Boston, April 27, 2010 – 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 March 2010.
Globally, Investor Confidence fell 7.7 points to 99.7 from March's revised reading of 107.4. Declines in sentiment in North America were a key contributor, with institutional investor confidence falling 6.7 points from 110.4 to 103.7. Among Asian investors, too, confidence was lower, falling 6.5 points from 100.7 to 94.2. European institutions bucked the trend, as the reading for that region rose 1.2 points from 94.7 to 95.9.
Developed through State Street Global Markets’ research partnership, State Street Associates, by Harvard University professor Ken Froot and State Street Associates Paul O’Connell, the State Street Investor Confidence Index measures investor confidence on a quantitative basis 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 is risk appetite or confidence It is based on actual trades rather than survey data, and as a result it captures the sentiment of institutional investors with unique precision.
“This month we saw institutional appetite for risk wane slightly, as volatility bounced back from the extremely benign levels seen in March,” commented Froot. “This was especially true towards the latter half of April. While institutions appear to have anticipated much of the improvement in economic prospects over the last six months, and allocated their portfolios accordingly, this month they displayed some increased caution about making further equity allocations. It remains to be seen whether this is a temporary pause, or an indication of a shift in the central theme of the last year.”
"The pattern of equity allocations this past month shows some interesting trends. Institutions have been building back up their portfolios in sectors that have been out of favor for some time, including the consumer discretionary and consumer staples sectors,” added O’Connell. “However, they have been offsetting these purchases with sales in other sectors, such as healthcare and select financials. This type of relative value allocation is characteristic of behavior when institutions feel that macroeconomic news is ‘priced in’ to the overall market.”
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 the global markets, it creates and unlocks value for its clients with original flow-based 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 & risk management technologies to help its clients challenge conventional thinking, shape ideas, make more informed investment decisions and deliver measurable results.
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 providers of financial services to institutional investors, including investment servicing, investment management, and investment research and trading. With $19 trillion in assets under custody and administration and $1.9 trillion in assets under management at March 31, 2010, State Street operates in 25 countries and more than 100 geographic markets worldwide. For more information, visit State Street at www.statestreet.com.
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 2009 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, April 27, 2010, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.