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Institutional investors moved back towards risk-taking in late May following delays to trade tariff implementation, according to State Street's latest Institutional Investor Indicators.
" ["fulltext"]=> string(2502) "The State Street Risk Appetite Index rose to 0.36 at the end of May, reaching its highest level since early February.
Long-term investor allocations to equities rose in May to levels last seen in early April, with exposure to equities increasing 0.9 per cent while bond holdings fell 0.8 per cent.
"The month of May saw risk sentiment by institutional investors rebound to its highest level since early February," said Dwyfor Evans, Head of APAC Macro Strategy at State Street Markets.
"While the narrative around trade tariffs remains ubiquitous, implementation delays allied to lower effective tariff rates than initially envisaged helped lift sentiment towards risk as did the (still) largely benign environment for inflation that undermines fears around stagflation," he said.
Evans noted that by end-May, aggregate portfolio weights in equities had returned to levels last seen in the first week of April, representing a complete reversal of asset class preferences during the intervening period.
Cash holdings remained effectively unchanged over the course of the month.
"Protectionism and trade tariffs likely exert a greater impact on mercantilist Asia than anywhere in the global economy, particularly given the regional build-up of (predominantly) USD reserves," said Evans.
"A weaker USD and higher US yields thus matter, as do tariffs," he said.
The strengthening of the Taiwan dollar in early May partly reflected a policy towards regional currency appreciation to offset tariff threats.
This prompted a stronger return of investor capital to the region, particularly in regional equities and currencies, with the latter comprising a mix of surplus exporters and higher yielding currencies.
The Institutional Investor Indicators measure investor confidence by analysing the buying and selling patterns of institutional investors derived from State Street's US$44 trillion in assets under custody and administration.
The Risk Appetite Index measures investor flows across 22 different dimensions of risk including equities, foreign exchange, fixed income, commodity-linked assets and asset allocation trends.
A positive reading suggests investors are adding to their risk exposures, while a negative reading indicates risk reduction.
State Street's holdings indicators capture the share of investor portfolios allocated toward equity, fixed income and cash dating back to 1998.
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Institutional investors moved back towards risk-taking in late May following delays to trade tariff implementation, according to State Street's latest Institutional Investor Indicators.
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string(0) "" ["value"]=> string(0) "" ["rawvalue"]=> string(0) "" } } ["link"]=> string(80) "/invest-money/institutional-investors-return-to-risk-taking-as-tariff-fears-ease" ["image"]=> string(111) "https://res.cloudinary.com/momentum-media-group-pty-ltd/image/upload/v1751265327/pexels-rdne-7414212_yvi1al.jpg" ["image_alt"]=> string(66) "Institutional investors return to risk-taking as tariff fears ease" } [1]=> object(stdClass)#8159 (57) { ["id"]=> int(18685) ["title"]=> string(81) "Soul Patts and Brickworks plan $14 billion merger to create investment powerhouse" ["alias"]=> string(80) "soul-patts-and-brickworks-plan-14-billion-merger-to-create-investment-powerhouse" ["introtext"]=> string(196) "Soul Pattinson and Brickworks have announced a proposed merger that will create a $14 billion investment entity and end decades of cross-shareholding between the two ASX-listed companies.
" ["fulltext"]=> string(3887) "The deal will see Soul Patts shareholders control about 72 per cent of the newly merged entity, which will trade on the ASX as Washington H. Soul Pattinson under the ticker code 'SOL'.
Brickworks shareholders will hold 19 per cent of the company, with the remaining 9 per cent allocated to investors.
Currently, Soul Patts owns 43 per cent of Brickworks, while Brickworks holds a 26 per cent stake in Soul Patts.
The new entity will own investments across privately owned companies, publicly listed businesses, private credit, and more than $3 billion in real estate from Brickworks' land portfolio.
"Merging Soul Patts with Brickworks makes a lot of strategic and financial sense," said Todd Barlow, Soul Patts CEO and Managing Director.
