The Putnam Global Risk Appetite (RA) Index is a proprietary quantitative model that aims to measure investors’ willingness to invest in risky assets, including equities, commodities, high-yield bonds, and other spread sectors. With a composite view of risk-appetite signals across a broad mix of asset types, Putnam’s RA Index provides a framework for discussing investor preferences and can signal trend changes in broad market sentiment.

Risk appetite tilts upward


July saw an improvement in risk sentiment amid hopes of recovery


  • Technology stocks outperformed across the board.
  • Investment-grade corporate bonds rallied, buoyed by purchases by the Federal Reserve and other central banks.
  • Real rates (inflation-linked securities) rallied amid steady buying by the Fed.
  • European sovereign bonds gained, including debt from peripheral countries.
  • The U.S. dollar fell against other G-10 currencies, including the euro.
  • Emerging-market equities outperformed, led by gains in China.
  • Precious metals, especially gold, were the big winners and prices rose.


This 10-year illustration captures the cyclicality of investors' appetite for risk.

risk key

Sept–Nov '11

Eruption and subsequent clearing of concerns over EU sovereign debt crisis, U.S. debt ceiling, and fear of China hard landing drive major risk sell-off and rally.

March '16–Jan '18

Risk assets rally amid improving commodity prices, perceived stability in China's macro data, and expectations for gradualist Fed policy.

Source: Putnam. Data as July 31, 2020. To create the Global Risk Appetite Index, we weigh the monthly relative returns of 30 different asset classes over 3-month T-bills relative to the trailing 2-year volatility of each asset class. The higher the relative return and the lower the volatility, the greater the risk appetite; conversely, the lower the relative return and the higher the volatility, the stronger the risk aversion.