Global investor confidence continued to rise in June, with sentiment up most strongly among European and North American investors, according to research by State Street Global Markets – the investment research and trading arm of State Street Corporation.

According to the State Street Investor Confidence Index, globally investor confidence rose by 7.0 points from a revised May reading of 108.5 to reach 115.5. Confidence rose most strongly in Europe, where the benchmark rose 9.1 points to 95.0, while the reading for North American investors climbed 6.2 points from 107.4 to 113.6. Conversely, in Asia, risk appetite was down slightly, falling 1.3 points to 92.1 from May’s reading of 93.4.

The State Street Investor Confidence Index measures investor confidence on a quantitative basis by analysing the buying and selling patterns of institutional investors. Underpinning the index’s methodology is the assumption that the more of their portfolio institutional investors are willing to devote to equities, the greater their risk appetite or confidence - a level of 100 being “neutral”.

“June marks the third consecutive month that the Global Index has remained above the neutral level of 100, the level above which institutional investors are increasing their allocations to risky assets,” said Ken Froot of State Street Associates, one of the developers of the Index.

“Notwithstanding some concerns around the long-run sustainability of fiscal positions and the impact of quantitative easing on inflation, institutional investors continue to endorse the long-run outlook.”

Paul O’Connell, co-developer of the Index, said that institutional investor confidence has consistently led measures of consumer confidence since the onset of the financial crisis in mid-2007 by one to two months, and it continues to do so now.

“For example, North American investor confidence bottomed in December, while the Conference Board’s measure of consumer confidence did not turn up until February. Likewise in Europe, the European Investor Confidence Index has led the European Commission’s Economic Sentiment Indicator through the cycle. This quarter’s increase of 21.3 points is the best showing for the European Index since the third quarter of 2006,” Mr O’Connell said.