Franklin Templeton Releases Results of 2014 Global Investor Sentiment Survey
TORONTO, April 9, 2014 /CNW/ - Canadian investors have a more bullish outlook for the markets compared to 2013, yet are also more risk averse when it comes to their investment portfolios, according to Franklin Templeton's 2014 Global Investor Sentiment Survey.
Nearly two-thirds (65 per cent) of Canadian investors think Canada's stock market will be up in 2014 compared to 60 per cent who thought their market would be up for the year when asked in 2013. Interestingly, Canadian investors aged 65 and older are most likely to think that the market will increase this year. Globally, 62 per cent of investors believe their local stock market will experience positive performance in 2014.
This positive outlook transcends into investors' long-term financial view. The overwhelming majority of Canadian investors (81 per cent) are optimistic about reaching their personal financial goals, roughly on par with investors in the US (84 per cent) and globally (80 per cent) who hold this view.
One of the largest annual surveys of its kind, the 2014 Franklin Templeton Global Investor Sentiment Survey polled 11,113 investors in 22 countries across Africa, Asia Pacific, the Americas and Europe on their current attitudes towards investing and their expectations for 2014 and the decade ahead.
Conservative Investment Strategies Prevail amid Growing Return Expectations
Canadian investors expect higher returns from their investments this year than they did last year, and even higher average returns looking out over the next 10 years. However, they continue to cling to conservative investment strategies, though to a lesser degree than last year.
Specifically, 44 per cent of investors surveyed plan to be more conservative with their investments in 2014, which is double the amount of investors who indicated that they would become more aggressive (22 per cent)—the balance of respondents (34 per cent) don't plan to make any changes to their investment strategy. Canadians, however, are trending less conservative than investors globally, 52 per cent of whom are planning to adopt a more conservative strategy this year.
"Canadians are living longer, healthier lives than ever before and that means they will need their retirement savings to last longer," said Philip Bensen, head of National Sales - Canada for Franklin Templeton Investments. "So being overly conservative in such a low interest rate environment raises the possibility that some investors might outlive their retirement savings. Renewed enthusiasm for stocks is encouraging, as many investors will need the higher potential returns that stocks have historically provided over the long term."
Stocks Top Asset Class Expectations over Short- and Long-Term
Canadian investors believe stocks, non-metal commodities and property will be the top performing asset classes both in 2014 and over the next 10 years. Looking at stocks in particular, Canadians are more bullish about stocks for this year and in the next decade than they had been in 2013. Canadians are also more likely than their global counterparts to rank stocks as expected top performers.
|Expected Top-Performers 2013||Expected Top-Performers 2014|
|1. Stocks - 55 per cent||1. Stocks - 62 per cent|
|2. Precious Metals - 55 per cent||2. Property - 47 per cent|
|3. Non-metal commodities - 51 per cent||3. Non-metal commodities - 43 per cent|
|Expected Top-Performers 2013||Expected Top-Performers 2014|
|1. Precious Metals - 53 per cent||1. Stocks - 55 per cent|
|2. Real estate - 51 per cent||2. Real estate - 52 per cent|
|3. Stocks - 50 per cent||3. Precious metals - 39 per cent|
"By working closely with their financial advisors, Canadians can develop strategies that strike the right balance between growth and income to support their personal retirement goals," said Bensen.
Canadian Investors Largely Prefer to Stay Close to Home, but Eye Asian Equities
In Canada, while to a lesser degree than they did in 2013, investors believe that the best opportunities for equity and fixed income returns continue to be in their domestic market. When asked to consider a variety of regions and countries, over a third (35 per cent) of Canadian investors indicated they believe Canada will offer the best equity returns in 2014 and over a fourth (26 per cent) hold that view over the next decade. Looking at fixed income, over a third of Canadian investors believe Canada will have the best returns in 2014 (38 per cent) and over 10 years (35 per cent).
At the same time, Canadian investors are increasing their expectations for US equity and fixed income market performance, compared to their expectations in 2013—though the large fiscal debt ranked as their chief concern about investing in the US. Looking out over the next 10 years, however, Canadians believe Asia will have the best equity market returns globally, but still think Canada will have the best fixed income returns.
By means of comparison, US investors are even less keen than Canadians to invest abroad, with over half of Americans believing the best equity and fixed income investment opportunities will be found at home in 2014 and in the next decade, with Asia coming in at a distant second for both asset classes. And in stark contrast, investors in South Africa and Italy showed the greatest interest in investing abroad, with at least 80 per cent believing that the best equity and fixed income opportunities exist beyond their borders next year and in the coming decade.
Reiterating their home country bias, when given the choice of several asset classes, Canadian investors are most likely to say that they will add or increase investments in equities in their country, with over one-fourth of Canadian investors expecting to add to or increase their investments in domestic equities in 2014.
The Franklin Templeton Global Investor Sentiment Survey, conducted by ORC International, included responses from 11,113 individuals in 22 countries: Brazil, Chile and Mexico in Latin America; Australia, China, Hong Kong, India, Japan, Malaysia, South Korea and Singapore in Asia Pacific; France, Germany, Greece, Italy, Poland, Spain, Sweden and the UK in Europe, South Africa, and the United States and Canada in North America. Survey respondents were between the ages of 25 and 65 in Latin America, Asia Pacific and South Africa and 25 and older in Europe and North America. Respondents were required to own investable assets, such as stocks, bonds, mutual funds, etc. In addition, a minimum investable asset threshold was set for each country to ensure that the respondent had sufficient investments, providing a knowledge base from which to answer the survey questions. The survey was completed from January 2 to 15, 2014, in all countries.
About Franklin Templeton Investments
Franklin Templeton Investments Corp. is a wholly owned subsidiary of Franklin Resources, Inc. (NYSE: BEN), a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Franklin Mutual Series, Franklin Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2 investment teams. The San Mateo, CA-based company has more than 65 years of investment experience and over US$886.9 billion (C$980.4 billion) in assets under management as of March 31, 2014.
For more information, please visit franklintempleton.ca or connect with Franklin Templeton on Twitter @FTI_Global. Read the Beyond Bulls & Bears blog featuring perspectives from Franklin Templeton investment professionals around the world and the Investment Adventures in Emerging Markets blog from Mark Mobius (@MarkMobius), executive chairman of Templeton Emerging Markets Group.
This material does not constitute investment advice or an invitation to apply for securities. Investors should seek professional financial advice and obtain a full explanation of any proposed investment before making a decision to invest. Investments involve risks. The value of investments can go down as well as up, and investors may not get back the full amount invested. Not all products and services available in all jurisdictions.
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SOURCE: Franklin Templeton Investments Corp.
For further information:
Amie Lauder, Corporate Communications, Franklin Templeton Investments, firstname.lastname@example.org, 416.957.6560