Goldman says investors remain firmly risk-on, brushing aside rising geopolitical uncertainty.
Summary:
Goldman says investor risk appetite remains elevated
Sentiment sits around the 67th percentile
Risk appetite index at highest level since April 2021
Equity positioning remains broadly bullish
Flows expanding into Europe, Japan and EM
Goldman Sachs says investor risk appetite remains elevated despite a backdrop of intensifying geopolitical uncertainty, suggesting markets are continuing to look through macro and political risks for now.
According to the bank’s latest positioning and sentiment indicators, investor optimism currently sits around the 67th percentile, a level that signals confidence remains firmly intact. Goldman adds that its proprietary risk appetite index has climbed to its highest reading since April 2021, underscoring the extent to which investors continue to favour risk assets.
The bank notes that flows into higher-risk assets remain positive across the board, while survey-based measures of bullishness have also picked up. Equity positioning, in particular, remains strongly constructive, with investors maintaining overweight exposures and expanding allocations across regions rather than retreating to defensive positioning.
Goldman highlights that the breadth of the rally has been supported by continued engagement from U.S. retail investors, whose activity has helped underpin participation across a wide range of stocks rather than a narrow group of leaders. At the same time, international flows have accelerated, with foreign investors increasing allocations to European, Japanese and emerging market assets.
This broadening of exposure suggests investors are becoming more comfortable with global growth prospects and are less inclined to concentrate risk solely in U.S. markets. It also points to a willingness to reallocate toward regions that may benefit from cyclical recovery, valuation support, or improving policy settings.
While Goldman acknowledges that geopolitical risks have increased and remain a potential source of volatility, the bank’s analysis suggests these concerns have yet to materially dent investor confidence. Instead, positioning data imply that markets continue to prioritise growth resilience, earnings momentum and liquidity conditions over downside geopolitical scenarios.
The bank cautions that elevated risk appetite can amplify market sensitivity to adverse surprises, but for now, investor behaviour indicates a continued preference for staying invested rather than de-risking in anticipation of shocks.
