State Street Investor Confidence Index rises in February

A worldwide investor confidence index posted a February reading of 94.8, up 8.7 points from the previous month’s reading, as institutional investors felt more optimistic, particularly institutional investors in North America.

Kenneth Froot. Photo taken from a Harvard website.

The index is maintained by State Street Global Markets, the investment research and trading arm of State Street Corp., a Boston-based financial services company.

Developed by Harvard University professor Kenneth Froot and Paul O’Connell of State Street Associates, the index seeks to measure investor confidence by analyzing the buying and selling patterns of institutional investors.

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“In February, we saw continued demand on the part of institutional investors for equity securities,” Froot said in a statement. “Since reaching a record low in November, the appetite for risk has rebounded considerably. There are a number of risks on the horizon that may give investors pause, including US fiscal negotiations, the outcome of the Italian elections, and the direction of Fed policy, so caution is warranted. That being said, it’s fair to say that strong and persistent ‘de-risking’ by institutions that has characterized recent years has been suspended, at least for now.”

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