Survey shows increased optimism on domestic and emerging-market equities
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A new survey of Canadian investment advisors has revealed an uptick in confidence going into the fourth quarter.
According to the Q4 2017 Advisor Sentiment Survey conducted by Horizons ETFs, Canadian investment advisors have a bullish outlook on seven out of 14 distinct asset classes. Furthermore, the poll showed mostly increased optimism for Canadian asset classes, as well as emerging markets.
There was a significant rise in positive sentiment for Canadian blue-chip equities, with 62% of respondents being bullish on the S&P/TSX 60 Index for Q4 as compared to the 42% tallied for Q3. The percentage of respondents bullish on Canadian financials for Q4 also stood at 62%, rising from 54% last quarter.
According to Horizons President and Co-CEO Steve Hawkins, expectations for Canadian energy has improved overall as advisors have watched oil recover from its 2016 lows. Expectations for crude oil have risen by 12% to reach 53% as the commodity’s price reached US$52.95 as of Sept. 30. Reported confidence in natural gas picked up the most, rising to 47% from 21% last quarter — even though prices of the commodity fell 0.92% in Q3.
An anticipated global oil recovery has also buoyed the outlook for emerging markets. Consistent with a 7.02% rise in the MSCI Emerging Markets Index, 63% of advisors reported bullishness on emerging-market equities. “We will see interest in emerging markets continue to grow, especially as these equities are relatively cheap compared to those in North America.” Hawkins said.
Recovering commodity prices, in concert with rising interest rates, helped the loonie gain a positive return of 3.96% against the dollar. In spite of that, 55% of respondents projected that the Canadian dollar will decline in value. According to Hawkins, Canadian advisors are concerned that the Bank of Canada would be unable to follow a possible US rate hike, especially given the mortgage balances many Canadians face.
Of course, there’s still uncertainty surrounding the Federal Reserve’s next moves as it’s due to announce a new chairperson in the coming months. That, coupled with current concerns about rising interest rates, has made 50% of advisors bearish on the S&P US Treasury Bond 7-10 Year Index (total return), which went up some 0.45% during the previous quarter.
Advisors remained lukewarm on US equities, with 53% and 51% reporting bullishness on the S&P 500 and NASDAQ 100 Indexes, respectively. The S&P 500 posted year-to-date growth of 14.04%, while the NASDAQ 100 surged by 22.94%.
“Advisors continue to hold their breath when it comes to US equities and appear to be waiting for a correction,” said Mr. Hawkins. “Despite the strong performance equities have shown, sentiment reflects the hesitancy or flat nature we see in flows for this asset class.”
For more of Wealth Professional's latest industry news, click here.
Related stories:
Global oil supply rises from steady US production
Morningstar shows energy rose in September
According to the Q4 2017 Advisor Sentiment Survey conducted by Horizons ETFs, Canadian investment advisors have a bullish outlook on seven out of 14 distinct asset classes. Furthermore, the poll showed mostly increased optimism for Canadian asset classes, as well as emerging markets.
There was a significant rise in positive sentiment for Canadian blue-chip equities, with 62% of respondents being bullish on the S&P/TSX 60 Index for Q4 as compared to the 42% tallied for Q3. The percentage of respondents bullish on Canadian financials for Q4 also stood at 62%, rising from 54% last quarter.
According to Horizons President and Co-CEO Steve Hawkins, expectations for Canadian energy has improved overall as advisors have watched oil recover from its 2016 lows. Expectations for crude oil have risen by 12% to reach 53% as the commodity’s price reached US$52.95 as of Sept. 30. Reported confidence in natural gas picked up the most, rising to 47% from 21% last quarter — even though prices of the commodity fell 0.92% in Q3.
An anticipated global oil recovery has also buoyed the outlook for emerging markets. Consistent with a 7.02% rise in the MSCI Emerging Markets Index, 63% of advisors reported bullishness on emerging-market equities. “We will see interest in emerging markets continue to grow, especially as these equities are relatively cheap compared to those in North America.” Hawkins said.
Recovering commodity prices, in concert with rising interest rates, helped the loonie gain a positive return of 3.96% against the dollar. In spite of that, 55% of respondents projected that the Canadian dollar will decline in value. According to Hawkins, Canadian advisors are concerned that the Bank of Canada would be unable to follow a possible US rate hike, especially given the mortgage balances many Canadians face.
Of course, there’s still uncertainty surrounding the Federal Reserve’s next moves as it’s due to announce a new chairperson in the coming months. That, coupled with current concerns about rising interest rates, has made 50% of advisors bearish on the S&P US Treasury Bond 7-10 Year Index (total return), which went up some 0.45% during the previous quarter.
Advisors remained lukewarm on US equities, with 53% and 51% reporting bullishness on the S&P 500 and NASDAQ 100 Indexes, respectively. The S&P 500 posted year-to-date growth of 14.04%, while the NASDAQ 100 surged by 22.94%.
“Advisors continue to hold their breath when it comes to US equities and appear to be waiting for a correction,” said Mr. Hawkins. “Despite the strong performance equities have shown, sentiment reflects the hesitancy or flat nature we see in flows for this asset class.”
For more of Wealth Professional's latest industry news, click here.
Related stories:
Global oil supply rises from steady US production
Morningstar shows energy rose in September
