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SURVEY: Canadian Investors & Advisors Overwhelmingly Bearish On Q1 2022

Download Q1 2022 Sentiment Survey Results

Across most asset classes, previously bullish investors & advisors are now bearish heading into Q1 2022

TORONTO – January 12, 2022 – Heading into 2022, both Canadian investors and advisors have shifted overwhelmingly toward bearish sentiment across most market indices and asset classes, according to the first-quarter 2022 Advisor and Investor Sentiment Surveys (“Q1 Surveys”) from Horizons ETFs Management (Canada) Inc. (“Horizons ETFs”).

Every quarter, Horizons ETFs surveys Canadian investors and investment advisors for their outlook on expected returns for distinct asset classes. These expectations are expressed in terms of bullish, bearish or neutral sentiment. The Q1 Surveys cover the period beginning January 1, 2022, and ending March 31, 2022.

Thematic Asset Classes and Sectors: Bitcoin, Psychedelics and Marijuana

Despite a 6.67% return on the spot price of Bitcoin, bullish sentiment amongst advisors and investors on the world’s most popular cryptocurrency decreased substantially. Bullish sentiment amongst investors declined more than 14 percentage points so that only 38% of investor respondents remain bullish on the cryptocurrency. Advisors’ sentiment declined as well, with the number of advisors bullish on Bitcoin decreasing by 11 percentage points down to 42% bullishness.

After a promising start in 2021, marijuana companies, as represented by the North American Marijuana Index, continued their multi-quarter slide in performance with a -19.91% return in Q4 2021. Advisors and investors have responded in kind, ranking the marijuana sector as one of their most bearish sectors for Q1 2022. Investors gave pot stocks a 42% bearish rating – a 14 percentage point increase. Advisors followed suit, increasing by 19 percentage points to 44% bearishness overall.

Heading into 2022, advisors and investors are both bearish on the prospects of the emerging psychedelics industry following a -32.47% return in the previous quarter on the North American Psychedelics Index. Advisors, previously bullish on the psychedelics space, increased their bearish sentiment 19 percentage points to 44% bearishness. Investors increased their bearish sentiment on the sector by 6 percentage points to 34% bearishness.

“After a promising start for marijuana equities at the beginning of 2021, as well as emergence of the psychedelics industry as an investable sector, unfortunately, investors’ hopes for these sectors did not match performance results. This weighed on outlooks for the year ahead, particularly for Canada’s licensed producers, which continue to struggle to generate a profit in Canada’s heavily regulated and hyper-competitive retail cannabis market,” said Mark Noble, Executive Vice President, ETF Strategy, at Horizons ETFs. Many new investors invested in Bitcoin and related funds in 2021, so it will be interesting to see how volatility in this emerging asset class affects flows. Volatility marked the end of 2021 and with signs that it will likely continue into the new year, there may be growing concern about Bitcoin’s ability to function as a ‘digital gold’ to provide a non-correlated store of value during periods of equity market instability.

Canadian Equities and the Dollar

During Q4 2021, Canada’s major equities benchmark – the S&P/TSX 60™ Index – grew +6.95%. In particular, advisors do not anticipate the trend continuing into 2022, signaling their highest bearish rating across all asset classes measured by the Q1 Surveys at 49% bearishness – a 28 percentage point increase in bearish sentiment, quarter-over-quarter. Meanwhile, investors’ bullish sentiment decreased 11 percentage points for a score of just 39% bullishness.

Energy stocks, as represented by the S&P/TSX Capped Energy Index, registered a +13.26% return in Q4 2021 – the highest quarter-over-quarter return of the measured asset classes in Horizons ETFs’ Q1 Surveys. Both groups tempered their expectations with investors dropping 15 bullish percentage points to 40% bullishness, and advisors dropping a staggering 20 percentage points of bullish sentiment down to 44% bullishness.

Financials, as represented by the S&P/TSX Capped Financials Index, posted a strong return of +8.38% in the fourth quarter of 2021. Once again, investors and advisors both decreased their bullish sentiment on the performance potential of Canadian banks in the new year. Advisors’ bullish sentiment fell 8 percentage points to 45% bullishness, while investors’ bullish sentiment slid by 6 percentage points to 40% bullishness.

On the Canadian dollar vs. the U.S. dollar, both investors and advisors were skeptical about the loonie’s fortunes against the greenback, despite a 0.34% gain in Q4 2021. Moving from bullish to bearish, advisors increased their bearish sentiment by 12 percentage points to 41% bearishness while the previously neutral investors increased their bearish sentiment by 5 percentage points to 37% bearishness.

There has been a remarkable reversal of sentiment on the Canadian outlook heading into 2022,” said Mr. Noble. “With the arrival of the Omicron COVID-19 variant in Canada and subsequent lockdowns underway across the country, investors and advisors may be bracing for more economic pain through the quarter ahead.”

U.S. and International Equities

Q4 2021 saw robust growth in the United States’ major indices. The S&P 500® Index posted a +10.65% gain while the NASDAQ-100® Index grew +11.10% during this time.

Despite the gains, reception and outlook on American equities fell sharply, according to our Q1 Surveys.

Advisor sentiment on the S&P 500® darkened following an 11 percentage point decrease, to 41% bullishness, as compared to the previous quarterly survey. On the NASDAQ-100®, advisors registered a 13 percentage point decrease in sentiment to 39% bullishness.

Investor optimism about prospects south of the border waned as well. On the S&P 500®, investors’ bullishness fell to just 39%, an 11 percentage point decrease in bullish sentiment from last quarter. On the tech-heavy NASDAQ-100®, investors withdrew 12 percentage points of bullish sentiment, landing at 40% bullishness.

