Survey finds advisors favour equities, trusts

(December 11, 2003) They have dominated the Toronto IPO market for the past two years. The mainstream media has warned they are a bubble waiting to burst. But income trusts are still one of the most popular investment vehicles for this RRSP season.

A survey conducted for The ADVISOR Group has found income trusts are the second most popular investment recommendation among advisors, with 35% of respondents suggesting them to their clients.

Support for income trusts varied widely across the country, with only 19% of Atlantic respondents backing them. Faith in trusts grows steadily across the country, though, with 52% of advisors in British Columbia and the Yukon recommending them.

Income trusts became popular over the past few years, as investors seeking any kind of return flocked to the traditionally “boring” businesses the trusts operated. But many financial experts struggled to define the behaviour of the trust as a structure.

The most popular advisor recommendation remains equities and equity-based mutual funds, with 93% of respondents advocating the stock market. There is little variation across the country in backing equity-based investments, with Ontario marking the low point at 90% support.

Bond funds were recommended by 34% of respondents nation wide, while 24% recommended their clients hold bonds themselves. Real return bonds and labour-sponsored funds were recommended by 20% of respondents, while hedge funds were suggested by 14%.

The ADVISOR Group’s survey was conducted online and garnered a response from 333 financial professionals, including investment advisors, brokers, financial planners and insurance specialists.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com