European institutional investors displayed a lower appetite for risk in March, while risk appetite among Asian institutions grew strongly.
In contrast, risk sentiment remained steady among American institutional investors, according to an index of investor confidence by State Street.
“Policy and credit fears in China failed to dampen sentiment amongst Asian institutional investors,” says Jessica Donohue, senior managing director and head of research and advisory services, State Street Global Exchange. “Our data suggests that institutions continue to add risk in the region in the face of mounting policy pressures.”
Kenneth Froot, who co-developed the index, says that despite the decline in risk appetite in Europe, institutions have largely maintained their allocations to global equities.
“Geopolitical risk in the Ukraine, Turkey and other emerging markets has yet to have a significant negative impact on institutional investor behaviour,” he says.
The State Street Investor Confidence Index is a quantitative index based on trading patterns.
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