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Dec 2025
Investors neutral amidst data uncertainty
Holdings Institutional portfolios remain heavily overweight in US equities and technology, favouring quality, growth and large caps, with stock allocations at an eighteen‑year high and bonds and cash still out of favour. Risk Appetite Risk appetite has eased to neutral as investors rotate out of cyclicals and commodities into defensives and the US dollar, while still taking selective risk in high yield credit and technology rather than retreating from equities.
Nov 2025
One Step Forward, One Step Back
Holdings Institutional portfolios remain heavily overweight in US, Tech, and growth oriented styles, with stock allocations at an 18-year high. Risk Appetite The risk appetite index has dropped to neutral as investors rotate out of cyclicals and commodities into defensives and the US dollar.
Oct 2025
Sentiment not falling into Fall
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities slightly increased, remaining at the highest level in sixteen and a half years. Risk Appetite The State Street Risk Appetite Index rose to 0.54 in October, resuming the risk seeking activity seen previously.
Sep 2025
Staying positive through the end of summer
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities slightly increased, remaining at the highest level in sixteen and a half years. Cash holdings declined 3bps, entirely driven by a 5bps inflow into equities. This was offset by an outflow of fixed income of 1.3bps into cash. Risk Appetite The State Street Risk Appetite Index rose to 0.36 in January, resuming the risk seeking activity seen previously before the pause in December.
Jul 2025
Risk Appetite is Back!
Holdings Institutional investors spent the month of June adding to their allocation to stocks – exposure to stocks increased by 0.7% and currently stands above the start-of-the-year level. The increase in allocation to stocks has been mainly funded by a lower allocation to cash – another pro-risk signal, while bond holdings remain virtually unchanged. Risk Appetite Institutional investors end the first half of the year on a high note – they are aggressively buying into risk as stocks are reaching ...
Jun 2025
Investors turn full circle
Holdings The State Street Holdings indicators show that long-term investor allocations to equities rose anew in May to levels last seen on the cusp of the Liberation Day announcement in early April. During May, exposure to equities rose by 0.9% relative to a 0.8% fall in bond holdings. Risk Appetite The State Street Risk Appetite Index rose to 0.36 at end-May, as investors moved back towards risk taking in the latter part of the month following deferral on the implementation of trade tariffs. ...
May 2025
A volatile round trip to neutral
Holdings The State Street Risk Appetite Index improved slightly to sit completely balanced by the end of April, as investors weathered significant tariff-related volatility in their stance towards risk assets. Risk Appetite The State Street Holdings indicators show that long-term investor allocations to equities did continue their reverse from the post-global financial crisis highs earlier in the year. However, during April, outflows from equities moderated from the sharp reduction in holdings ...
Apr 2025
Policy uncertainty weighs on risk-taking
Holdings The State Street Holdings indicators show that long-term investor allocations to equities have continued their reverse from the post-global financial crisis highs earlier in the year. During March, outflows from equities of 0.75% were offset by inflows into bonds and cash of 0.4% and 0.35%, respectively. Risk Appetite The State Street Risk Appetite Index fell to -0.09 in March, as investors continue their retracement from risk assets towards a more cautious and defensive multi-asset ...
Mar 2025
Back to Benchmark
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities fell sharply from close to their highest level in sixteen and a half years. Cash holdings were the main beneficiary of the move out of equities, rising by close to 0.5%, while fixed income holdings were flat over the month. Risk Appetite The State Street Risk Appetite Index fell back to 0 in February, as investors’ run of four consecutive months of risk seeking activity came to an abrupt end.
Feb 2025
Risk seeking among the noise
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities slightly increased, remaining at the highest level in sixteen and a half years. Cash holdings declined 3bps, entirely driven by a 5bps inflow into equities. This was offset by an outflow of fixed income of 1.3bps into cash. Risk Appetite The State Street Risk Appetite Index rose to 0.36 in January, resuming the risk seeking activity seen previously before the pause in December.
Jan 2025
Pause And Rebalance
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities were largely unchanged, remaining at the highest level in sixteen and a half years. Cash holdings rose a modest 10bps, which was entirely funded by a 13bps fall in allocations to fixed income securities. Risk Appetite The State Street Risk Appetite Index fell to -0.09 in December, breaking the four consecutive months of risk seeking activity seen previously.
Dec 2024
Exceptionally stretched
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities rose by a full percentage point to 53.8% the highest level in sixteen and a half years. This was funded by a 20bps fall in allocations to cash and a larger 80bps fall in holdings of fixed income securities. Risk Appetite The State Street Risk Appetite Index rose to 0.27 in November, the fourth consecutive month of risk seeking activity.
