Despite market worries, long-term investor sentiments improved at the end of 2023, according to State Street Institutional Investor Indicators.
At the end of December, long-term investor sentiments improved, according to the State Street Risk Appetite Index which rose from zero to 0.24. Cash allocations fell 0.3 percent to 19.9 percent while equity and fixed income holdings rose 0.2 percent to 51.8 percent and 0.1 percent to 28.2 percent, respectively.
«Asset managers begin 2024 in aggregate overweight both equities and cash, counterbalanced by an underweight in fixed income securities,» said Michael Metcalfe, head of macro strategy at State Street Global Markets.
«So if this year does deliver slower growth, continued disinflation and eventual interest rate reductions, this should be supportive of a rebalancing back toward fixed income.»
Asia Outlook
Within Asia, State Street noted broad-based improvements in investor sentiment as well.
«Despite continued concerns about global and Chinese growth in particular, institutional investor risk appetite improved again in December,» Metcalfe added.
«The improvement in risk appetite was broad-based, with asset manager flows into cyclical sectors, high yield US corporate credit and some emerging market equities, in particular India, Indonesia and Korea. Demand for Chinese equities remained close to average levels. Meanwhile demand for safe haven assets, in particular the US dollar, continued to be reversed.»