"It simplifies the structure, adds scale, and creates a more investable company," he said.
Soul Patts, established in 1872, is one of Australia's most renowned investment firms with a diversified portfolio across multiple industries.
The company is Australia's second oldest publicly listed entity, having first traded on the Sydney Stock Exchange in 1903.
Brickworks has grown to become one of the world's largest building material manufacturers since its inception in 1934.
In Australia, it operates through brands including Austral Bricks and Bowral Bricks, with a strong US presence across 28 locations.
The company also leverages surplus operational land for property development as part of its portfolio strategy.
"The time is now right to combine with Soul Patts, bring our portfolios under one investment company, and become a well-resourced and more diversified group delivering long term value for our shareholders," said Mark Ellenor, Brickworks CEO.
Meanwhile, FBR Limited recently completed a 10-house demonstration program in Florida using its Hadrian X robotic bricklaying technology.
The demonstration showed it is possible to build the walls of a standard home in a single day using the robotic system.
Hadrian X autonomously constructs structural walls based on 3D computer-aided design models using the company's proprietary Dynamic Stabilisation Technology.
FBR has completed 32 structures in Western Australia using the Hadrian X and another 10 single storey homes in Florida.
The R&D phase is now complete, with the product entering commercialisation.
"FBR is a world leader in developing large scale robotic solutions for large scale tasks," said Mark Pivac, FBR Limited CEO.
"We are now offering this capability to customers to introduce the efficiency of automation to their businesses," he said.
MTM Critical Metals announced its Flash Joule Heating technology successfully recovered 98 per cent of antimony from US-sourced electronic waste at a grade of 3.13 per cent.
This substantially exceeds the grade of typical ore from mining operations, where even the largest deposits average between 0.5 per cent and 0.7 per cent antimony.
China accounts for nearly 50 per cent of global antimony mine production and controls more than 70 per cent of global refining capacity.
The price of antimony trioxide has more than tripled since 2023 amid China's tightening control over strategic metal exports.
"This result demonstrates the strong technical and commercial potential of our FJH process for recovering strategic metals from e-waste," said Michael Walshe, MTM Critical Metals Managing Director & CEO.
"Achieving 98% recovery of antimony at over 3% grade, from domestic urban feedstock, is particularly significant given the U.S. currently has no meaningful domestic Sb production," he said.
MTM has secured more than 1,100 tonnes per year of e-waste feedstock under long-term agreements with US suppliers.
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Soul Pattinson and Brickworks have announced a proposed merger that will create a $14 billion investment entity and end decades of cross-shareholding between the two ASX-listed companies.
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string(0) "" ["value"]=> string(0) "" ["rawvalue"]=> string(0) "" } } ["link"]=> string(94) "/invest-money/soul-patts-and-brickworks-plan-14-billion-merger-to-create-investment-powerhouse" ["image"]=> string(133) "https://res.cloudinary.com/momentum-media-group-pty-ltd/image/upload/v1751264833/6bac0ed76e05b75727123db4bc34b41e43df1fa8_tfhskn.webp" ["image_alt"]=> string(81) "Soul Patts and Brickworks plan $14 billion merger to create investment powerhouse" } [2]=> object(stdClass)#8158 (57) { ["id"]=> int(18684) ["title"]=> string(76) "Australian investors plan to boost private market allocations to 45 per cent" ["alias"]=> string(76) "australian-investors-plan-to-boost-private-market-allocations-to-45-per-cent" ["introtext"]=> string(198) "Australian institutional investors plan to increase their private market allocations from 39 per cent to 45 per cent within three to five years, according to new research from State Street.
" ["fulltext"]=> string(4688) "The finding represents the largest increase of any Asia-Pacific country and reflects growing optimism towards alternative investments amid geopolitical and macroeconomic uncertainty.
State Street's fourth annual Private Markets survey gathered responses from 450 institutional investors globally, including 30 Australian respondents across multi-asset managers, private markets managers, pension funds and insurance companies.
