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Thursday, August 30, 2018

State Street Investor Confidence Index at 18 Month Low

Yesterday State Street said their Investor Confidence Index fell to an 18-month low of 94.3.

  • pdf: Investor Confidence Declined in August by 7.4 points to 94.3
  • “After a few months of caution and measured risk appetite, global institutional investors have started to display risk-averse behavior as they navigate through elevated trade uncertainty and geopolitical turmoil. This sentiment was also seen across global equity markets as defensive sectors outperformed. The decline in confidence was particularly apparent for North American investors, with the North American ICI recording its lowest reading of the year,” commented Kenneth Froot.
  • 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.
  • Graph: State Street Investor Confidence Index vs the S&P500 



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According to State Street,
 "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."


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