BOSTON — State Street Global Exchange today released the results of the State Street Investor Confidence Index® (ICI) for August 2014.
The Global ICI rose to 122.8 in August, up 7.2 points from July’s revised reading of 115.6. The improvement in sentiment was driven by an increase in the Asian ICI from 92.1 to 101.7 and a six point increase in the European ICI to 127.7. North American Sentiment fell one point to 110.3.
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.
“Despite a bout of risk aversion driven by geopolitical tensions in the early days of August, global institutional investor confidence remains resilient,” said Jessica Donohue, senior managing director and head of research and advisory services, State Street Global Exchange. “With benign developed market inflation, institutions may be positioning for continued accommodative policy from central banks.”
“The impending targeted longer-term financing operations (TLTROs), a lack of inflationary pressures across the Eurozone, and the potential for more unconventional easing from the European Central Bank (ECB) may have provided tailwinds to European sentiment” added Paul O’Connell. “Moreover, resilient Chinese growth has reduced fears of a hard landing and helped boost Asian sentiment. With Chinese inflation running at low levels, the People’s Bank of China may also have further room to stimulate the economy.”
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 August 26, 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, August 26, 2014, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.