Currently, six in 10 Australian respondents have 10 per cent to 30 per cent of their portfolio allocated to private assets.
Over the next three to five years, seven in 10 anticipate an allocation above 30 per cent, with four in 10 expecting to allocate more than 50 per cent to private markets.
"The 2025 survey results reflect confidence in private market assets and growing institutional readiness for alternative vehicles in the current macroeconomic environment," said Cleyde Hazell, State Street's Head of Australia Product Team.
"We are seeing increased interest in private markets assets that offer relatively low volatility compared to public markets," she said.
Hazell noted that uncertainty about the world economic environment from the new US administration's tariff policies and possible reciprocations from major trading partners is influencing institutions' investment strategies.
"Australian investors are responding to these structural and market shifts by embracing private markets and they are doing so more assertively than their regional peers," she said.
The survey reveals a significant shift towards retail-style fund vehicles, with 53 per cent of global respondents believing at least half of private market flows will come through semi-liquid retail products within one to two years.
This contrasts with 2024, when 51 per cent expected traditional institutional fundraising to remain the primary source of capital.
In Australia, about one-third of respondents expect retail will be the key channel for fundraising in the next two to three years, up from 17 per cent last year.
"It's encouraging to see institutions across Australia taking a leading role in expanding access to private markets," said Hazell.
"The rising interest in semi-liquid, retail-style fund structures is being driven by product innovation and better access to data, which are making these vehicles more attractive for long-term allocations," she said.
Private equity remains the most appealing private markets asset class for institutional investors across Asia-Pacific, with 75 per cent of regional respondents expecting to increase allocation over the next two years.
Among Asia-Pacific countries, Australian respondents (47 per cent) and Singapore (38 per cent) see private debt benefiting most from the growth of semi-liquid funds.
"Investors believe private debt is easily securitised and therefore will benefit greater from the growth of individual/DC focused semi liquid funds," said Hazell.
The survey suggests investors are becoming more quality-focused in their private market investments, with increased emphasis on due diligence and risk assessment.
Capital allocation is moving from emerging to developed markets, with Asia-Pacific institutions particularly looking at investment opportunities in North America for private equity and developed Asia-Pacific for private debt.
Willingness to invest in emerging Asia-Pacific showed the largest decline, with 14 per cent of respondents planning allocations in this market, down from 25 per cent in 2024.
Most Asia-Pacific respondents are either investing in (31 per cent) or planning to invest in (38 per cent) generative artificial intelligence and large language models for private market investments.
However, Australian institutions appear slower in adopting these technologies, with six in 10 respondents still in early, aspirational stages of adoption.
"While many APAC institutions are already unlocking the value of generative AI and large language models in private markets, Australian organisations remain in the early, exploratory stages," said Hazell.
"Our research shows that while interest is rising, adoption in Australia is notably behind regional peers, with many firms (40 per cent) still uncertain about return on investment," she said.
Despite slower uptake, around seven in 10 Australian organisations expect their technology spending to rise over the next one to two years.
The study was commissioned by State Street and conducted by CoreData Research in the first quarter of 2025.
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Australian institutional investors plan to increase their private market allocations from 39 per cent to 45 per cent within three to five years, according to new research from State Street.
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" ["fulltext"]=> string(1272) "The quarterly GDP growth figure of 0.2 per cent fell short of the already low expectations set by economists and was three times slower than March projections.
Krishna Bhimavarapu, APAC economist at State Street Global Advisors, said the weak data fundamentally changes the approach to the Australian economy.
"Today's GDP growth data came in below our low bar (0.3% q/q) at 0.2%; it's three times slower than what we pencilled in March," Bhimavarapu said.
"This changes the fundamental approach to the Australian economy as the RBA may ease faster and potentially by larger magnitude when they meet next."
The economist said the data resolves questions about the effectiveness of the central bank's monetary policy stance.
