Risk appetite strong among institutions: State Street

Institutional investor confidence is up 8.7 points to 94.8 since January, spurred on by North America, the State Street Investor Confidence Index has found.

The February growth in the percentage allocation to equities has reflected institutions' increased appetite for risk, with many adding to their equity positions in Japan, Europe ex-UK and the emerging markets, State Street associate director Paul O'Connell said.

For North American institutions, confidence rose 13.9 points from January's revised level of 85.1 to reach 99. Meanwhile, European institutions posted a confidence reading of 92.2 points, up from 89.4 in January, the index stated.

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Harvard University professor Kenneth Froot — one of the developers of the index — said February had seen continued institutional demand for equity securities since reaching a record low in November last year.

Despite the rise in the index, O'Connell said confidence among Asian investors remained "tepid", with risk appetite falling 4.5 points to 85.5.

He said "this may well reflect question marks around whether growth in the region will be internally or externally driven going forward".

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