Emerging markets equities regain favour: Russell Canadian Investment Manager Outlook
TORONTO-- After the rally in Canadian stocks this summer, Canadian investment managers are less bullish about domestic securities and are finding other global markets increasingly attractive, according to the latest Russell Canadian Investment Manager Outlook from global asset manager Russell Investments. In line with that view, the vast majority of those surveyed between September 4 and 14 now feel Canada's stock market is fairly valued.
According to the third-quarter Investment Manager Outlook, Canadian investment managers surveyed are most bullish on the outlook for Emerging Markets equities, with 62% holding a favourable outlook on that asset class, compared to only 40% in the previous quarter. Meanwhile, the European Central Bank's (ECB) purchase of sovereign bonds in order to stave off a financial crisis in Europe has improved sentiment towards that region, with 38% of investment managers now bullish on EAFE equities, compared to only 25% in the previous quarter. Bearishness on the region has fallen sharply, to 15% of managers compared to 40% who had an unfavorable outlook on EAFE equities in the previous quarter.
"ECB policy action has reduced the number of bears on Europe," said Greg Nott, Chief Investment Officer, Russell Investments Canada Limited, adding that while most managers no longer had a negative outlook on the region, they were still somewhat wary. "The risk of the Euro zone falling apart has been substantially reduced," he said. "But is it clear sailing from now on? Certainly not."
Prior to the end of each quarter, Russell surveys a sample of senior-level Canadian investment decision-makers to collect their top-line opinions about the direction of the markets, sectors/styles to watch, and trends on the horizon that could impact investment strategy. The result of this survey is the Russell Investment Manager Outlook. The full version along with additional information about it is available at www.russell.com/ca.