"Either way, the data settles the debate that the cash rate remained restrictive for longer than perhaps needed and that growth is affected as a result," Bhimavarapu said.
The weak GDP figures suggest the Reserve Bank's restrictive monetary policy may have weighed more heavily on economic activity than initially anticipated.
The data is likely to influence the RBA's future policy decisions, with the possibility of more substantial rate cuts being considered at upcoming meetings.
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Australia's latest GDP growth data has come in significantly below expectations, prompting an economist to suggest the Reserve Bank may need to ease monetary policy more aggressively.
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string(0) "" ["value"]=> string(0) "" ["rawvalue"]=> string(0) "" } } ["link"]=> string(80) "/invest-money/economy/gdp-data-prompts-economist-to-predict-faster-rba-rate-cuts" ["image"]=> string(127) "https://res.cloudinary.com/momentum-media-group-pty-ltd/image/upload/v1749026571/pexels-karolina-grabowska-7876656_1_j1ynso.jpg" ["image_alt"]=> string(58) "GDP data prompts economist to predict faster RBA rate cuts" } [4]=> object(stdClass)#8156 (57) { ["id"]=> int(18680) ["title"]=> string(86) "Global markets face turbulent start amid tariff concerns, but outlook remains cautious" ["alias"]=> string(85) "global-markets-face-turbulent-start-amid-tariff-concerns-but-outlook-remains-cautious" ["introtext"]=> string(196) "Global equity and bond markets have experienced a turbulent start to 2025, primarily due to concerns that a potential tariff-driven trade war could heighten inflation and recession risks.
" ["fulltext"]=> string(3353) "However, a pause on most tariffs has diminished those concerns, according to State Street Global Advisors' 2025 Midyear Global Market Outlook released on Monday.
The investment management firm said it retained a cautious outlook, emphasising diversification of exposures and staying alert for opportunities during any drawdown periods.
State Street Global Advisors global chief investment officer Lori Heinel said much had changed since the beginning of the year.
"After a turbulent period that saw episodic swings in both equities and bonds in response to wide-ranging executive orders and the announcement of higher-than-expected tariffs, financial markets have since stabilised with the tariff imposition paused to allow for trade negotiations," she said.
The firm said there was now greater confidence that tariff levels would settle well below the original headline levels that spooked markets.
State Street maintained its growth forecasts and projections for central bank rate cuts, while recognising that tariffs at the lower end of the range would likely still bring some inflationary pressures in the US.
The firm said Europe's pledge to spend more on infrastructure and defence was a positive, bolstered by Germany easing its limits on government borrowing.
State Street chief economist Simona Mocuta said the firm did not anticipate a US recession, with European growth forecasts little changed and global growth expected to hover near trend.
"The 90-day delay in reciprocal tariff implementation (initially excluding China) is just one example; the changes to the Ukraine minerals deal that ultimately allowed for its signing is another," she said.
"The start of US-China talks suggests the potential for significant easing in that tit-for-tat tariff war as well."
Ms Mocuta said something especially important and positive had emerged from the chaos of recent months - the reform of the German debt brake.
"It speaks to a narrowing of the US growth outperformance and a more balanced global growth distribution, both of which are welcome," she said.
State Street head of macro policy research Elliot Hentov said the balance of risks had changed more dramatically than forecasts.
"The path to a soft landing was quite wide three months ago; it has since narrowed considerably. But it remains open," he said.
The firm said the bond market would be sensitive to US debt sustainability considerations, with the Trump administration promising a pro-growth agenda centred around fiscal stimulus.
For equities, State Street said uncertainty clouded the outlook as policy from Washington and broader geopolitical developments left unanswered questions.
The firm said fundamentals did not favour European equities, despite their strong start to 2025, while the US was hovering around a 9 per cent earnings growth estimate in 2025.
In fixed income, State Street retained its constructive view despite a turbulent start to the year for many bond markets.
