TORONTO, Nov. 27, 2013 /CNW/ - In recognition of Financial Literacy Month in Canada, Bridgehouse Asset Managers (bridgehousecanada.com) today releases the results of the Bridgehouse Investor Knowledge Index, a new initiative to advance investor knowledge among Canadians.
The survey, conducted for Bridgehouse by Environics Research Group
(Environics), measured 1,004 Canadian investors' understanding of
investment terms and concepts, from the definition of bonds and
equities to dollar-cost averaging and the difference between active
versus passive management.
Participants scored an average of 39%, indicating significant room for
development in investor knowledge. But encouragingly, 72% of
participants noted they would like to learn more about investing to
help them manage their finances more effectively—and 93% want the
education system to include lessons covering basic investing and
financial principles. Bridgehouse is committed to partnering with
financial professionals to meet investor knowledge needs for Canadians
of all ages.
Bridgehouse's president Carol Lynde says, "Advancing investor knowledge
of all Canadians is a strategic focus for our firm. The Bridgehouse
Investor Knowledge Index is our newest initiative emphasizing that
commitment—and is an excellent forum to help identify areas where
investors need more education. It is an easy and effective way to
deepen their investor knowledge."
Bridgehouse Investor Knowledge Index: Key Highlights
While most Canadians were comfortable with the definition of bonds (70%)
and equities (71%), few knew that different tax rates applied to
different types of investment income: only 43% were aware that interest
earnings were taxed at the highest rate, while just 24% knew that
capital gains receive the most favourable tax treatment.
Most investors have a misconception about Canada's relative size in
global equity markets: 27% underestimate its size, 27% overestimate its
size and 23% have no idea what size it is. Dollar-cost averaging—an
effective way of smoothing out the impact of market fluctuations when
contributing to your portfolio—is a concept that is not familiar to
most Canadians (63% got the definition wrong).
As firm believers in the benefits of active management, Bridgehouse was
surprised to discover that more than 62% of Canadians don't know the
difference between active and passive investing.
Eight years after the federal government lifted the foreign content
restriction, 82% of Canadians still believe there are limits in their
portfolios. Although improved from the 2011 Home Bias Survey
commissioned by Brandes Investment Partners & Co., which revealed that
95% of affluent Canadians were not aware the foreign content limit had
been removed, there is still a long way to go to educate Canadians on
their freedom to diversify globally.
"The Bridgehouse Investor Knowledge Index reveals that all
investors—from novice to experienced—can benefit from deeper investor
education," says David MacDonald, Group Vice President at Environics.
"Of 1,004 participants, there were surprisingly no perfect scores,
demonstrating how crucial it is for Canadians to work with their
investment advisors to deepen their investor knowledge and create sound
A version of the survey is now available as a multiple-choice quiz at investorknowledge.ca. All Canadians are invited to test their investor knowledge and see how
they measure up against the average investor—and learn a few crucial
investing tips along the way.
"Stay tuned for more programs from Bridgehouse dedicated to advancing
investor knowledge," Lynde says. "We are determined to work with
advisors to give investors the tools they need to invest smartly for
the long term. The award-winning Brandes Scholarship Program,1 the Bridgehouse Investor Knowledge Index and the quiz are just the
1 IFIC Investor Education Award at the 2012 Canadian Investment Awards
About the Survey
The Bridgehouse Investor Knowledge Index was conducted as an online
survey of 1,004 investors across Canada with investable assets of at
least $25,000. The survey was conducted by Environics Research Group
between October 23 and 30, 2013.
About Bridgehouse Asset Managers
Bridgehouse Asset Managers, a trade name of Brandes Investment Partners
& Co., offers tried-and-true investment solutions to Canadians,
leveraging the expertise of three world-class investment managers. In
everything we do, we consider our clients. We are committed to
partnering with investment professionals to help Canadians reach their
financial goals and become smarter investors.
We are defined by our:
Independence in ownership and thinking, which enables us to truly align with clients' goals, and do the right
thing for client portfolios and businesses—today and tomorrow.
Dedication to advancing investor knowledge, demonstrated through our commitment to developing investor-knowledge
initiatives that help Canadians make informed decisions.
Commitment to our community, dedicating time and financial support to charities that positively
impact the lives of Canadians and make a real difference.
SOURCE: Bridgehouse Asset Managers
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