16th annual Manulife Investor Sentiment Index
Toronto, ON (Aug. 2, 2016) – Manulife’s Investor Sentiment Index experienced the largest increase since 2011, (increased by 6 points overall to +22 in May from +16 last December). 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 overall to +22 in May from +16 last December. The index is based on investor views on a range of asset classes as well as 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 labour market.”
Popular investment choices
While overall 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).
“Although investor sentiment seems to have improved with the Canadian equity market, the interest in cash may imply that investors are still wary about taking on more risk,” said Petursson.
ETF’s have climbed out of negative territory compared to the December 2015 survey results, hitting an all-time high on the index (4 points). However, 14 per cent of Canadians say they are investing less in their RRSPs and 12 per cent are putting less into their TFSAs.
Top concerns for Canadian investors are:
- 27 per cent said they want to manage their current lifestyles.
- 20 per cent said they were concerned with running out of money in retirement. Though, the number of Canadians who are concerned about running out of money in retirement and entering into retirement with debt decreased by five per cent (from 37 per cent to 32 per cent) since 2014.
Investor Sentiment Jumps the Most in Five Years: Survey (Manulife Financial Corporation)
Millenials feel optimistic about their futures
Younger Canadians (25-34) are feeling more optimistic about their financial situations than older Canadians. Millenials (40 per cent) feel they will be in a better financial situation than they were two years ago, whereas only 25 per cent of respondents aged 55+ feel the same. Six in 10 millenials feel they will be in a better financial position two years from now.
Millennials are less likely than other age groups to plan renting over owning a home (52 per cent), and more likely (39 per cent) to buy a house in the next 12 months.
For more information and historical data, click here.
About the Manulife Investor Sentiment Index
Now in its 16th year, the Manulife Investor Sentiment Index is a semi-annual measure of investors’ views on a range of asset classes, and savings and investment vehicles, as well as their confidence in these areas. The general population data is representative of all Canadians and is based on an online survey of 1,500 respondents who were at least 25-years-old. The survey was conducted in May 2016 by Environics Research.
About the Manulife Financial Wellness study
As a leading international financial services company, Manulife surveys consumers around the world to better understand what is important to our customers. For the past 16 years, the Manulife Investor Sentiment Index has been conducted in Canada and across Asia, gathering views on a range of asset classes, savings and investments. The Manulife Bank Debt Survey is a semi-annual overview of debt and savings priorities of Canadian homeowners. The annual Manulife Small Business Research Report helps advisors meet customers’ needs by better understanding of the challenges facing entrepreneurs, professionals and small business owners. Manulife’s Financial Wellness Study established a benchmark in 2015 to measure the financial wellness, overall health, and productivity of employees of our Institutional customers.
Manulife Financial Corporation is a leading international financial services group providing forward-thinking solutions to help people with their big financial decisions. We operate as John Hancock in the United States, and Manulife elsewhere. We provide financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions. At the end of 2015, we had approximately 34,000 employees, 63,000 agents, and thousands of distribution partners, serving 20 million customers. At the end of December 2015, we had $935 billion (US$676 billion) in assets under management and administration, and in the previous 12 months we made more than $24.6 billion in benefits, interest and other payments to our customers. Our principal operations are in Asia, Canada and the United States where we have served customers for more than 100 years. With our global headquarters in Toronto, Canada, we trade as ‘MFC’ on the Toronto, New York, and the Philippine stock exchanges and under ‘945’ in Hong Kong. For more information, visit manulife.com.
SOURCE: Manulife Financial Corporation