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Investors are decidedly more optimistic about their first-quarter return prospects than advisors, according to a survey from Toronto-based Horizons ETFs Management (Canada) Inc.

Horizons’ latest quarterly survey of investor and advisor sentiment found that investors are generally bullish about the return prospects for Canadian and U.S. equities.

After the S&P/TSX 60 grew by 6.98% in Q4 2020, investors increased their bullishness on large caps by 19 percentage points to 56%, while advisors reduced their bullishness by 13 percentage points to 48%.

The S&P/TSX capped energy index, meanwhile, grew by an impressive 39.91% in Q4, prompting investors to increase their bullishness by 25 percentage points to 52%. Advisors, however, increased their bullishness by only 3%, remaining neutral overall on the energy sector.

Investors were 52% bullish on financials after the S&P/TSX capped financials index returned 15.4% last quarter, while advisors moved from a bearish to neutral stance.

“Despite more caution, advisors are still primarily bullish on the prospects of a Canadian recovery but might be taking the view that valuations have run a bit ahead of an actual recovery,” said Mark Noble, Horizons’ executive vice-president of ETF strategy, in a release.

After U.S. equities delivered strong returns in the fourth quarter, investors said they were 55% bullish on the S&P 500 and 59% bullish on the NASDAQ-100.

Advisors also felt good about return prospects for the S&P 500, increasing their bullishness to 69%. They were less convinced about the NASDAQ-100, however, decreasing their bullishness by 16 percentage points to 48%.

Noble noted that advisors’ about-face on the tech-dominated NASDAQ represented a “stark reversal” in sentiment.

“This may underpin a belief amongst advisors that the cyclical sectors that really struggled in 2020 might be poised to outperform the technology-heavy NASDAQ-100, as the world hopefully embarks on a global recovery from the Covid-19 pandemic,” Noble said.

Investors and advisors diverged once again when it came to crude oil futures and natural gas, with investors decidedly more bullish on both sectors.

The divergent motif continued when it came to commodities. Silver bullion returned 20.64% in Q4, but that didn’t sway advisors, who were only 31% bullish on silver, while investors were 57% bullish. After a strong run for gold in 2020 that petered out toward the end of the year, advisors were bearish on gold, while investors reported 57% bullishness.

Cannabis companies exploded in Q4, with the North American Marijuana Index growing by a staggering 50.29%. Investors and advisors increased their bullishness on the sector, with advisors moving from a bearish to neutral outlook on cannabis.

Noble noted that the new Biden administration in the U.S., coupled with a Democrat-controlled House and Senate, could potentially open the door to the legalization of cannabis at the federal level in the U.S., which would be a boon for the sector.

“A fully legalized U.S. market could dramatically increase the revenue growth potential for marijuana businesses located in North America,” Noble said.