Investor sentiment has dropped to its lowest point since the financial crisis, according to a new report by Manulife.
Its Investor Sentiment Index reached 16, just five points higher than the 11 points registered during the financial crisis and significantly lower than the all-time high of 34 reached in 2006.
The index also found that 26% of Canadians feel they are in a worse financial position than they were two years ago.
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“Canadian investors are facing a long list of uncertainties, including tremendous volatility in both oil prices and the value of the Canadian dollar,” said Frances Donald, senior economist at Manulife Asset Management. “The outlook should become more clear over the course of 2016.
“What is most interesting from the survey is the ongoing decline in the Canadian appetite to invest in their own home.”
According to the index, Canadians increasingly view housing as a less attractive investment, dropping three points in the last year. The two largest drops were in B.C. (13 point decrease since November 2014) and Ontario (decreased six points in the same time period).
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In the last six months, Canadian investors lost confidence in mutual funds (down eight points), ETFs (down seven points), and balanced mutual funds (down seven points, the lowest it’s been since 2011). Fixed income stayed the same (+3 on the index).
The most optimistic investors in the country are in Ontario and the Atlantic provinces, ranking +20 on the index. Quebec ranked the lowest at +9 and Alberta ranked second lowest at +14, dropping five points since May 2015 and 11 points since November 2014.
The report also found that nearly half (48%) of Canadians believe interest rates will stay the same for the next 12 months, while 77% say interest rates will not have an impact on their investment strategy.
“The Bank of Canada has been suggesting that interest rates are on hold or may even fall further over the coming year,” said Donald. “Yet, interestingly, 40% of Canadian investors still expect interest rates to rise, highlighting the ongoing uncertainty around the interest rate outlook.”
Read: Don’t depend on interest rates to shore up economy: BoC