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Investor Confidence Index

August 25, 2009 09:51 GMT

Investor Confidence Index Rises from 119.4 to 122.9 in August

Boston, August 25, 2009 – State Street Global Markets, the investment research and trading arm of State Street Corporation (NYSE:STT), today released the results of the State Street Investor Confidence Index^®for August 2009.

Global Investor Confidence rose by 3.5 points to 122.9 from July's level of 119.4. Looking across the regions, the confidence of North American institutional investors declined slightly by 2.2 points from 120.6 to 118.4, a decline echoed among Asian investors, whose confidence fell 2.3 points from 94.1 to 91.8. By contrast, European institutional investors displayed increased risk appetite, and their confidence benchmark rose 4.3 points to 109.2 from 104.9 last month.

Developed through State Street Global Markets' research partnership, State Street Associates, by Harvard University professor Ken Froot and State Street Associates Director Paul O'Connell, the State Street Investor Confidence Index measures investor confidence on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors. The index is based on financial theory that assigns precise meaning to changes in investor risk appetite, or the willingness of investors to allocate their portfolios to equities. The more of their portfolio that institutional investors are willing to devote to equities, the greater their risk appetite or confidence.

"This month's increase represents the eighth consecutive improvement in Global Investor Confidence, and places the risk appetite of institutional investors firmly in the range that is associated with accumulation of risk exposures," commented Froot. "At the same time, the rate of increase in the Index has moderated relative to some months ago, suggesting that institutions are being somewhat selective in their allocations."

"This month we note some increased regional variation across the Indices," added O'Connell. "While European institutional investors continued to 'catch up' with their North American counterparts, in terms of reallocating out of cash, North American and Asian institutions displayed some ambivalence about further reallocations, given trends over the last six months. Keeping in mind that a level of 100 denotes 'neutral' for the Index – the level at which investors are neither reducing nor increasing their allocations to risky assets – we can see European confidence remains somewhat below that of North American institutions, and that caution prevails in Asia."

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 is committed to continually advancing the science, including theory and application of its proprietary investor behavior research and innovative portfolio & risk management technologies to help its clients challenge conventional thinking, shape ideas, make more informed investment decisions and deliver measurable results.

About the State Street Investor Confidence Index^®

The index is released globally at 10 a.m. Eastern time in Boston on the last Tuesday of each month. More information on the State Street Investor Confidence Index is available at http://www.statestreet.com/investorconfidenceindex.

About State Street

State Street Corporation (NYSE: STT) is the world's leading provider of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $16.4 trillion in assets under custody and administration and $1.6 trillion in assets under management at June 30, 2009, State Street operates in 27 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 set forth in State Street's 2008 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, August 25, 2009, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

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