The State Street Institutional Investor Indicators provide investors, policymakers, and the public with insights into the aggregated and anonymized positioning, risk appetite, and portfolio carbon exposures of thousands of institutional investors around the world, representing trillions of dollars in assets.
The Risk Appetite Indicator quantifies the degree to which the trading patterns of institutional investors are risk seeking or averse, on a scale of -100% (most risk averse) to 100% (most risk seeking).
- The Institutional Investor Risk Appetite Indicator measures the buying and selling of risky assets across 22 dimensions of risk
- These range across asset classes: equities, fixed-income, cash, and foreign exchange
- Key dimensions include stock versus cash allocations, cyclical versus defensive equities, high-yield versus investment-grade corporate bonds, and US Dollar currency flows
- Released monthly
Holdings
Institutional investors spent the month of June adding to their allocation to stocks – exposure to stocks increased by 0.7% and currently stands above the start-of-the-year level. The increase in allocation to stocks has been mainly funded by a lower allocation to cash – another pro-risk signal, while bond holdings remain virtually unchanged.
RiskAppetite
Institutional investors end the first half of the year on a high note – they are aggressively buying into risk as stocks are reaching new highs. The State Street Risk Appetite Index stood at a high level of +0.36 at the end of June.