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State Street Global Exchange today released the results of the State Street Investor Confidence Index® (ICI) for February 2019.
The Global Investor Confidence Index increased to 70.9, up 1.5 points from January’s revised reading of 69.4. Confidence among North American investors showed a slight uptick, with the North American ICI rising from 65.7 to 66.3. The European ICI rose by 6.1 points to 96.0 and the Asia ICI decreased by 3.5 points to 96.4.
The Investor Confidence Index was developed by Kenneth Froot and Paul O’Connell at State Street Associates, State Street Global Exchange’s research and advisory services business. It measures investor confidence or risk appetite quantitatively by analyzing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.
“Institutional investors remained cautious in February, continuing to show hesitance toward riskier assets,” said Kenneth Froot. “With lingering growth and trade policy uncertainty, it appears that the more dovish Fed and the hopes for progress on the US-China trade front are not enough to tip the scales – related to risk aversion.”
“Global institutional investor confidence has exhibited little signs of recovery following last month’s sharp decline in the ICI. Although cross-asset volatility has tempered, the crude memories of Q4’s market decline, along with increasing growth concerns in Europe and China, place headwinds on investor confidence,” commented Rajeev Bhargava, managing director and head of Investor Behavior Research, State Street Associates.
The index is released globally at 10 a.m. Eastern time in Boston on the last Wednesday of each month. More information on the State Street Investor Confidence Index is available at http://www.statestreet.com/ideas/investor-confidence-index.html.
