After a somewhat flat third quarter (Q3), investment advisors in Canada are more and more bullish on Canadian equities, energy and other benchmarks, according to Toronto-based Horizons ETFs Management (Canada) Inc.’s Q4 2017 Advisor Sentiment Survey.
The survey, which polls advisors on their expectations of return for each quarter, found that 64% of advisors are bullish on the S&P/TSX 60 index for the fourth quarter (Q4), up notably from 42% in Q3.
Likewise, advisors’ sentiment on Canadian financial and energy stocks have also risen quarter-over-quarter. Specifically, 62% of advisors are bullish on financials, as
represented by the S&P/TSX capped financials index, up from 54% in Q3. And 53% of advisors rated themselves as bullish on energy equities (compared with 40% in Q3), as represented by the S&P/TSX capped energy index, which increased by 10.5% over the quarter.
“Advisors have watched oil recover from its 2017 lows and believe that the valuations of Canadian blue chips are at compelling levels,” says Steve Hawkins, president and co-CEO of Horizons ETFs, in a statement. “We will likely see ETF asset flows follow this sentiment heading into Q4.”
Although 41% of advisors were bullish on crude in Q3, they appear much more optimistic this time around, with 53% saying they’re bullish on the commodity. This likely reflects the commodity’s performance as crude oil prices rose by 12.3% last quarter to US$52.29 a barrel as of Sept. 30.
“Oil supply and demand has come more into balance over the last quarter, and we see that reflected in the advisors’ growing bullishness for the asset class,” Hawkins adds. “Oil hovering around the US$50 mark is no longer just a spike, but a new longer-term reality.”
Sentiment toward natural gas rose even higher, with 47% of advisors saying they’re bullish on the commodity compared with 21% in Q3. However, prices of natural gas have dipped by 0.92%.
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