TORONTO – One of Canada’s biggest insurance and financial services companies says nervousness among Canadian investors has risen to levels not seen because the financial crisis.
Manulife Financial says that Canadian investors have lost confidence in mutual funds, exchange-traded funds and balanced mutual funds in the last 6 months.
It also suggests that housing is viewed as a less attractive investment, while confidence in fixed income investments has stayed about the same.
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The report is based on Manulife’s semi-annual index of investor sentiment index, which dropped to 16 in December from 19 last May.
The index is dependant on investor thoughts about a range of asset classes in addition to their confidence during these areas.
Regionally, investors in Ontario and also the Atlantic provinces were probably the most optimistic with a score of 20, while Quebec ranked lowest at nine. Alberta was second lowest at 14.
The skittishness among investors comes as stock markets took a beating and Canadians head toward the RRSP contribution deadline on Feb. 29.
The Toronto Stock market continues to be under pressure recently and sits about five percent lower in contrast to where it began the entire year and nearly 20 per cent lower than its highs of last year.
At the same time frame, the Canadian dollar has managed to hit lows not observed in greater than a decade in recent weeks.
“Canadian investors are facing a long list of uncertainties, including tremendous volatility both in oil prices and the worth of the Canadian dollar,” said Frances Donald, senior economist for Manulife Asset Management.
The poll also suggested that many Canadians are worried about the future direction of interest rates.
“The Bank of Canada continues to be suggesting that rates of interest are on hold or might even fall further within the coming year,” Donald said.
“Yet, interestingly, 40 per cent of Canadian investors still expect rates of interest to increase, highlighting the ongoing uncertainty round the interest rate outlook.”
The semiannual Manulife index was based on an online survey done in December 2015 by Environics Research.
The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys can’t be assigned a margin of error because they do not randomly sample the population.
