Boston, April 1, 2015 /PRNewswire/ — Investor sentiment has reached its highest level since the inception of the John Hancock Investor Sentiment Survey five years ago, rising to +28 in the first quarter of 2015 from a score of +22 in the first quarter of 2011. Compared with one year ago – the first quarter of 2014 – when the Index score was +23, sentiment has improved greatly, with investors indicating they are broadly optimistic on their prospects for 2015.
The John Hancock Investor Sentiment Index® reflects the percentage of investors who say they believe it is a “good” or “very good” time to invest, minus those who feel the opposite. The first quarter survey was conducted in mid-February of 2015.
“More so than last year, there is a belief that 2015 will be a good year for the average investor, with 81 percent saying so versus 73 percent in the first quarter of 2014. Three-quarters of those surveyed also said they are optimistic that the U.S. economy will be stronger two years from now,” said Megan E. Greene, Chief Economist, John Hancock Asset Management. “Fewer are bullish on the energy sector, with most thinking healthcare and technology companies will lead the way in the market this year. Investors are more positive about real estate and home ownership, spending on travel and consumer goods, and are more likely to believe now is a good time to switch jobs or start a new business.”
“China remains the country that investors believe will have the fastest-growing economy, though fewer investors think so compared with 2013 when this question was last asked in our survey. This is in line with our own forecasts of a Chinese slowdown over the next few years,” Greene added. “Surprisingly, a greater share of investors (22 percent) chose the U.S. as the country they expect will have the fastest growth, compared with eight percent who thought so in 2013.”
Investors are positive on investing in stocks, with 62 percent saying now is a good or very good time to invest in stocks, and they hold similar views on stock mutual funds (59 percent) and balanced mutual funds (61 percent). Compared with last year, a significantly larger share is optimistic about investing in exchange-traded funds (ETFs), with 41 percent positive on them versus 35 percent in Q1 2014.
Retirement investing is a strong priority, investors indicate. Eighty percent believe now is a good time to contribute to their 401(k) plans and IRAs. Forty five percent are positive on investing in Target Risk and Target Date funds.
Investors appear to be sanguine about the outlook on inflation. One in five think the rate of inflation will be one percent or lower two years from now; only two percent of investors thought so in the first quarter of 2014. Only five percent think the rate of inflation will be four percent or higher in two years.
The future is not without concerns, however. The share of investors greatly concerned about unrest in the Middle East (48 percent) has nearly doubled compared with one year ago when 25 percent were greatly concerned. Investors still worry about political gridlock in the U.S. and about rising healthcare costs.
About the John Hancock Investor Sentiment Survey
John Hancock’s Investor Sentiment Survey is a quarterly poll of affluent investors. The survey measures investors’ feelings about the current economic climate and their evaluations of what represents a good or bad investment given the current environment. The poll also asks consumers about their confidence in reaching key financial goals and their attitudes toward specific financial products and services. This online survey was conducted by independent research firm Greenwald & Associates. A total of 1,049 investors were surveyed from February 9th to February 20th, 2015. To qualify, respondents were required to participate at least to some extent in their household’s financial decision-making process, have a household income of at least $75,000, and assets of $100,000 or more. The data were weighted by age and education to reflect the population of Americans matching the survey’s qualification requirements. In a similarly-sized random sample survey, the margin of error would be plus or minus 3.1 percentage points at the 95 percent confidence level. Due to rounding and missing categories, numbers presented may not always total to 100 percent.
About John Hancock Financial and Manulife
John Hancock Financial is a division of Manulife, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Operating as Manulife in Canada and Asia, and primarily as John Hancock in the United States, our group of companies offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Assets under management by Manulife and its subsidiaries were C$691 billion (US$596 billion) as at December 31, 2014. Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife can be found on the Internet at manulife.com.
The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers and administers a broad range of financial products, including life insurance, annuities, investments, 401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at johnhancock.com.