Briefly:

Previously: | MON | TUE | WED | THU |

The latest bit of good news that is trickling out points to growing investor confidence on three continents.

Global investor confidence rose by 9.4 points from a revised March level of 70.2 in the State Street Investor Confidence Index for April 2009.

According to State Street, confidence is up in all three regions that were tracked. Amongst North American investors, the benchmark rose 10 points from 60.2 to 70.2, while European investors posted an increase of 5 points from 63.9 to 68.9. In Asia, the index rose by 0.7 points from 86.6 to 87.3.

“The data reveal that institutional investors have participated with some enthusiasm in the recent market recovery,” says Ken Froot of State Street Associates. “For example, monthly flows into U.S. stocks are currently in the 98th percentile. Our measure of investor confidence, which goes beyond pure measure of flow, shows that the foundation for this rally was laid with the turnaround in risk appetite that began last September.”

However, Paul O’Connell of State Street Associates cautions that institutional investors are not yet out of the woods.

“Despite this month’s increase in the global index, the third in four months, we think there is room for some caution,” he says. “This month is the first since September 2008 in which institutional investors globally increased their allocation to risky assets, but significant questions remain about the path and pace towards recovery, both in the U.S. and further afield.”

The State Street Investor Confidence Index measures investor confidence on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors.

• • •

DynamicEdge cuts minimum

Dynamic Funds has reduced the minimum required to make an initial investment in its DynamicEdge Portfolios—from $10,000 to $5,000.

The decision was made to allow investors to choose the portfolios for Tax-Free Savings Accounts.

• • •

Institutional investors looking to return to equities

A significant number of institutional investors expect to increase their equity exposure over the next year.

The latest Pension Funds & Insurance Asset Allocation survey of institutional investors in Europe and North America (conducted by financial services consulting firm bfinance) reveals that 46% of pension funds anticipate an increase in their equity exposure while 35% anticipate a drop over the next 12 months.

Also, investor preference for fixed income products is expected to slide during the same period, while alternative asset classes, such as infrastructure and private equity, are expected to grow in popularity.

“We see that almost half of the respondents anticipate an increase in their equity exposure in the coming year, which contrasts significantly with 19% in our survey last October,” says Marc Godin, managing director for Canada with bfinance. “This change in investor sentiment may indeed reveal investors believe that the worst of the financial crisis is behind us.”

Forty-four percent of pension funds saw their allocation to fixed income increase since October’s survey. One-quarter of respondents expect an increase in their bond exposure compared to 42% who foresee a decrease over the next year. Twenty-four percent of respondents have increased their infrastructure exposure since the last survey and 16% increased their private equity exposure.

(04/21/09)