Investor Confidence Index Slips Slightly in December from 99.4 to 99.3
BOSTON — State Street Global Markets, the investment research and trading arm of State Street Corporation (NYSE:STT), today released the results of the State Street Investor Confidence Index® for December 2011.
Global Investor Confidence dipped slightly to 99.3 in December, down 0.1 points from November’s revised reading of 99.4. Among North American institutional investors, confidence decreased 2.0 points to 96.4 from November’s revised reading of 98.4, and in Asia, risk appetite also declined, falling 1.0 points to 93.7 from November’s revised reading of 94.7. European institutional investors bucked the trend, as their confidence rose 0.6 points from November’s revised level of 101.6 to 102.2.
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. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their 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.
“The small declines this month were offset by upward revisions to last month’s numbers. As a result, we would describe investors as being in a holding pattern,” commented Froot. “The meeting of European policy makers on December 9th did not address the over-arching questions in the minds of global investors, and they are likely looking forward to the first quarter of 2012 for greater clarity on the prospects for risk allocations in their portfolios.”
“Looking regionally, European investors are more optimistic than their North American and Asian peers for the second consecutive month,” added O’Connell. “This is a turnabout from the first half of the year, when European investors showed the most pessimism. It does not necessarily mean that prospects for the European region itself have improved, but it does suggest that European institutions are more willing to allocate to equities both inside and outside Europe than they were earlier in the year.”
About State Street Global Markets
State Street Global Markets provides specialized investment research and trading in foreign exchange, equities, fixed income and derivatives. Its goal is to enhance and preserve portfolio values for asset managers and asset owners. From its unique position at the crossroads of global markets, it creates and unlocks value for its client with original investment behavior research, innovative portfolio strategies, trade process optimization, and global connectivity across multiple asset classes and markets.
State Street Global Markets’ research team of leading academic and industry experts is committed to continually advancing the science, including theory and application of its proprietary investor behavior research and innovative portfolio and risk management technologies.
About the State Street Investor Confidence Index®
The index is released globally at 10 a.m. Eastern time in Boston on the last Tuesday of each month. More information on the State Street Investor Confidence Index is available at http://www.statestreet.com/investorconfidenceindex.
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's leading provider of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $21.5 trillion in assets under custody and administration and $1.9 trillion* in assets under management at September 30, 2011, State Street operates in 26 countries and more than 100 geographic markets. For more information, visit State Street’s web site at www.statestreet.com.
*This AUM includes the assets of the SPDR Gold Trust (approx. $64 billion as of September 30, 2011), for which State Street Global Markets, LLC, an affiliate of State Street Global Advisors serves as the marketing agent.
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 2010 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, December 27, 2011, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.