Institutional investor confidence rose in February, particularly in North America, according to the results of the State Street Investor Confidence Index. Global investor confidence increased by 5.2 points to 90.4 from January’s revised reading of 85.2.
Looking regionally, the confidence of North American institutional investors rose strongly from 94.9 to 101.7. In other regions, confidence remained broadly unchanged, with European investors showing a small increase of 1.5 points to 93.7, and Asian investors showing a small decline of 1.1 points to 83.9.
Developed through State Street Global Markets’ research partnership, State Street Associates, by Harvard University professor Ken Froot and State Street Associates Director Paul O’Connell, the index measures investor confidence on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors. The index is based on financial theory that assigns precise meaning to changes in investor risk appetite, or the willingness of investors to allocate their portfolios to equities. The more of their portfolio that institutional investors are willing to devote to equities, the greater their risk appetite or confidence.
“This month saw a strong increase in the confidence of North American investors,” said Froot. “In part, this is reflective of the global growth outlook, with a sanguine assessment by U.S. policy makers complementing improved numbers in both Asia and Europe.”
“U.S. investors bought a record amount of foreign securities over the last 12 months,” added O’Connell. “This is reflected in the 18 point increase we have measured in North American confidence over the period. European confidence remains close to the high established in December, but in Asia investors have become considerably more cautious over the last three months.”
Institutional investor confidence rises in February
- By: IE Staff
- February 20, 2007 February 20, 2007
- 10:15