FMS Investors – Biggest “Tail Risk” Concerns about geopolitical conflict have risen among FMS investors, with 33% now viewing it as the biggest “tail risk” for the global economy, primarily due to its potential negative impact on financial markets and investments. Image: BofA Global Fund Manager Survey
Sentiment – Risk Appetite and Expected U.S. Equity Market Performance In October, U.S. equity investors have shown an improved risk appetite. However, it remains in negative territory amid persistent worries about potential near-term market losses. Image: S&P Global Market Intelligence
Sentiment – Global Equity Risk-Love The Global Equity Risk-Love indicator, currently at the 68th percentile, has moved out of the euphoria territory, allowing for potential upside as we approach year-end. Image: BofA Predictive Analytics
Risk Appetite Indicator Level and Momentum Factors The risk appetite indicator remains negative, indicating a cautious sentiment among market participants who are prioritizing stability over aggressive growth strategies. Image: Goldman Sachs Global Investment Research
Global Market Implied Equity Risk Premiums Equity risk premiums are on the rise. Nevertheless, the low equity risk premium in the U.S. points to a challenging investment environment, implying that investors may not be sufficiently rewarded for the risks of equity investments. Image: Goldman Sachs Global Investment Research
FMS Investors – Net % Taking Higher than Normal Risk Levels In September, FMS risk appetite has significantly decreased, reaching a 11-month low. This decline reflects growing concerns among FMS investors regarding economic stability and market conditions. Image: BofA Global Fund Manager Survey
Sentiment – Global Risk Demand Index The Morgan Stanley Global Risk Demand Index indicates that investors’ risk appetite is very low, which can often be seen as a contrarian indicator, where extreme pessimism might signal a potential rebound in equity markets. Image: Morgan Stanley
Risky vs. Safe Assets Fund Flows Positive fund flows into risky assets, as opposed to safe assets, indicate a broader market sentiment in which investors are willing to accept higher risks for potential gains. Image: Goldman Sachs Global Investment Research
Risk Appetite in Flows After Adjusting for Seasonality and Cyclical Growth Market sentiment is currently robust, with risk appetite in flows at the 85th percentile, falling short of extreme levels. Image: Deutsche Bank Asset Allocation
Risk Appetite Index As investors embrace a more aggressive stance, the risk appetite indicator is back to elevated levels, signaling a willingness to take on higher levels of risk for potentially greater returns. Image: Goldman Sachs Global Investment Research