Advisors bullish on commodities after strong quarter

After soaring returns in the first quarter, advisors are bullish on oil and gas, a new advisor sentiment survey suggests.

Advisor sentiment toward natural gas skyrocketed after futures returned more than 51% in the first three months of the year, according to a survey from Horizons ETFs Management (Canada) Inc. Advisor sentiment on the commodity was up by 13 percentage points from the previous quarter to 51% bullishness.

The 278 advisors surveyed were also increasingly bullish on oil after prices rose last quarter amid global supply shortages. Advisors added six percentage points of bullish sentiment from the last quarter for a score of 46%, Horizons said.

The trend spread across other commodities such as lithium, uranium and hydrogen, and to the S&P/TSX 60 index overall, where advisors’ bullish sentiment rose eight percentage points to 48%.

However, advisors withdrew one percentage point of bullish sentiment on the S&P/TSX Capped Energy index, landing at 43%, Horizons said.

Advisors also felt good about the Canadian dollar, adding 14 percentage points to 47% bullish.

“Commodities and financial services historically do well during an inflationary environment,” said Mark Noble, executive vice-president of ETF strategy at Horizons ETFs, in the press release, and that has benefited Canadian markets.

When it came to financials, advisors withdrew a single percentage point of bullish sentiment to 44%.

Advisors were most bearish when it came to U.S. equities and Treasuries (7-10 year in particular), and marijuana stocks.

Horizons surveyed 278 advisors and 380 investors.

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