Institutional investors are less confident this month, according to the State Street Investor Confidence Index.
Global investor confidence fell by 7.5 points to a level of 92.1. As with last month, North American institutional investors were responsible for a large portion of this global move as their confidence declined to 106.0 from 117.1.
In Europe, investors there also played a role as confidence in that region fell to 82.3 from 86.6. The confidence of Asian institutions showed a small up-tick, rising by 1.6 points to 86.5.
In late July and early August, institutions accumulated equities globally as their risk appetite became relatively strong compared with other market participants who were selling aggressively. This accumulation by institutions proved worthwhile as markets rallied steadily from August 16 onwards. In September, institutions were more selective in their purchases, and this is reflected in the latest confidence reading.
“Evidence from data on short-sales compiled by State Street Global Markets is consistent with this view,” says State Street Associates director Paul O’Connell. “It suggests that, globally, institutional investors have been a steadying force during the recent market upheaval.”
The index measures investor confidence on a quantitative basis, analyzing actual buying and selling patterns of institutional investors. The more institutional investors are willing to devote to equities in their portfolio, the greater their confidence.
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