Political dramas in Washington, concerns about valuations of AI-linked tech stocks and a shift from concentrated positions meant that there were few big risk changes last month.

The risk appetite for investors around the world dipped in November from a month before, with economic uncertainties – such as Big Tech valuations and the US government shutdown – reducing investors' appetite to take significant positions.

A barometer of investor behaviour from State Street Markets, based on their buying and selling, shows that The State Street Risk Appetite Index declined by 0.09 points in November.

Equity holdings fell slightly last month, State Street said.

Cash holdings and fixed income gained slightly. Overall, institutional investors remain hesitant to reallocate their portfolios until additional data provides greater clarity.

“Several notable trends emerged from investor behaviour in November. Firstly, institutional investors predominantly maintained neutral positions. The uncertainty arising from the government shutdown led to reduced market conviction. Consequently, investors hesitated to implement significant portfolio adjustments as they await clearer economic data,” Noel Dixon, senior macro strategist, State Street Markets, said. 

“Additionally, long-term investors continue to hold a high concentration of equities in US technology stocks. However, some have started to diversify their portfolios by investing in Europe and China. Despite this, allocations to broader emerging markets remain relatively low,” Dixon continued. 

“Finally, investors continue to avoid fixed income. Despite uncertainty in recent US economic data due to the government shutdown, US treasuries did not see significant inflows. In the Asia-Pacific region, Australia fixed income attracted the most investment, mainly from local investors. By contrast, Singapore fixed income experienced the largest outflows. Overall, equities remain investors' preferred asset class, while cash is a distant second choice,” he added.

State Street’s data is drawn from the buying and selling patterns of institutional investors derived from State Street’s $51.7 trillion in assets under custody and administration (as of 30 September 2025).

The Risk Appetite Index is derived from measuring investor flows in 22 different dimensions of risk across equities, foreign exchange, fixed income, commodity-linked assets, and asset allocation trends. The index captures the proportion of the 22 risk elements that saw either risk seeking or risk reducing behaviour. A positive reading suggests that on balance investors are adding to their risk exposures, while a negative reading suggests risk reduction.