After experiencing some abnormal end-of-year volatility, bullish sentiment has fallen and investors see opportunities in gold and silver

TORONTO – January 18, 2019 – After significant volatility in the fourth quarter of 2018, the results of the first quarter 2019 Advisor and Investor Sentiment Surveys (“Q1 Surveys”) from Horizons ETFs Management Canada Inc. (“Horizons ETFs”) suggest that Canadian advisor and investor bullishness has declined on nearly all asset classes heading into the new year.

There is also a growing sentiment gap between advisors and investors: investor outlook for the new quarter has dropped significantly compared to that of advisors.

Every quarter, Horizons ETFs surveys investment advisors and investors for their outlook on their expected returns for 14 distinct asset classes. These expectations are expressed in terms of bullish, bearish or neutral sentiment. The Q1 Survey covers the period beginning January 1, 2019 and ending March 31, 2019.

The Global Outlook

In the face of a near 10% drop in the S&P/TSX 60™ Index last quarter, 56% of advisors have maintained their bullish outlook on Canadian Equities going into 2019, quarter-over-quarter. Similarly, advisors’ expectations for U.S. Equities, as represented by the S&P 500 ®, remained extraordinarily high at 67%, despite a 13.97% drop in the S&P 500 last quarter.

However, investors seem to think things will get worse: bullish sentiment among investors fell by 15% or more for all three of the major North American indices, which includes the S&P/TSX 60, NASDAQ-100 ® and the S&P 500. Investors are now outright bearish on Canadian Equities and divided on U.S. Equities.

Advisors were also very bullish on Canadian stocks. Bullish sentiment among advisors on the S&P/TSX Capped Financials™ Index was 58%, a four percentage point increase over last quarter, despite the fact the sector lost more than 12% in Q4 2018. Again, investors took a more bearish tone, with only 40% of investors bullish on Canadian Financials, a 9% drop from last quarter.

Despite end-of-year volatility, advisors appear to still expect Canadian and U.S. Equities to generate positive returns over the next three months,” said Steve Hawkins, President and CEO of Horizons ETFs. “While advisors may be viewing the sell-off from last quarter as a buying opportunity, investors clearly think there is more pain to come.

Both advisors and investors were more bearish on Emerging Markets, as represented by the MSCI Emerging Markets Index, which includes 24 countries. Only 48% of advisors and 37% of investors were bullish on this asset class after a 7.8% index decline last quarter.

Emerging Markets actually fared better than most Developed Markets last quarter, but that has done nothing to alleviate both advisor and investor concern about these stocks,” said Mr. Hawkins. “While the USMCA trade deal has alleviated North American industry anxieties, the lingering trade war between the U.S. and China continues to generate pessimism and hesitation for the global marketplace.

Safety in Precious Metals

Gold, Silver and Gold Equities were three of the four asset classes surveyed that delivered positive returns last quarter (the other was the U.S. 7-10 Treasury Bond Index). In Q4 2018, Gold Bullion generated a 7.54% return and Silver Bullion generated a 5.42% return.

Only one-in-three advisors (35%) were bullish on Gold Bullion going into Q1 2019, while only 34% were bullish on Silver Bullion. This is in stark contrast to investors, where nearly two-out of three investors (60%) were bullish on Gold Bullion and 48% were bullish on Silver Bullion.

Gold Miners, as represented by the S&P/TSX Global Gold™ Index, generated a 20.84% gain in Q4 of 2018. In the Q1 Survey, only 36% of advisors were bearish on Gold stocks versus a 57% expression of bullishness among investors.

Historically, we’ve seen a huge gap in the preference of precious metal assets with advisors and investors – with investors having a stronger disposition towards precious metals and precious metals equities,” said Mr. Hawkins. “Since these are generally viewed as defensive assets, it makes sense that advisors – who are generally bullish – would favour stocks over Gold and Silver. In contrast, investors favour the precious metals over most of the major stock indices.

