Manulife Investor sentiment climbs most in 5 years

Manulife’s investor sentiment index made big gains this year, making the biggest jump since 2011, the firm says.

The index edged up six points to a reading of 22 in May, rising from 16 in December, on higher oil prices and climbing equities.

Confidence rose for almost all types of investments as sentiment toward both stocks and fixed income rose by 10 points each, according the company’s semi-annual reading released Monday.

“The TSX has outperformed most of its global peers year-to-date, and this just rolls into overall investor sentiment in Canada,” says Philip Petursson, chief investment strategist for Manulife Investments.

Read: U.S. slowdown will weigh on Canadian growth

The firm says 50% of Canadians feel they are either on track or ahead in their financial goals, and that optimism gained particularly in Atlantic Canada and Quebec.

While optimism is up, investors remain cautious, Manulife says, with cash identified as the most popular investment for the next 12 months.

Manulife forecasts crude prices of US$55 per barrel by the end of the year, even as oil prices retreated significantly in July below US$42 per barrel on excess energy supplies.

“You can’t go in one direction as much as oil had in such a short period of time, without a little bit of a retracement,” Petursson says. “We’ve seen a rally in the U.S. dollar, and oil has an inverse correlation to the U.S. dollar.”

Read: Oil prices heading for another slide?

Of those surveyed, 27% say they want to “manage their current lifestyles” while 20% say they’re “concerned with running out of money in retirement.”

The findings are based on an online survey of 1,500 adults in May who were at least 25 years old.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.