Investor optimism in Canada has reached its highest point in 5 years, new research shows.
Manulife’s Investor Sentiment Index increased by 6 points to +22 in May from +16 last December, the largest rise since 2011. Canadians’ confidence in nearly all investment types increased, with the largest spikes in stocks (+11) and fixed income (+13); both increased by 10 percentage points in the last six months.
“Optimism is growing amongst Canadians when it comes to investing,” said Philip Petursson, Chief Investment Strategist, Manulife Investments. “As oil prices have rebounded, so has the Canadian equity market and the Canadian dollar. Investor sentiment seems to be feeding off these improvements.”
Manulife’s semi-annual index of investor sentiment which has been published since 2000, increased by 6 points to +22 in May from +16 last December. The index is based on investor views on a range of asset classes and their confidence in these areas.
Sentiment across the country
In the past six months, sentiment in Atlantic Canada (+28) had the largest increase and is up eight points, closely followed by Quebec (+16) which is up seven points. An increasing number of Canadians feel they are on track with or ahead of their financial goals (50 per cent) and also to feel that they will be in a better financial position in two years (41 per cent).
Six in 10 Quebec investors say they are on track or ahead of schedule with their financial goals, higher than the Canadian average of 50 per cent.
“We’re seeing some major differences in Quebec compared to the rest of the country,” said Petursson. “The increase in sentiment among Quebecers may be related to the improvements in the province’s economy and labor market.”
Popular investment choices
While sentiment around investing is up, there remains a cautious tone. Cash remains the most popular type of investment for the next 12 months at 24 percent. Investors stated they like to have cash on hand when needed (19 per cent) and there is no investment risk which makes them feel secure (14 per cent).