Investment advisors are confident that equity and commodity markets will rebound, but are cautious about investing in financials, U.S. equities and emerging markets, a recent survey by BetaPro Management Inc. has revealed.

BetaPro’s Q1 2009 Advisor Sentiment Survey, which polled 400 Canadian investment advisors, found that advisor confidence in gold and oil remains positive for the first quarter of 2009.

Advisors have been consistently bullish on gold bullion for the last eight consecutive quarters, and according to the most recent survey, two-thirds of the advisors maintain this positive outlook.

The sentiment on crude oil has seen a significant bullish shift, up 15% since the fourth quarter of 2008. This confidence was reflected by more than 66% of those polled, managing more than $20 billion in assets and representing a significant cross-section of the industry.

Even within the current commodity markets’ volatile conditions, 69% of advisors have a bullish outlook on global gold companies.

“The positive outlook on commodities and global gold and mining equities is consistent with the strong performance of the S&P/TSX Global Gold Index, up 15.65% in the fourth quarter 2008, and only a slight decline in the gold bullion,” said Howard Atkinson, president of BetaPro. “This sentiment indicates that advisors are confident that the equity and commodity markets will rebound.”

Meanwhile, advisors are significantly less bullish on financials, U.S. and emerging markets, and the expected commodity market rebound is making bonds a less attractive investment.

The survey found unusually high bearish sentiment on the U.S. 30-year bond. Half of the advisors polled are bearish on bonds, demonstrating that they expect long-term interest rates to rise, according to Atkinson.

Advisor caution over the current U.S. market uncertainty and recession was reflected in the bullish view on the Canadian dollar versus the U.S. dollar. Two-thirds of advisors surveyed expect the Canadian dollar to appreciate vis-à-vis the U.S. dollar during the first quarter.

IE