Global investor sentiment remained upbeat in September – continuing its five-month upbeat run – with last month’s reading of the State Street Markets’ Risk Appetite Index remaining in positive territory.

September’s positivity equalled the index’s July’s 2025 peak, as investors continued to embrace risk ( see Figure 1 ), according to State Street Markets research.

Long-term investor allocations across equities, fixed income and cash were essentially unchanged though September illustrating that, even as global yield curves steepen, investors, according to State Street indicators, are not yet being tempted back into duration assets, with fixed income allocations remaining meaningfully light compared with their long-run averages ( Figure 2 ).

This concurs with State Street’s broader sentiment measures, which show that real money investors continued to embrace higher-beta assets ( that is, risk ) during September. 

“Despite heightened geo-political uncertainty in a number of major economies, somewhat mixed economic data and growing valuation concerns across a raft of pro-risk assets,” says Lee Ferridge, State Street Markets’ head macro strategy for the Americas, “[…] equity markets continue to make fresh all-time highs seemingly every day, and volatility measures remain subdued.

“This positivity was clearly boosted by the US Federal Reserve lowering interest rates in September for the first time this year, while also signalling that it would ease a further two times before 2025 is done, an extra cut compared with the message provided in June.

“Within the month, the asset allocation weight to equities, the riskiest class of assets, was virtually unchanged; while the same is true for allocations to cash and fixed income assets. Investors are overweight risk and happy to remain that way.”