According to the State Street Investor Confidence Index for September, U.S. investor confidence decreased by 2.7, to 80.8 from August’s revised reading of 83.5.

Regionally, the confidence of North American institutional investors fell to 92.8 from 96.0. The confidence of Asian investors increased to 90.6 from 86.6 and the confidence of European investors rose to 89.1 from 88.4.

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 State Street Investor Confidence Index measures investor confidence on a quantitative basis, analyzing actual buying and selling patterns of institutional investors.

The index is based on financial theory that assigns precise meaning to changes in investor risk sentiment, or the willingness of investors to hold proportionally more or less of their portfolio in equities. The more of their portfolio that institutional investors are willing to devote to equities, the greater their risk appetite or confidence.

“Investors are trying to balance news of a slowing property market and weaker inventories against the fall in commodity prices and its likely consequences for consumer spending,” said Froot. “The net result is a continuation in the global downward trend in risk appetite that began in June, but with some regional differences. European investors remain cautiously optimistic, and Asian investor confidence reached a 19-month high.”

“Consistent with a diminished appetite for risk-taking, coupled with a more favorable environment for consumers, global investors have recently favored defensive sectors — consumer staples, telecoms and utilities,” added O’Connell. “This has been especially the case amongst U.S. investors.”