Horizons ETFs’ latest poll shows bullishness on fixed income is growing and sentiment on gold has reached an all-time high
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Defensiveness continues to be the watchword for Canadian investors and advisors heading into the final months of the year, according to new findings by Horizons ETFs.
Based on its fourth-quarter 2019 Advisor and Investor Sentiment Surveys, the firm found a significant upward trend in sentiment on gold bullion spot prices. Advisor bullishness on Gold Bullion stood at 35% in Q1 2019, and has risen 23% since. Among investors, confidence in gold hasn’t faded throughout the year, with bullishness on the metal hitting 60% — its highest rating ever among the cohort — in the fourth quarter.
Silver has maintained a similar bullish standing among investors from Q1 to Q4, ending the year at 50% bullishness.
Looking at fixed income, as represented by the Solactive US 7-10 Year Treasury Bond Index, attitudes have swung from outright bearish lows after Q3 2019 performance of 2.73%. From a previous result of 16% bullishness and 48% bearishness, advisors have shifted to 29% bullishness, putting it on equal footing with bearish outlooks. In contrast, investors have expressed further pessimism, signalling a -5% pullback on an already bearish footing.
After Canadian equity indices posted stronger average returns than the S&P 500 and NASDAQ 100 in Q3 2019, Canada’s stock market has strengthened its case among advisors and investors alike on a range of measures.
Among advisors, the survey found an 8% uptick in bullishness toward the S&P/TSX 60, as well as 3% growth in bullishness on Canadian banks through the S&P/TSX Capped Financials Index. Investors also took more of a shine to gold as they expressed 60% bullishness on the S&P/TSX Global Gold Index.
But Canadian energy has lost favour among advisors and investors alike, as the S&P/TSX Capped Energy Index ended Q3 2019 with a weak -2.15% showing.
The S&P 500 and NASDAQ 100 registered tepid Q3 performances with 1.7% and 1.29% returns, respectively. With that, advisors have pared back their overweight U.S. equity bullishness, shown by a -8% change in their bullish stance for the S&P 500 and -9% for the NASDAQ-100. Investors were more forgiving, tweaking their bullish positions by -1% for both indices.
With a seasonally strong period rolling in for natural gas, investors and advisors both registered bullish growth. Advisors became bulls as they placed 10% greater confidence on the commodity; investors took a similar turn with 9% more confidence.
Crude oil, meanwhile, went through a 7.53% rout, prompting both advisors and investors to withdraw some support. While still outright bullish, investors moderated their optimism with a -4% adjustment, while advisors retreated by -9%.
Meanwhile, the previously high-flying cannabis sector has crashed with the -36.07% performance of the North American Marijuana Index over Q3 2019. Investors’ bullishness on the space went through a drastic -15% drop, though bulls still edged out bears 43% to 39%. The pot sector’s troubles have only reinforced the bearish position held by advisors since the Q3 2019 survey, with bearishness rising by 3% to reach 42%.