The Global Investor Confidence Index (ICI) fell 3.4 points to finish at 88.0 in March, down from February’s (2013) of 91.4, according to State Street.
The decrease was driven mostly by North American institutions, whose confidence lowered by 4.2 points from February’s level of 99.7 to settle at 95.5.
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The change in European investors’ sentiment, while also negative, was less pronounced, with the European ICI declining just 0.4 points to 91.7 from February’s revised reading of 92.1. Risk appetite among Asian institutional investors increased slightly, rising 1.8 points from 85.5 to finish the month at 87.3.
The State Street Investor Confidence Index was developed by Harvard University professor Kenneth Froot and Paul O’Connell of State Street Associates.
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.
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By GlobalDataA 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.
