown Brothers Harriman writes that its 2024..
Matteo Greco, Research Analyst at Fineqia International writes that bitcoin closed last week at approximately USD66,300, marking a 7.8 per..
HSBC Asset Management’s (HSBC AM) ETF and Indexing business has passed USD100 billion in assets under management (AUM), reflecting its..
Amundi’s ETF Market Flows Analysis for April reveals that investors added EUR54.1 billion to global ETFs in April with equities..

Related Articles

Dan Miller, IQ-EQ
With just over a week to go till T+1 settlement begins in North America, Canada and Mexico, time is of...
Emily Spurling, Nasdaq
Last October’s ETF Express US Awards 2023 found Nasdaq winning Best Index Provider – ESG ETFs and Best Index Provider...
Vinit Srivistava, MerQube
Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment...
Sean O' Hara
Pacer ETFs has announced the launch of three Cash Cows UCITS ETFs. The firm writes that this will give European...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by