Long-term investors were neutral on risk assets over the past month, according to State Street Global Markets in its State Street Institutional Investor Indicators for August.
The State Street Risk Appetite Index showed improved appetite for some cyclical equities and evidence of lower equity borrowings, offset by continued defensive behavior in fixed income and a return of defensive behavior in FX markets, in particular the resumption of USD buying.
This marked a reduction in risk appetite following a more positive outlook in July.
“There was good and bad news from investor behavior in August. The large jump in allocations to cash reflects continued uncertainty surrounding the market outlook along with the lingering risks of concurrent declines in equity and bond markets that so dogged returns last year,” commented Michael Metcalfe, head of macro strategy at State Street Global Markets.
The August holdings indicators showed the biggest jump