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Investor confidence increases 11.4 points in August to 107.7; largest increase in 18 months

01 Sep 2023
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State Street Global Markets has released the results of the State Street Investor Confidence Index® (ICI) for August 2023.

The Global Investor Confidence Index increased to 107.7, up 11.4 points from July’s revised reading of 96.3. The increase in Investor confidence was supported across all regions but was led by a 12.9 point rise in North American ICI to 103.8. Elsewhere, European ICI rose 4.3 points to 103.7 and Asian ICI rose 4.8 points to 102.2.

The Investor Confidence Index was developed at State Street Associates, State Street Global Markets 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. “Investor confidence saw its biggest jump in 18 months, with the Global ICI now solidly in risk-seeking territory, as risk appetite improved in every region this month,” commented Marvin Loh, senior global macro strategist at State Street Global Markets. “The improvement was led by North America, which recorded its strongest reading in a year on the heels of falling recessionary concerns. A pair of better than expected CPI prints have also supported the view that a soft landing was possible. While the monthly gain was not as strong in Europe, this regional ICI bounced back above 100, as overall disinflation started to accelerate, with a tenuous economic backdrop holding back further gains.

Asia ICI showed a similar investor dynamic, improving back towards moderate risk appetite, although China’s economic challenges impacted further gains.” The index is released globally at 10 a.m. Eastern time in Boston on the last Wednesday of each month.

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