Concern over stock-market volatility among investors has dropped to its lowest in 2 years, Allianz Life says

• About a third of US investors are worried about volatility risks to their retirement portfolios, according to Allianz Life.
• That rate is the lowest since 2019 as Americans see the economy pushing through the pandemic.
• But 50% of respondents with retirement plans are concerned about a new COVID strain.

A little more than a third of US stock market investors have expressed worry about the impact of market volatility on their retirement portfolios, according to insurer Allianz Life, the lowest since 2019 as investors largely see the end of the coronavirus health crisis.

33% of respondents say they are worried about risks stemming from market volatility, according to the second quarter Market Perceptions Study released by Allianz Life Insurance Co. of North America on Wednesday.

That is the lowest percentage since 2019 and a drop from 42% in the same period in 2020 when the COVID-19 outbreak was ramping up.

"With some of the immediate financial impacts of COVID-19 receding in the rearview mirror, Americans are feeling better about market conditions than they have in over a year," said Kelly LaVigne, vice president of consumer insights at Allianz Life, in a statement. There's been a decline to 48% of Americans who say they're concerned about a major recession, down from 65% this time last year, the firm said.

Volatility in the stock market has pulled back since the peak of the pandemic, aided by a broad recovery in the economy. The stock market's so-called fear gauge - the Cboe Volatility Index - has tumbled this year, trading just above around 19, well below pandemic levels. At the same time, US stocks as tracked by the broad S&P 500 index have climbed to record highs, boosted by a rebound in energy and financial stocks.

The more sanguine view of market risks among investors comes as businesses across the country have been restarting operations in the wake of the government's rollout of coronavirus vaccinations. Roughly 158 million Americans, or 48%, are fully vaccinated, according to the Centers for Disease Control and Prevention. Consumer activity, employment and movement such as flights have been grinding higher, economists at Jefferies said in late June update, although they noted a cap in housing and industrial activity.

Allianz said 63% of survey respondents say they are less worried about the impact of the pandemic on their finances compared with a year ago.

"But many still haven't forgotten the drastic impacts of the pandemic, with 50% saying they are still worried about another pandemic or a new strain of COVID and its impact on their portfolios," said LaVigne.

This week, the CDC said Delta is now the dominant variant of COVID-19 in the US, accounting for 51.7% of new infections. The highly contagious strain has been quickly spreading worldwide since its first detection in India in December.

"As the economy and stock market continue to improve coming out of the pandemic, people are wisely taking lessons learned and applying them to their go-forward financial strategies," LaVigne said.

The quarterly online survey from Allianz Life was conducted in May with a nationally representative sample of 1,005 respondents who are at least 18 years old.