Global investor confidence rose 5.5 points to 93.6 in April from March's revised reading of 88.1, based on State Street Investor Confidence Index(R) (ICI). Driving this gain was a surge in confidence among North American institutions, whose confidence increased 10.2 points to 105.8 from the revised March reading of 95.6. In contrast, confidence among European and Asian institutions declined marginally. The European ICI registered a decrease of 3.9 points to 87.8, while the Asian Index fell 2.1 points to 85.2.

"As we commented last month, March saw a more cautious tone among institutional investors, and this led them to hold constant or curtail their equity positions," commented Harvard University professor Kenneth Froot. "The evidence this month suggests that this caution was short-lived. We observed strong buying of equities globally, especially of Japanese and European equities, and even emerging markets returned to favor, though they still lag behind developed markets in terms of flows. While forward-looking growth indicators have softened somewhat, the appetite of institutional investors for holding equities continues to improve."

"The increase in the global ICI this month represents a one-standard deviation move, paced by North American investors who made significant new allocations to equities in the period after April 9th," added Paul O'Connell of State Street Associates. "The North American ICI is now at its strongest level since May 2011. We would note that, at a sectoral level, flows favor defensive sectors, such as utilities, and this may signal some caution around both the natural resource sector, and global growth prospects more generally."

The State Street Investor Confidence Index was developed by Froot and O'Connell. It measures investor confidence or risk appetite quantitatively by analyzing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.