Cannabis Crush

With the first quarter of marijuana legalization having come and gone, advisors and investors are stopping to take stock of a sector previously buoyed by enthusiasm for the potential of the emerging industry that has fallen short with disappointing fundamentals.

Marijuana equities, as represented by the North American Marijuana Index, lost more than 40% after recreational legalization in Canada. In lockstep, both advisors and investors registered a steep loss of positive expectation for the sector. Bullish sentiment amongst advisors and investors fell by 15% or more. For Q1 2019, only 31% of advisors were bullish on Marijuana vs. 56% of investors.

“It’s clear that the post-legalization correction has resulted in a more reserved attitude toward Q1 2019 performance,” said Mr. Hawkins. “As more of these Cannabis-sector companies begin to demonstrate their fundamentals through financial reporting, there will be a solid footing for analysts upon which to base their expectations for the industry – ensuring a measured outlook on growth.”

No Pipeline to Energy Positivity

Another victim of advisor and investor sentiment was Energy, as represented by the S&P/TSX Capped Energy™ Index. With a deep performance erosion of 28.62% last quarter, the change in outlook represents a significant departure from the last survey when advisors commanded an overwhelming 67% bullishness. In the Q1 Survey, only 40% of investors were bullish on the sector, with 51% of advisors still optimistic.

Natural Gas, as well as Crude Oil One-Month Futures, also tumbled into the new year, with the latter hemorrhaging some bullishness into bearishness, amid a -38.01% rout in Q4 2018. Despite the severe drop, 50% of advisors and investors remain bullish on the commodity. Natural Gas saw a greater loss in confidence from investors, moving from a bull to bear, after losing only 2.26% in Q4 2018.

Much of growing pessimism among Canadian advisors and investors about the Energy sector can be traced to ongoing issues with stalled and challenged energy infrastructure projects across the country,” said Mr. Hawkins.

About the Q1 2019 Advisor and Investor Sentiment Survey
Horizons ETFs conducts the only quarterly sentiment survey of Canadian advisors and investors. Both results have been collectively branded under the title ‘Q1 2019 Advisor and Investor Sentiment Survey’. The survey quantitatively measure advisors’ and investors’ quarterly outlooks of key benchmarks covering equities, bonds, currencies and commodities. For full survey results, visit

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 has more than $9.5 billion of assets under management and 85 ETFs listed on major Canadian stock exchanges. Horizons ETFs Management (Canada) Inc. is a member of the Mirae Asset Global Investments Group.

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

For media inquiries:
Contact Jonathan McGuire
External Communications Manager
Horizons ETFs Management (Canada) Inc.
(416) 640-2956

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Commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by Horizons ETFs Management (Canada) Inc. (the "Horizons Exchange Traded Products"). 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.

