BOSTON--(BUSINESS WIRE)--Jan. 24, 2006--State Street Global
Markets, the investment research and trading arm of State Street
Corporation (NYSE:STT), released today the results of the State Street
Investor Confidence Index(R) for January 2006.
According to the January index, investor confidence decreased to
76.0 from December's revised reading of 83.8. Looking regionally, the
confidence of North American institutional investors fell to 88.0 in
January from a revised reading of 102.1 in December. The European
Index increased from 61.0 in December to 76.0 in January, and the
Asian Index rose from 75.7 in December to 80.4 this month.
Developed through State Street Global Markets' research
partnership, State Street Associates (SSA), by Harvard University
professor Ken Froot and SSA Director Paul O'Connell, the State Street
Investor Confidence Index(R) measures investor confidence on a
quantitative basis, analyzing actual buying and selling patterns of
institutional investors. The index is based on financial theory that
assigns precise meaning to changes in investor risk sentiment, or the
willingness of investors to hold proportionally more or less of their
portfolio in equities. The more of their portfolio that institutional
investors are willing to devote to equities, the greater their risk
appetite or confidence.
"This month we see strong divergence between the risk appetite of
North American institutional investors and their counterparts in
Europe and Asia," commented O'Connell. "The confidence of North
American investors to bear risk by expanding their holdings of risky
assets has hit the lowest level we have recorded to date. This figure
has impacted the Global ICI as well, resulting also in the lowest
level we have ever seen in that indicator. Asian and European
investors have stepped in and compensated somewhat, but the overall
impact is still strongly downward."
"There is a strong sell-off of portfolio risk to begin the year
among U.S. investors," added Froot. "In addition to cyclical concerns,
these investors are also striving hard for diversification, often into
new asset classes and investments that previously utilized long
positions only. While North American risk taking in equities has
slowed steadily over the past three years, the pace of this charge
toward diversification may well be accelerating. Recall that the
movement by institutional investors toward 'alpha' is also a movement
away from 'beta.' "
Since its launch in September of 2003, the State Street Investor
Confidence Index(R) has become a key economic indicator for asset
owners, investment managers and central banks. As the only index
providing a quantitative measure tracking the common buying patterns
of institutional investors around the world, the State Street Investor
Confidence Index(R) offers a unique look into the investment behavior
and decisions of thousands of professional investors and their
investment decisions.
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 are committed to continually advancing the science,
including theory and application of its proprietary investor behavior
research and innovative portfolio & risk management technologies to
helps its clients challenge conventional thinking, shape ideas, make
more informed investment decisions and deliver measurable results.
About the State Street Investor Confidence Index(R):
The index is released globally at 10 a.m. Eastern time in Boston
on the second to last Tuesday of each month. More information on the
State Street Investor Confidence Index, including frequently asked
questions and a calendar of release dates, is available at
http://www.statestreet.com/investorconfidenceindex. The previous
month's calculations for the index are revised to account for trading
activity through the end of the reporting period.
About State Street:
State Street Corporation (NYSE: STT) is the world's leading
specialist in providing institutional investors with investment
servicing, investment management and investment research and trading
services. With $10.1 trillion in assets under custody and $1.4
trillion in assets under management at December 31, 2005, State Street
operates in 26 countries and more than 100 geographic markets
worldwide. For more information, visit State Street's web site 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 related to the pace at which State
Street adds new clients or at which existing clients use additional
services, the value of global and regional financial markets, the pace
of cross-border investment activity, changes in interest rates, the
pace of worldwide economic growth and rates of inflation, the extent
of volatility in currency markets, consolidations among clients and
competitors, State Street's business mix, the dynamics of markets
State Street serves, and State Street's success at integrating and
converting acquisitions into its business. Other important factors
that could cause actual results to differ materially from those
indicated by any forward-looking statements are set forth in State
Street's 2004 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, January 24, 2005, and the
company will not undertake efforts to revise those forward-looking
statements to reflect events after this date.
MULTIMEDIA AVAILABLE:
http://www.businesswire.com/cgi-bin/mmg.cgi?eid=5063130
CONTACT: State Street Corporation
Carolyn Cichon, 617-664-8672
SOURCE: State Street Corporation