BOSTON — State Street Global Exchange today released the results of the State Street Investor Confidence Index® (ICI) for June 2014.
The Global ICI increased to 119.5 in June, up 0.9 points from May’s revised reading of 118.6. Investors in both North America and Europe were more upbeat, with the North American ICI rising 2.5 points to 116.4, and the European ICI rising by 2.6 points to reach 113.6. Asian investors, however, displayed more pessimism, and the Asian ICI retreated by 7.9 points to finish at 96.5.
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.
“Developed economies have entered summer with strong momentum, and this coupled with a willingness on the part of monetary authorities to maintain liquidity has been positive for risk appetite,” said O’Connell. “However, investor sentiment is below its February high, and remains vulnerable to signs of deflation in developed markets, and structural slowdown in emerging markets.”
“Asian investor confidence saw its second consecutive meaningful decline, leaving it some 18.5 points below its March high,” added Mike Metcalfe, senior vice president and head of multi-asset strategy at State Street Global Markets. “The sensitivity in the region to Chinese growth prospects and policy remains pronounced. The recent improvement in indices of leading indicators, together with the quasi-easing brought about by the widening of the yuan’s trading band, may provide some support to risk 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 $27.5 trillion in assets under custody and administration and $2.4 trillion* in assets under management as of March 31, 2014, State Street operates in more than 100 geographic markets worldwide, including the U.S., 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 $34 billion as of March 31, 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 June 24, 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, June 24, 2014, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.