GLOBAL - Investor confidence fell in Europe and the US in September despite a rally in equities, research by State Street Global Markets (SSGM) shows.
SSGM, the investment research and trading arm of State Street Corporation, released the data as part of its monthly Investor Confidence Index.
The latest figures revealed globally, investor confidence fell four points from August's revised reading of 92 to 88. In North America, confidence decreased the most, dropping 7.3 points to 87.9 from August's revised reading of 95.2. Confidence also decreased slightly among European investors dropping 1.2 points from 98.4 to 97.2. As has been the case for several months, Asian investors bucked the trend and their confidence rose 4.4 points from 103.5 to 107.9.
"This month's decline in global investor confidence is somewhat surprising, in light of the meaningful rally in risky assets since the last data release," said Froot. "Looking at the numbers more closely, however, we see that the decline is driven largely by North American investors; elsewhere we see a much more upbeat mood.
"One underlying driver here is the persistent softness observed in the US economy over the summer, which contrasts with the resilience of markets elsewhere such as Australia, Canada, New Zealand and Sweden."
O'Connell added: "An examination of the institutional portfolio flows underlying this month's numbers reveals a rotation out of some ‘core' markets-notably the US and Europe ex-UK-and into ‘peripheral' markets-the emerging markets and Asia generally. Thus this month's numbers reflect a re-evaluation of relative country prospects by investors, rather than a wholesale reduction in risk appetite."
The index measures investor confidence on a quantitative basis by analysing the actual buying and selling patterns of institutional investors.
Meanwhile, State Street Corporation is to expand its relationship with Babson Capital Management to provide investment operations and technology services. State Street has provided custody, trustee, private equity and hedge fund services to Babson since 2001.
"Leveraging State Street's expertise in global operations services will allow us to improve access to data, decrease reliance on multiple internal systems, take advantage of new developments in technology, and achieve greater overall operating efficiency," said Thomas M. Finke, chairman and chief executive officer of Babson Capital.
Babson serves institutional investors around the globe and has $128.9bn in assets under management as of June 30, 2010, invested across fixed income, equities, alternatives, structured products, debt financing for corporations and commercial real estate.
This week's edition of Professional Pensions is out now.
Ben Gunnee reflects on 2018 and talks about the Fiduciary Management trends to keep an eye on in 2019
Lloyds Banking Group secured 630,000 new pension customers last year, according to its 2018 annual results.
Guy Opperman has rejected calls to speed up changes to auto-enrolment (AE) despite increasing pressure to boost contribution rates and overall savings pots.