Global institutional investor confidence eased slightly in March following a three-month surge, the State Street Investor Confidence Index (ICI) has shown.
The ICI, which tracks confidence through the patterns buying and selling of equities by institutions globally, bottomed out in November last year at 80.5 (where 100 is neutral).
Three months of improvements took the ICI to 91.4 last month, but slipped 3.4 points in March to 88.0 on the back of a fall in confidence in North America, which dropped 4.2 points to 95.5.
European confidence was steady, easing 0.4 points to 91.7 while risk appetite among Asian institutional investors increased slightly, rising 1.8 points to finish the month at 87.3.
"Investors have had to contend with three setbacks emanating from Europe over the past month: the Italian election result on February 25, President [Mario] Draghi's (president of the European Central Bank) comments on March 7, and the announcement of Cypriot bailout conditions on March 15," said index co-developer Kenneth Froot of Harvard University.
"Institutional investors continued to accumulate equities up until March 7, but thereafter adopted a more cautious tone. It remains to be seen whether this will mark a consolidation of positioning in advance of a further round of risk taking, or a more meaningful pause in risk appetite," he said.
Paul O'Connell of State Street Associates said investor confidence is well illustrated by the data on emerging markets equity allocations.
"After a virtually unbroken stream of 'buying' days this year, institutional investors have held their allocations to emerging markets constant in the most recent weeks," Mr O'Connell said.
"European and Asian investors remain somewhat less optimistic than their North American counterparts, and across all groups, the heavy selling of fixed income securities observed in February has tapered towards zero."
