Investor confidence up in February

Institutional investors, except those in Europe, are feeling more confident despite recent volatility, according to the latest State Street Global Investor Confidence Index (ICI).

The index rose by 4.4 points in February from revised reading of 103.0, boosted by a renewed appetite for risk from North American and Asian investors.

The index, which was developed by State Street Global Exchange’s research and advisory services business State Street Associates found that the North American ICI was 6.1 points up to 104.4 while Asian ICI rose by 7.8 points to 108.5.

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At the same time, the European ICI dropped by 12.9 points to 100.6.

Kenneth Froot, who developed the ICI at State Street Associates, said that in February investors still showed an appetite for risk despite the growing market volatility.

“The month of February was far from boring. Global markets witnessed inflation concerns and growing fears about the pace and degree of rising rates. However, it appears that the return of market volatility did not suppress institutional investors’ risk-seeking appetite.

“The market gyrations were led by the US but it appears that this impacted European investors more than those in North America and Asia. This divergence is certainly notable and worth watching in the months ahead.”

The index measured investor confidence or risk appetite quantitatively by analysing the actual buying and selling patters of institutional investors and by assigning a precise meaning to changes in investors risk appetite.

According to the index, the greater the percentage allocation to equities, the higher risk appetite or confidence was, with the reading of 100 being neutral, State Street said.

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