Findings Released Today at Portfolio Management Association of Canada's (PMAC) 2012 AGM Also Include Reaffirmation of Long-Term Value of Equities by Canada's Top Professional Investors
TORONTO, Nov. 22, 2012 /CNW/ - A recent select survey of Portfolio Management Association of Canada (PMAC) members finds that professional investors have bedrock confidence in the financial future of equities despite present and foreseeable uncertainties, including growing inflation.
The qualitative consensus assessment of influential financial decision-makers will be released at PMAC's 2012 Annual Conference and AGM in Toronto today. It finds that responding CEOs of Canada's leading investment companies believe inflation will rise slightly, but meaningfully in the next 10 years to 2.8 per cent, or almost one per cent higher than the actual rate for the previous 10 years (1.9 per cent).That would offset bond returns which averaged 6.2 per cent (DEX Universe Bond Index) over the last decade, but which will only earn 2.9 per cent over the next 10 years, the respondents say.
These trends can be addressed in the coming decade through a diversified portfolio of equities. Specifically global equities, which they project will earn 7.8 per cent - up from 3.6 per cent based on the MSCI World Index $CAD (Gross) - and emerging marketing equities, which they believe will return 9.1 per cent. This is on par with the 11.9 per cent actual return of the previous 10 years based on the MSCI Emerging Markets Index $CAD. PMAC respondents continue to believe in the value of Canadian equities, saying they will provide a steady 7.4 per cent return over 10 years, down slightly from the 9.8 per cent recorded by the S&P TSX Composite Index for the previous decade.
"The opinions expressed in this select audit of Canada's best and brightest professional investors represent a courageous vote of confidence in the future of equity investing," observes PMAC President Katie Walmsley. "All investors should draw on these directional insights in making their asset allocation choices and consider the impact of higher inflation on their portfolios when making investment decisions."
The qualitative audit of PMAC members represents the views of up to 24 CEOs of leading Canadian investment companies servicing institutional and high net worth clients. It is based on one open-end and five closed-end questions seeking informed projections of expectations for the financial performance of different asset classes and the rate of inflation. The qualitative assessment was conducted in the days leading up to the 2012 PMAC Annual Conference and AGM being held at the Westin Harbour Castle in Toronto today.
The PMAC Annual Conference and AGM - New Thinking for New Markets - features top-tier thought and opinion leaders from the fields of finance, investing, economics, marketing and a keynote address from academic, author and former federal leader of the Official Opposition, Michael Ignatieff.
Formerly the Investment Counsel Association of Canada (ICAC), the Portfolio Management Association of Canada (PMAC) represents more than 160 portfolio management companies that oversee more than $750 billion in assets for over one million institutional and high net worth clients. Member firms support private clients, pensions, insurance, foundations and endowments. As one of Canada`s largest financial industry associations, PMAC continues the 50-year tradition of ICAC and operates in both official languages. PMAC's mission is to advocate the highest standards of unbiased portfolio management in the interest of investors.
PMAC uses a collaborative information-sharing business model and represents its members to securities regulators and government agencies. The Association increases awareness of investment counselling benefits, provides a forum for networking, and keeps members current on regulatory and compliance issues.
SOURCE: Portfolio Management Association of Canada
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