Investor mood brightened in May
With the exception of Europe, investor behavior has shown that they are more optimistic about the direction of the markets in May.
A measure of the buying and selling habits of global investors shows they grew more confident in May, with North American and Asian investors leading the way.
The Global Investor Confidence Index, released by State Street Global Markets, part of State Street, rose to 97.9, up 5.4 points from the April revised reading of 92.5 . The rebound in investor confidence is explained by a 6.0 point increase in North American investor confidence to 97.8. Asian investor confidence also rose substantially, rising 9.0 points to 100.8. The European ICI, however, fell by 1.2 points to 93.0.
The index quantitatively measures investor confidence or risk appetite by analyzing the actual buying and selling patterns of institutional investors. The index assigns precise meaning to changes in investors’ risk appetite: the higher the percentage allocation to equities, the higher the risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors do not increase or decrease their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on actual transactions, as opposed to the opinions of institutional investors.
“Investors’ risk appetite improved from its biggest margin of the year in May, largely supported by reopening optimism in the wake of wider access to immunization, particularly in advanced economies, ”said Marvin Loh, senior macro strategy strategist at State Street Global Markets.
“Rising yields, which had sparked investor concern earlier this year, have been broadly flat recently, contributing to positive gains in investor confidence in North America and Asia, even despite persistent deployment issues. vaccines in Asian countries. In contrast, European investors saw a slight contraction in confidence this month as gains on the vaccination front resulted in slightly higher returns, ”Loh said.