Cautious optimism prevailing among Canadian investors

A report from Manulife indicates that while optimism among Canadian investors is up, safe investment choices remain popular

There’s a popular saying among entrepreneurs and adventurers: “leap and the net will appear.” The same can be said of Canadian investors, though not completely, according to a recent Manulife report.

The company’s recent Investor Sentiment Index revealed that Canadians are more confident about the future performance of equities and fixed-income investments. The report registered a six-point increase in the index in May, noting that it is the largest gain since 2011.

The index, which is based on investor perspectives and confidence levels covering various asset classes, has risen from +16 last December to +22 at the end of May. Stocks (+11) and fixed income (+13) saw the largest surges in investor confidence, as both have risen by ten percentage points over the last half-year.

Quebecers were also seen as particularly upbeat, with 60% of respondents saying that they are on track or ahead of schedule in achieving their financial goals. This is in comparison to 50% for the entire sample of respondents, 41% of whom believe they will be in a better financial position in two years.

“We’re seeing some major differences in Quebec compared to the rest of the country,” notes Philip Petursson, chief investment strategist at Manulife Investments. “The increase in sentiment among Quebecers may be related to the improvements in the province’s economy and labour market.”

Still, Canadian investors are not throwing away their safety nets just yet. For 24% of respondents, cash is the top investment choice for the next 12 months. In addition, 14% report that they are investing less in their RRSPs and 12% are putting less into their TFSAs.

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