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Investor confidence index rises by 3.5 points in August

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State Street’s Global Investor Confidence Index rose by 3.5 points to 122.9 in August from July’s level of 119.4.

State Street’s Global Investor Confidence Index rose by 3.5 points to 122.9 in August from July’s level of 119.4.

Looking across the regions, the confidence of North American institutional investors declined slightly by 2.2 points from 120.6 to 118.4, a decline echoed among Asian investors, whose confidence fell 2.3 points from 94.1 to 91.8. By contrast, European institutional investors displayed increased risk appetite, and their confidence benchmark rose 4.3 points to 109.2 from 104.9 last month.

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 by analysing the actual buying and selling patterns of institutional investors.

‘This month’s increase represents the eighth consecutive improvement in global investor confidence, and places the risk appetite of institutional investors firmly in the range that is associated with accumulation of risk exposures,’ says Froot. ‘At the same time, the rate of increase in the Index has moderated relative to some months ago, suggesting that institutions are being somewhat selective in their allocations.’
 
‘This month we note some increased regional variation across the Indices,’ adds O’Connell. ‘While European institutional investors continued to ‘catch up’ with their North American counterparts, in terms of reallocating out of cash, North American and Asian institutions displayed some ambivalence about further reallocations, given trends over the last six months. Keeping in mind that a level of 100 denotes ‘neutral’ for the Index – the level at which investors are neither reducing nor increasing their allocations to risky assets – we can see European confidence remains somewhat below that of North American institutions, and that caution prevails in Asia.’

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