Increased volatility in the first quarter (Q1) of 2018 has made advisors much less bullish in Q2, according to the Q2 2018 Advisor Sentiment Survey conducted by Toronto-based Horizons ETFs Management (Canada) Inc.
For the survey, Horizons asked Canadian investment advisors for their expectations of returns — bullish, bearish or neutral — on distinct asset classes for Q2 which ends on June 30.
The bullish sentiment of Canadian advisors declined for both Canadian and U.S. equity indices.
In the Q2 Survey, 48% of advisors stated they were bullish on the S&P/TSX 60 index, compared to 65% who were bullish in the Q1 2018 Advisor Sentiment Survey, which was consistent with performance, where the index dropped 5.28% over QI.
For U.S. equities, advisors’ bullish sentiment for the S&P 500 Index also fell significantly heading into Q2, moving to 56% from 65% last quarter. Likewise, the percentage of advisors bullish on the NASDAQ 100 index dropped to 57% from 65% in Q1.
Performance in QI for U.S equities was relatively flat, where the S&P 500 index declined 1.22% and the NASDAQ 100 index increased slightly, up 2.89%.
“The high levels of volatility that we recently saw in the Canadian and U.S equity markets has likely reduced the enthusiasm that advisors have for North American stock markets,” says Steve Hawkins, president and co-CEO of Horizons ETFs, in a statement.