Chart of the Week and Weekly Report Highlights
This week: REITs, institutional investor positioning, 2021 asset class returns, real estate sentiment, energy stock valuations and fundamentals
This email provides a look at what we covered in the latest Weekly Insights report
The weekly insights report presents some of the key findings from our institutional research service, providing an entrée experience (in terms of price and size).
Chart of the Week - European Investors go Risk-OFF
European Institutional Investor Confidence Plunged: As noted in the latest Weekly Insights report, the State Street global Investor Confidence index plunged in December — but most notable was the huge drop amongst European investors as the chart below shows.
As a reminder the index: “measures investor confidence or risk appetite quantitatively by analyzing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.“
The key driver of the drop was likely the Fed pivot to accelerating taper and acknowledgement of likely rate hikes in 2022. But especially for Europe the Omicron variant of Covid triggered market volatility with many countries reintroducing restrictions as case counts surged. Despite those issues though, 2022 does appear to have a incrementally more headwinds to contend with e.g. monetary stimulus removal, inflation, and fiscal tightening. So perhaps the late-year de-risking makes a bit of sense in that context.
Key point: European institutional investors significantly reduced risk in December.
If you haven’t already, be sure to subscribe to our paid service so that you can receive the full reports ongoing (along with access to the archives, monthly asset allocation review, and Q&A).
Topics covered in the latest Weekly Insights Report:
REITs on Top: what’s been driving the solid performance by REITs
REIT allocations & sentiment: insights on investor positioning
Institutional Investor positioning: what are they doing and why
2021 Asset Class returns in review: the winners vs the losers
Energy Sector Equities: where valuations sit and the RvR outlook
A Surprising Energy Sector Chart: partly obvious, partly obscure!
Subscribe now to get instant access to the report so you can check out the details around these themes, as well as gaining access to the full archive of reports.
Thanks for your interest. Feedback and thoughts welcome.