Investor Confidence Increases 13.9 Points in February to 103.9
State Street Global Markets has released the results of the State Street Investor Confidence Index® (ICI) for February 2022.
The Global Investor Confidence Index increased to 103.9, up 13.9 points from January’s revised reading of 90.0. The increase was led by a 12.6 jump in North American ICI to 106.2 as well as an 8.3 rise in European ICI to 93.9. Asian ICI, meanwhile, fell a modest 0.2 points to 96.9.
The Investor Confidence Index was developed at State Street Associates, State Street Global Markets’s research and advisory services business, in partnership with FDO Partners. 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.
“Investors’ sentiment improved sharply in February, with the index recording one of its biggest monthly gains since recovering from lows established in the early months of the pandemic,” commented Marvin Loh, senior macro strategist at State Street Global Markets. “Falling COVID caseloads and relaxed restrictions drove the improving outlook even as the hawkish view for central banks continue in the face of upside inflation surprises. While the index’s movement back above 100 reflects a more constructive view on risk assets, this outlook will be tested in coming months with growing geopolitical concerns and widespread rate hikes across developed markets. This may be especially true in the case of Europe, which has the lowest reading amongst the three regions tracked.”
More information on the State Street Investor Confidence Index is available at http://www.statestreet.com/ideas/investor-confidence-index.html
