Following a relatively flat quarter, advisors have turned “quite bullish” on Canadian equities, energy and a number of other industry benchmarks, according to the Q4 2017 Advisor Sentiment Survey conducted by Horizons ETFs Management (Canada) Inc and released Oct. 17.
The survey asked Canadian investment advisors for their expectations of returns – bullish, bearish or neutral – on 14 distinct asset classes for the upcoming quarter (Q4 2017), which ends Dec. 31.
Bullish on the Canadian blue-chip equity index
Canadian investment advisors have turned positive on equity indices “after extremely high levels of bearish sentiment” in the Q3 2017 Advisor Sentiment Survey. On the S&P/TSX 60™ Index, 62 per cent of advisors in the Q4 survey stated they are bullish on the Canadian blue-chip equity index, compared to the 42 per cent surveyed last quarter.
Bullish sentiment on Canadian financials and energy has also picked up since last quarter, rising to 62 per cent from 54 per cent on financials (Q4 Survey versus Q3 Survey), as represented by the S&P/TSX Capped Financials Index, and 53 per cent versus 40 per cent on energy equities, as represented by the S&P/TSX Capped Energy Index, which rose 10.48 per cent over the quarter.
Oil recovering from 2016 lows
"Advisors have watched oil recover from its 2016 lows and believe that the valuations of Canadian blue chips are at compelling levels," said Steve Hawkins, President and Co-CEO of Horizons ETFs. "We will likely see ETF asset flows follow this sentiment heading into Q4."