BOSTON — State Street Global Exchange today released the results of the State Street Investor Confidence Index® (ICI) for July 2014.
The Global ICI fell to 114.7 in July, down 4.6 points from June’s revised reading of 119.3. The decline was driven by a decrease in North American sentiment from 116.1 to 110.3 and a decrease in Asian sentiment. European sentiment rose to 121.2, up from June’s revised reading of 113.7. Sentiment in Asia fell to 92.1 from 96.2 in June.
The Investor Confidence Index was developed by State Street Associates, State Street Global Exchange’s research and advisory services business, and Harvard University professor Kenneth Froot. 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.
“While valuation concerns in the US markets and rising geopolitical risk have dampened sentiment in July, North American confidence still remains relatively upbeat,” said Jessica Donohue, senior managing director and head of research and advisory services, State Street Global Exchange. “Institutions appear to be in a wait-and-see mode this summer as they contemplate the future path of Federal Reserve monetary policy.”
“Stronger growth metrics in Europe and the UK and well received ECB policy actions helped boost European confidence, which reached the strongest level since May of 2007,” added Froot. “Meanwhile, rising geopolitical tensions may have weakened Asian investor sentiment. It will be interesting to see if continued growth in China and political reform in select Asian countries, including India and Indonesia, lead to stronger sentiment going forward.”
State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $28.4 trillion in assets under custody and administration and $2.48 trillion* in assets under management as of June 30, 2014, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street’s web site at www.statestreet.com.
* Assets under management include the assets of the SPDR® Gold ETF (approximately $33 billion as of June 30, 2014), for which State Street Global Markets, LLC, an affiliate of SSgA, serves as the distribution agent.
The views expressed in this material are the views of State Street through the period ended July 29, 2014 and are subject to change based on market and other conditions.
This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those set forth in State Street's 2013 annual report and subsequent SEC filings. State Street encourages investors to read the corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, July 29, 2014, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.