Advisors favour U.S. equities over Canadian stocks for the next 12 months, according to a survey released today by Sun Life Global Investments (Canada) Inc. (SLGI).

According to the survey, Advisor Sentiment Index Report 2012, about 78% of the 475 Canadian advisors surveyed were optimistic about the performance of U.S. equities during the 12 months ending June 2013, whereas only 60% were bullish on the performance of Canadian stocks during the same period.

Overall, seven out of 10 advisors have a bullish view of global trading markets for the year ahead.

The increased pessimism among advisors regarding Canada’s future stock market performance indicates that they have lessened their home country bias, said Sadiq Adatia, chief investment officer of SLGI.

“It was nice to see that advisor aren’t overly bullish on Canada…they are more concerned with global trends that could impact the Canadian economy.”

When asked to identify the largest threats to the Canadian economy, 57% of survey respondents pointed to a “significant slowdown in the Chinese economy”, 43% named the breakup of the Eurozone and about 39% cited the sovereign debt crisis.

Overall, more than half of the advisors surveyed (55%) were “somewhat bullish” on Canadian equities as a whole, vs 5% who were “very bullish.”

“While we only asked advisors about the coming year, they were still answering these questions from a long-term perspective,” said Adatia. “Even though debt isn’t a problem for Canada today, they may have listed that concern with the future in mind.”

When asked about their clients’ preferences for risk, about half of advisors (48%) stated their clients are more risk averse today than they were before the downturn of 2008. Meanwhile, 38% of advisors said that their clients’ preferences towards risk have remained unchanged.

Clients are more bearish than advisors when it comes to the state of the market. Only 23% of advisors said their clients were positive about equity performance in North America over the next year, while 37% were bearish about the state of the markets.

When asked to name the top three worries that their clients have about investing, advisors cited: fear of losing their capital (62%); fear that investment performance won’t be enough to achieve their lifestyle goals (61%); and insufficient funds retirement funds (60%).

“By knowing how advisors and their clients view the markets, we can create funds that fit a client’s risk appetite and helps them meet their retirement goals,” added Adatia.