Bringing you live news and features since 2006 

Ken Froot

Investor confidence down by 3.4 points in October, says State Street


The State Street Global Investor Confidence Index decreased to 84.4 in October, down 3.4 points from September’s revised reading of 87.8.

Confidence among European investors waned, with the European ICI decreasing from 100.2 to 90.9. The North American ICI declined by 2.6 points to 81.8. Meanwhile, the Asia ICI dropped 0.3 points to 99.6.
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.
 “As major stock indices were hitting record highs near summer’s end, there were signs that institutional investors were reducing risk exposure. As we’ve progressed into fall, equities have declined further as the VIX has doubled. In the US, this month’s sell-off erased all 2018 year-to-date equity market gains. And amid concerns about high valuations and whether earnings may have peaked, some market participants seem to be anxious over a prolonged period of risk aversion,” says Kenneth Froot.
“The sharp downgrade our Investor Confidence Index recorded in September was one of the few early warning signs of the ensuing market turbulence that has followed. Confidence has fallen further in October and is more widespread, especially in Europe where not only are political risks rising, but growth is disappointing too.”
“The main difference this month is that the Investor Confidence Index is no longer alone in pointing to potential vulnerabilities; business and consumer confidence are also beginning to wobble too,” says Michael Metcalfe, senior managing director and head of Global Macro Strategy, State Street Global Markets.

Latest News

After a remarkably difficult 2022, fixed-income funds look to be back in favour with Europe’s investors as inflation fears begin..
CoinShares has announced the addition of two physically-backed Index ETPs to their growing range of crypto ETPs listed on Germany’s..
Just the two European launches this week with Fidelity bringing us a global government bond climate aware UCITS ETF and..
Ten new ETF solutions were launched for the week, each with a distinct value proposition for investors.  Detailed below are..

Related Articles

Vishal Kapoor, Bandhan Mutual Fund
ETF Express reported on a couple of ETF launches in India over the last couple of weeks, including the new...
ETF Awards
We are very pleased to bring you the winners in the 13th outing of the ETF Express European ETF Awards,...
Off the Record Episode 1
ETF Express is pleased to announce the launch of Off the Record, a new podcast series, in partnership with Truss...
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