Nov 2024
Institutional investors positioned for change
Holdings Long-term investor allocations to equities fell back 39bps to 52.7%. Allocations to cash rose a similar amount (42bps) to 19.2% Fixed income holdings remained largely unchanged. Risk Appetite The State Street Risk Appetite Index remained positive at 0.18 in October. This was modestly less risk seeking than the 0.27 reading in September. Institutional investors were well-positioned for the market exuberance and USD strength that has followed the US election result.
Oct 2024
Institutional investors react to policy stimulus
Holdings Cash holdings fell to their lowest level since the beginning of August. Institutional investor allocation to bonds modestly rose. Stock allocations were unchanged on the month despite a pick-up in equity allocations towards month-end. Stock holdings still remain above long-term average. Risk Appetite The State Street Risk Appetite Index rose to 0.27 by the end of September. Appetite reversed mid-month weakness in risk-taking following a series of supportive policy announcements. The ...
Sep 2024
Institutional investors go out and into risk again
Holdings Institutional investors' allocation to cash has increased a little (55bps) during August, but remains not far from long-term averages. Institutional investors have responded to the sharp sell off in equity market in early August by reducing their allocations to stocks, despite the equity rally in the second half of the month. Institutional investors' allocation to bonds has also come down. Risk Appetite The State Street Risk Appetite Index picked up modestly at the end of August after ...
Aug 2024
Investors shift back to neutral during a hectic summer
Holdings Long-term investor allocations to equities rose 37bps to 53.6%. Allocations to fixed income rose 43bps to 27.9%. Cash holdings dropped 80 bps to 18.5%, the largest drop in cash holdings since last November. RiskAppetite The State Street Risk Appetite Index rose modestly to 0.00 in July as the risk off bias to flows in June faded. Institutional investors have proven hard to pull off the sidelines for most of this year and July proved no exception, with our breadth measure of risk sentiment ...
Jun 2024
Institutional investors cash out despite cyclical doubts
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities rose 33bps to 53.7%. Cash holdings well a further 0.4 percentage points to 18.4%, this is the first time in tenth months that cash holdings are below their long-term average. Fixed income holdings were left largely unchanged after their sharp rise last month. RiskAppetite The State Street Risk Appetite Index bounced back to 0.09 in May revealing a modest risk on bias across the month. Within this ...
May 2024
Institutional investor indicators; A timely turn on bonds?
Holdings Long-term investor allocations to equities and cash fell by 0.2 percentage points each to 53.3% and 18.7% respectively. Cash holdings are now back to their long-run average. Fixed income holdings rose 0.4 percentage points to 27.9%, the biggest monthly rise in fixed income allocations since March 2023. RiskAppetite Institutional investor risk appetite moderated in April, led by a surge in demand for the US dollar. Risk appetite in equities was more mixed, with weaker demand for high ...
Apr 2024
Institutional investor indicators; March pause as dry powder runs out
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities rose by 0.6 percentage points to 53.4%. Allocations to cash are within 0.3% of their long-run average. There was a tiny 0.1 percentage point rise in fixed income allocations to 27.5%. RiskAppetite The State Street Risk Appetite Index rebounded to 0.09 from 0.18 revealing a modest retreat in risk bias across the month of March back toward neutral. Our risk appetite index showed that investors remain ...
Mar 2024
Institutional investor indicators; FOMO February
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities rose by 1.2 percentage points to 52.8%. Cash holdings fell by almost a percentage point in February and are now only 1% above their long-run average suggesting investors’ ‘dry powder’ is rapidly running out. Institutional investor equity holdings are now at a seven-month high and are only a percentage point below their highest reading in a decade. RiskAppetite The State Street Risk Appetite Index ...
Feb 2024
Institutional investor indicators; Excessive optimism unwound?
Holdings The State Street Holdings Indicators showed that long-term investor allocations to equities fell by 0.2 percentage points to 51.6%. While cash holdings rose 0.6 percentage points to 20.5%. The allocation to fixed income fell by 0.4 percentage points to 27.9%. RiskAppetite The State Street Risk Appetite Index fell to -0.09 from 0.18, revealing a slight risk-off bias in January as institutional investors reevaluate the pace of rate cuts throughout 2024. Institutional investors demand for ...
1. Peter L. Bernstein Award for Best Article in an Institutional Investor Journal in 2013; Bernstein-Fabozzi/Jacobs-Levy Award for Outstanding Article in the Journal of Portfolio Management in 2006, 2009, 2011, 2013 (2), 2014, 2015, 2016, 2021; Graham & Dodd Scroll Award for article in the Financial Analysts Journal in 2002 and 2010. Roger F. Murray First Prize for Research Presented at the Q Group Conference in 2012, 2021, 2023. Harry M. Markowitz Award for Best Paper in the Journal of Investment Management in 2022, 2023. Doriot Award for Best Private Equity Research Paper in 2022.