Advisors’ optimism rose sharply in the last six months, reflecting their increasingly positive outlook on the economy, investing and client attitudes, according to a Charles Schwab survey of independent registered investment advisors (RIAs) released Monday.
The ninth semi-annual Schwab Independent Advisor Outlook Study reported that 77% of advisors surveyed expected the S&P 500 to rise in the next six months, up from 63% in the previous survey in July 2010.
Schwab’s survey of more than 1,300 RIAs representing $284 billion in assets under management also showed that more than half of advisors, or 56%, classified themselves as stock market “bulls,” while only 10% saw themselves as “bears” over the next six months.
“While there is still uncertainty in the markets and in various parts of the world, independent investment advisors clearly think we are turning the corner economically,” said Bernie Clark (left), executive vice president and head of Schwab Advisor Services, in a statement.
Themes from the survey showed that advisors continued to embrace exchange-traded funds (ETFs) and to focus on large-cap stocks, and their clients also were more upbeat about investing.
ETFs continue to be the investment vehicle of choice for RIAs, with 84% of those surveyed saying they currently use ETFs. Alternative investments ranked second among advisors as the investment vehicle in which they expect to invest more, followed by actively managed mutual funds.
RIAs said they planned to invest more in equities over the next six months, with 39% of advisors likely to invest more in domestic large-cap stocks compared to 27% in July 2010. Twenty-eight percent plan to invest more of their portfolio in
international large cap in emerging markets. More than half, or 56%, of advisors plan to maintain their current investment exposure in China. And as the European debt crisis continues to make headlines, 47% will maintain their current investment exposure to Europe.
Advisors expect the energy sector to perform best over the next six months, followed by information technology and financials. Enthusiasm for the consumer staples and utilities sectors has diminished significantly with only 15% ranking consumer staples and 9% ranking utilities in their top three sectors.