International equities, as represented by the MSCI Emerging Markets Index, were weak in Q4 2021 falling by -1.68%. In response to the weaker performance, both advisors and investors were somewhat cynical on these global markets with investors’ bullish sentiment decreasing by 6 percentage points to 34% bullishness, while advisors’ bullish sentiment decreased by 8 percentage points to 43% bullishness.

“U.S. markets performance, which defied the anticipated economic impacts of COVID-19 by marking multiple new record highs throughout 2021, showed some cracks amid end of year volatility,” said Mr. Noble. “Despite outperformance compared to the broader global marketplace, it appears advisors in particular might be looking to reduce their exposure south of the border in anticipation of a greater reckoning ahead.”


After multiple quarters of strong performance within the crude oil market, the positive momentum of crude oil futures slowed in Q4 2021 posting a gain of just +0.24%. As one of their highest bullish conviction asset classes last quarter at 69% bullishness, heading into Q1 2022 advisors have decreased their bullish sentiment by 29 percentage points to 40% bullishness.

Investors also highlighted their doubts in continued demand for crude oil by decreasing their bullish sentiment by 15 percentage points to 39% bullishness.

Among the asset classes and indices measured by our Q1 Surveys, natural gas futures saw the greatest decline in performance with a -36.42% return in Q4 2021. Advisors and investors both saw a likely cooling for the commodity’s fortunes heading into 2022 with investors reducing their outlook to 41% bullishness, a 21 percentage point drop in bullish sentiment compared to last quarter. Advisors, who ranked natural gas futures as one of their highest conviction asset classes last quarter at 69% bullishness, are now seemingly cold on the commodity decreasing their bullish sentiment by 21 percentage points to 38% bullishness.

2021 was a wild ride for commodities markets. With oil and natural gas posting multi-year highs despite the ongoing COVID-19 pandemic, commodities proved to be an effective hedge against growing global inflation concerns.” said Mr. Noble. “The one macroeconomic factor that seems to be working in favour of commodities is scarcity. Both limited supply and supply chain issues seem to be driving the price of available commodities up regardless of economic growth.  This provides a favorable economic backdrop for both the commodity, and particularly the energy markets, going into 2022.”

Defensive Asset Classes: Gold, Silver and Fixed Income

Amid the year-end volatility that brought 2021 to a close, precious metals proved a stable store of value in Q4 2021, with both gold bullion gaining +4.11% and silver bullion rising +5.13% in the quarter.

Investors registered a 3 percentage point drop in bullish sentiment to 40% bullishness on gold bullion. Advisors were also more bearish on the precious metal after decreasing their bullish sentiment by 15 percentage points to just 37% bullishness.

Similarly, on silver bullion investors registered a 6 percentage point drop in bullish sentiment to 37% bullishness, while advisors again moved from bullish last quarter to bearish, reducing their bullish sentiment by 13 percentage points to just 35% bullishness.

On the S&P/TSX Global Gold Index, Q4 2021 saw double digit performance from gold miners with a +10.72% return overall. Investors dropped 9 percentage points of bullish sentiment to just 36% bullishness while advisors were decisively more cynical this quarter decreasing their bullish sentiment by 8 percentage points to 40% bullishness.

Low interest rates continue to underwhelm fixed income markets. U.S. Treasuries, as represented by the Solactive 7-10 Year Treasury Bond Index, posted a tepid 0.45% return in Q4 2021. Investors are now more pessimistic after adding 3 percentage points of bearish sentiment for a score of 38% bearishness. Advisors, previously bullish on fixed income, have awarded U.S. Treasuries their most bearish weighting at 48% bearishness overall, a 15 percentage point increase in bearish sentiment, quarter-over-quarter.

The acknowledgement that the stimulus-driven inflation wasn’t necessarily transitory by Fed Chairman Jerome Powell highlighted what many have suspected for some time. This has impacted the overall returns for fixed income asset classes, as rising interest rates generally result in losses for most fixed income categories,” said Mr. Noble. “It is interesting to note that bullish sentiment on precious metals actually decreased despite the same inflationary concerns and strong returns last quarter from gold mining stocks.  The advent of cryptocurrencies might be taking some of the luster of gold as an alternative asset class during periods of monetary uncertainty.”

About Horizons ETFs Management (Canada) Inc. (
Horizons ETFs Management (Canada) Inc. is an innovative financial services company and offers one of the largest suites of exchange traded funds in Canada. The Horizons ETFs product family includes a broadly diversified range of solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. Horizons ETFs currently has more than $20 billion of assets under management and 104 ETFs listed on major Canadian stock exchanges.

For investor inquiries:
Contact Horizons ETFs at 1-866-641-5739 (toll-free) or (416) 933-5745

For media inquiries:
Contact Jonathan McGuire
Assistant Vice President, Corporate Communications
Horizons ETFs Management (Canada) Inc.
(416) 640-2956

Commissions, management fees and expenses all may be associated with an investment in exchange traded products (the “Horizons Exchange Traded Products”) managed by Horizons ETFs Management (Canada) Inc. The Horizons Exchange Traded Products are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the Horizons Exchange Traded Products. Please read the relevant prospectus before investing.

Certain statements may constitute a forward-looking statement, including those identified by the expression “expect” and similar expressions (including grammatical variations thereof). The forward-looking statements are not historical facts but reflect the author’s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These and other factors should be considered carefully and readers should not place undue reliance on such forward looking statements. These forward-looking statements are made as of the date hereof and the authors do not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law.

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