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TheStreet Open House

Financial Advisors More Optimistic About U.S. Capital Markets Than Canada In The Year Ahead

Advisors think China poses the greatest economic threat to Canada according to the inaugural Sun Life Advisor Sentiment Index

TORONTO, June 26, 2012 /CNW/ - Canada's financial advisors are more optimistic about the performance of U.S. markets compared to any other major global equity market, including Canada, over the next 12 months according to the Sun Life Advisor Sentiment Index released today by Sun Life Global Investments. The survey, conducted by Ipsos Reid between April 23 to May 4, 2012, measures Canada's financial advisors' sentiments on capital markets and key economic factors.

Seventy-eight per cent of advisors are optimistic about U.S. markets (including the Dow Jones Industrial Average and the S&P 500 Index) compared to 60 per cent of advisors who say they are optimistic about Canada's S&P/TSX Composite.

"How well the U.S. economy is doing continues to surprise many people and Canada's financial advisors are taking notice of this upward trend," said Sadiq S. Adatia, Chief Investment Officer, Sun Life Global Investments. "We have been optimistic about the U.S. markets since last year and think they offer the most opportunities over the other major equity markets, followed by emerging markets."

Advisors see a variety of global economic factors threatening the Canadian economy over the next year. More than half consider a major downturn in China to be among the three greatest threats.

  • Fifty-seven per cent of advisors said a significant slowdown in the Chinese economy could pose a threat to Canada in the next 12 months.
  • Forty-three per cent of advisors said the same about a breakup of the Eurozone.
  • Thirty-nine per cent of advisors said a sovereign debt crisis is among the top three risks to Canada.
  • Weak consumer spending (36 per cent), the price of oil (35 per cent) and inflation (22 per cent) also pose threats to our economy.

"While advisors raise valid concerns, we have also found through our past research that some domestic issues threaten the Canadian economy," said Adatia. "We believe Canadians continue to add debt even though they're already shouldering significantly large amounts. Savings are low and the housing market grows more overheated every day."

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