Investors remain cautious in September

<p><strong>Institutional investors continue to shy away from risky assets, with the State Street Investor Confidence Index recording a drop in September.</strong></p>
<p>The ICI fell from August's revised reading of 91 to 86.9. A reading of 100 is neutral – it is the level at which institutional investors are neither increasing nor decreasing their exposure to risky assets.</p>
<p>North American investor confidence fell for the third consecutive month, falling from August's reading of 84.3 to 81.1.</p>
<p>Harvard University professor Kenneth Froot, who co-founded the index, said the continued decline in North American confidence was &quot;puzzling&quot;, given recent announcements by policymakers on both sides of the Atlantic.</p>
<p>Asian investor confidence was also down, with the Asian ICI dropping 5.6 points to 87.6.</p>
<p>European investors provided the only positive note in September, with their ICI up 4 points from 101 in August to 105 in September.</p>
<p>&quot;It is clear that in their actual portfolios, institutional investors continue to exhibit caution, given the global growth backdrop,&quot; Froot said.</p>
<p>Paul O'Connell from State Street Associates, who co-founded the index with Froot, said that despite the largely negative sentiment there was a &quot;pronounced improvement in tone&quot; from the first week of September onwards.</p>
<p>&quot;Nonetheless, the reallocations away from risky assets early in the month were large enough to outweigh the later stabilisation. As with last month, emerging markets continue to attract some positive inflows,&quot; he said.</p>

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