Institutional investors’ confidence rises

Institutional investor confidence worldwide increased 12.7 points to 72.9, from January’s level of 60.2, according to the State Street Investor Confidence Index for February, released today by State Street Global Markets. The index measures confidence among institutional investors by analyzing their buying and selling patterns on a quantitative basis. It is based on a financial theory that assigns precise meaning to changes in investor risk appetite, or the willingness of investors to allocate their portfolios to equities. The more of their portfolios that institutional investors are willing to devote to equities, the greater their risk appetite or confidence. As during last month, the increase in investor confidence was driven by North American institutional investors, whose confidence climbed 13.0 points to 64.5. Elsewhere, risk appetite was somewhat more subdued, as evidenced by a decline of 3.2 points in the European index to 69.8, and a decline in the Asian index of 2.7 points to 83.8. State Street Global Markets is the investment research and trading arm of State Street Corp. of Boston.