State Street Quarterly Brexometer Index Reveals Latest Investor Sentiment towards Brexit

Thursday, February 15, 2018 11:19 am EST

Dateline:

London

Public Company Information:

LSE:
STT
"Investors are more concerned about holding UK assets at time when they are becoming increasingly optimistic about the global economy"

LONDON, February 15, 2018 State Street Corporation (NYSE: STT) today launched the latest findings from its Brexometer Index, a quarterly pulse survey of institutional investor sentiment on the economic impact of Brexit.

The Q1 2018 survey1 indicates an increase in confidence, with 55 percent of respondents expecting positive global economic growth in the near-medium term (three to five years), a 15 percent increase from the Q4 2017 survey2.

However, despite increasing optimism towards the global economy, the survey suggests that 24 percent intend to reduce their holdings of UK assets in the next six months. This is a six percent increase from Q4, and greater than the average throughout 2017.

In addition, 37 percent of investors continue to believe regulatory reporting, such as that required under Solvency II and AIFMD, is the area that businesses will need the greatest help with following Brexit; a seven percent increase from Q4.

Other key findings of the Q1 2018 index include:

  • More than one third (35%) of respondents believe asset owners will increase their level of investment risk over the next three to five years, up 9% since Q1, 20173

  • 11% of respondents expect negative growth in the medium-term (three to five years), dropping 8% from Q4

  • The majority (87%) of institutional investors believe the economic impact of Brexit will have an impact on their business operating model, a 16% increase from Q3 30174

“Investors are more concerned about holding UK assets at time when they are becoming increasingly optimistic about the global economy,” said Michael Metcalfe, head of Global Macro Strategy at State Street Global Markets. “While a rising tide is supposed to lift all boats, the weight of Brexit uncertainty is now suppressing, although not yet submerging, attitudes toward UK assets.”

“Sterling remains undervalued against most currencies,” said James Binny, global head of Currency at State Street Global Advisors. “Against the Euro it has remained in narrow range recently, at a discount to fair value, which is likely to remain until greater clarity regarding Brexit emerges. The undervaluation against the US dollar has decreased, reflecting dollar weakness rather than sterling strength.”

View the full Brexit research report to understand its economic impact.

 

1 State Street Brexometer Index is a quarterly survey conducted by PollRight on behalf of State Street. For the Q1 2018 survey, 102 institutional investors participated globally during 8th January 2018 and 26th January 2018. The research will be conducted on a quarterly basis using the same questions and database to best measure how sentiment towards Brexit is evolving.

2 For the Q4 2017 survey, 100 institutional investors participated globally during September 2017 and October 2017

3 For the Q1 2017 survey, 111 institutional investors participated globally during December 2016 and January 2017.

5 For the Q3 2017 survey, 103 institutional investors participated globally during June 2017 and July 2017.

 

About State Street Corporation

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors, including investment servicing, investment management and investment research and trading. With $33.10 trillion in assets under custody and administration and $2.78 trillion* in assets under management as of December 31, 2017, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street’s website at www.statestreet.com.

* AUM reflects approx. $35 billion (as of December 31, 2017) with respect to which State Street Global Advisors Funds Distributors, LLC (SSGA FD) serves as marketing agent; SSGA FD and State Street Global Advisors are affiliated.

State Street Corporation, One Lincoln Street, Boston, MA 02111-2900


The information contained in this communication is not a research recommendation or ‘investment research’ and is classified as a ‘Marketing Communication’ in accordance with the Markets in Financial Instruments Directive (2014/65/EU) or applicable Swiss regulation. This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research. 

State Street is not affiliated with PollRight.

Investing involves risk including the risk of loss of principal.

 

Tracking Number 2024632.1.1.GBL.PR

Expiration date: 02/28/2019

Contact:

Lydia Cambata
020 395 7319
lcambata@statestreet.com
@StateStreet

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