The defensive shift continues among investors and advisors

Horizons ETFs’ latest poll shows bullishness on fixed income is growing and sentiment on gold has reached an all-time high

The defensive shift continues among investors and advisors

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%.


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