The Horizons Exchange Traded Products include our BetaPro products (the “BetaPro Products”). The BetaPro Products are alternative mutual funds within the meaning of National Instrument 81-102 Investment Funds, and are permitted to use strategies generally prohibited by conventional mutual funds: the ability to invest more than 10% of their net asset value in securities of a single issuer, to employ leverage, and engage in short selling to a greater extent than is permitted in conventional mutual funds. While these strategies will only be used in accordance with the investment objectives and strategies of the BetaPro Products, during certain market conditions they may accelerate the risk that an investment in shares of a BetaPro Product decreases in value. The BetaPro Products consist of our Daily Bull and Daily Bear ETFs (“Leveraged and Inverse Leveraged ETFs”), Inverse ETFs (“Inverse ETFs”) and our BetaPro S&P 500 VIX Short-Term Futures™ ETF (the “VIX ETF”). Included in the Leveraged and Inverse Leveraged ETFs and the Inverse ETFs are the BetaPro Marijuana Companies 2x Daily Bull ETF (“HMJU”) and BetaPro Marijuana Companies Inverse ETF (“HMJI”), which track the North American MOC Marijuana Index (NTR) and North American MOC Marijuana Index (TR), respectively. The Leveraged and Inverse Leveraged ETFs and certain other BetaPro Products use leveraged investment techniques that can magnify gains and losses and may result in greater volatility of returns. These BetaPro Products are subject to leverage risk and may be subject to aggressive investment risk and price volatility risk, among other risks, which are described in their respective prospectuses. Each Leveraged and Inverse Leveraged ETF seeks a return, before fees and expenses, that is either up to, or equal to, either 200% or –200% of the performance of a specified underlying index, commodity futures index or benchmark (the “Target”) for a single day. Each Inverse ETF seeks a return that is –100% of the performance of its Target. Due to the compounding of daily returns a Leveraged and Inverse Leveraged ETF’s or Inverse ETF’s returns over periods other than one day will likely differ in amount and, particularly in the case of the Leveraged and Inverse Leveraged ETFs, possibly direction from the performance of their respective Target(s) for the same period. For certain Leveraged and Inverse Leveraged ETFs that seek up to 200% or up to or -200% leveraged exposure, the Manager anticipates, under normal market conditions, managing the leverage ratio as close to two times (200%) as practicable however, the Manager may, at its sole discretion, change the leverage ratio based on its assessment of the current market conditions and negotiations with the respective ETF’s counterparties at that time. Hedging costs charged to BetaPro Products reduce the value of the forward price payable to that ETF. Due to the high cost of borrowing the securities of marijuana companies in particular, the hedging costs charged to HMJI are expected to be material and are expected to materially reduce the returns of HMJI to unitholders and materially impair the ability of HMJI to meet its investment objectives. Currently, the manager expects the hedging costs to be charged to HMJI and borne by unitholders will be between 10.00% and 45.00% per annum of the aggregate notional exposure of HMJI’s forward documents. The hedging costs may increase above this range. The manager publishes on its website, the updated monthly fixed hedging cost for HMJI for the upcoming month as negotiated with the counterparty to the forward documents, based on the then current market conditions. The VIX ETF, which is a 1x ETF, as described in the prospectus, is a speculative investment tool that is not a conventional investment. The VIX ETF’s Target is highly volatile. As a result, the VIX ETF is not intended as a stand-alone long-term investment. Historically, the VIX ETF’s Target has tended to revert to a historical mean. As a result, the performance of the VIX ETF’s Target is expected to be negative over the longer term and neither the VIX ETF nor its target is expected to have positive long-term performance. Investors should monitor their holdings in BetaPro Products and their performance at least as frequently as daily to ensure such investment(s) remain consistent with their investment strategies.

Horizons Total Return Index ETFs (“Horizons TRI ETFs”) are generally index-tracking ETFs that use an innovative investment structure known as a Total Return Swap to deliver index returns in a low-cost and tax-efficient manner. Unlike a physical replication ETF that typically purchases the securities found in the relevant index in the same proportions as the index, most Horizons TRI ETFs use a synthetic structure that never buys the securities of an index directly. Instead, the ETF receives the total return of the index through entering into a Total Return Swap agreement with one or more counterparties, typically large financial institutions, which will provide the ETF with the total return of the index in exchange for the interest earned on the cash held by the ETF. Any distributions which are paid by the index constituents are reflected automatically in the net asset value (NAV) of the ETF. As a result, the Horizons TRI ETF receives the total return of the index (before fees), which is reflected in the ETF’s share price, and investors are not expected to receive any taxable distributions. Certain Horizons TRI ETFs use physical replication instead of a total return swap. The Horizons Cash Maximizer ETF and Horizons USD Cash Maximizer ETF do not track an index but rather a compounding rate of interest paid on a cash deposit that can change over time.

*The indicated rates of return are the historical annual compounded total returns including changes in per unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. The rates of return shown in the table are not intended to reflect future values of the ETF or returns on investment in the ETF. Only the returns for periods of one year or greater are annualized returns.