Global Investors Less Confident, but U.S. Affluent Index Surges

March indicators reveal division in investors’ outlook on global markets by region

While some professional investors say they are less confident about the world’s equity markets, U.S. investors are upbeat on U.S. equities, according to two polls released on Tuesday.

The State Street Global Investor Confidence Index fell by 2.5 points in March to 120.2.

According to State Street, this decline was driven by a deterioration in the outlook of European institutional investors; the European index decreased 1.5 points to 108.6 in March.

But risk sentiment remained “resilient” in North America, the group says, and confidence among Asian investors increased; the Asian index rose 7.4 points to 114.3.

Geopolitical risk in the Ukraine, Turkey and other emerging markets has yet to have a significant negative impact on institutional investor behavior,” said Kenneth Froot, a founding partner of State Street Associates, in a press release. “Institutions have largely maintained their allocations to equities on a global basis. With no major negative news appearing on the economic front, sentiment remained unaffected during the period.”

“Policy and credit fears in China failed to dampen sentiment amongst Asian institutional investors,” added Jessica Donohue, senior managing director and head of research and advisory services, State Street Global Exchange (STT), in a statement. “Our data suggests that institutions continue to add risk in the region in the face of mounting policy pressures. The People’s Bank of China’s recent move to double the yuan trading band to allow for greater currency fluctuation, however, reflects policymakers’ commitment to financial liberalization reform.”

Affluent Americans

Meanwhile, the Spectrem Affluent Investor Confidence Index gained 9 points in March, recovering to 7. According to the research group, this is the highest month-to-month gain in six months.

The Spectrem Millionaire Investor Confidence Index increased 4 points to 9.

“Recent market rebounds are driving the current surge in affluent investor confidence and outlook,” said George H. Walper Jr., president of Spectrem Group, in a statement.

“The indices have seesawed in the last several months with market volatility,” he said. “The S&P 500 and Nasdaq are both higher this month and the Dow is only slightly lower than at the first of the year. Coupled with this are recent encouraging government economic reports, including a substantial decrease in initial claims for unemployment benefits, and a better-than-expected jobs report that was issued earlier in March.”

When asked about possible threats their achievement of their financial goals, the highest percentage of affluent investors mentioned the economy and market conditions and not the crisis in Ukraine or inflation.

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