For commodities, the firm held an optimistic view on precious metals, particularly gold, saying the main forces that had driven gold prices higher remained active.
State Street manages $4.7 trillion in assets under management globally.
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Global equity and bond markets have experienced a turbulent start to 2025, primarily due to concerns that a potential tariff-driven trade war could heighten inflation and recession risks.
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string(0) "" ["value"]=> string(0) "" ["rawvalue"]=> string(0) "" } } ["link"]=> string(107) "/invest-money/economy/global-markets-face-turbulent-start-amid-tariff-concerns-but-outlook-remains-cautious" ["image"]=> string(110) "https://res.cloudinary.com/momentum-media-group-pty-ltd/image/upload/v1748934032/pexels-olly-845451_bgaztx.jpg" ["image_alt"]=> string(86) "Global markets face turbulent start amid tariff concerns, but outlook remains cautious" } [5]=> object(stdClass)#8155 (57) { ["id"]=> int(18679) ["title"]=> string(64) "RBA may cut rates faster if GDP data disappoints, economists say" ["alias"]=> string(63) "rba-may-cut-rates-faster-if-gdp-data-disappoints-economists-say" ["introtext"]=> string(180) "The Reserve Bank of Australia may cut interest rates more quickly if next week's GDP data disappoints, economists said following today's consumer price index data for May.
" ["fulltext"]=> string(2276) "The Australian Bureau of Statistics reported inflation remained within the RBA's target zone, with the trimmed mean rising to 2.8 per cent year-on-year.
However, construction work done data stalled at 0.0 per cent quarter-on-quarter against consensus expectations for a 0.5 per cent rise.
Krishna Bhimavarapu, APAC economist at State Street Global Advisors, said the inflation data was in line with expectations.
"Although the trimmed mean was up a notch to 2.8% y/y, the data are in line with expectations that inflation is in the RBA's target zone," Mr Bhimavarapu said.
"The key surprise was in the first partial data release for Q1 GDP – the construction work done which was reported to have stalled (0.0% q/q) against a consensus for a 0.5% rise."
"We increasingly feel that the RBA might cut faster or quicker if Q1 GDP data disappoints next week."
The April CPI came in slightly higher than expected at 2.4 per cent year-on-year, with the trimmed mean at 2.8 per cent, but remained consistent with the RBA's 2-3 per cent target range.
Dwyfor Evans, head of APAC macro strategy at State Street Markets, said nothing in the April data would deviate the bank from its recent statement following the cash rate announcement.
"Slightly higher than expected April CPI at 2.4% y/y with the trimmed mean at 2.8% but consistent with the RBA's 2-3% target range," Mr Evans said.
"Moreover, nothing in the April data to deviate from the Bank's recent statement following the cash rate announcement."
State Street's PriceStats online price series for Australia showed a modest uptick in May, but base effects would remain supportive for the official data for the next three months.
Mr Evans said base effects would become more of a challenge to the inflation target from September.
"Given the continued uncertainty around tariffs, strong jobs market and the base effects pressures in Q3, expect the RBA to maintain its cautious stance on prospective easing," he said.
State Street is one of the world's leading providers of financial services to investors with US$46.8 trillion in assets under custody and administration, and $4.7 trillion in assets under management.
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The Reserve Bank of Australia may cut interest rates more quickly if next week's GDP data disappoints, economists said following today's consumer price index data for May.
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string(0) "" ["value"]=> string(0) "" ["rawvalue"]=> string(0) "" } } ["link"]=> string(85) "/invest-money/economy/rba-may-cut-rates-faster-if-gdp-data-disappoints-economists-say" ["image"]=> string(122) "https://res.cloudinary.com/momentum-media-group-pty-ltd/image/upload/v1748425681/pexels-divinetechygirl-1181534_rtkzpt.jpg" ["image_alt"]=> string(64) "RBA may cut rates faster if GDP data disappoints, economists say" } }Subscribe to our newletters
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