Higher inflation is coming: Poll

Investors are bullish on equities, despite concerns including growing inflation, finds a survey of Portfolio Management Association of Canada (PMAC).

In fact, CEOs of Canadian investment companies believe inflation will rise in the next 10 years to 2.8%, or almost 1% higher than the actual rate for the last decade. That would offset bond returns, which averaged 6.2% over the last decade, but will only earn 2.9% over the next, respondents say.

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Meanwhile, global equities they predict will earn 7.8%, up from 3.6%, and emerging marketing equities will return 9.1%. This is on par with the 11.9% actual return of the previous 10 years based on the MSCI Emerging Markets Index $CAD.

PMAC respondents still believe in the value of Canadian equities, saying they will provide a steady 7.4% return, down slightly from the 9.8% recorded for the previous decade.

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“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,” says PMAC president Katie Walmsley.

Staff

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