BAY STREET-Canada wealth managers see shift to equities in 2013

Sun Feb 10, 2013 10:29am EST
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* Asset managers waiting for increased risk appetite

* They see gains in U.S., global equities; Canada weaker

* Solution-based marketing takes investor focus off stocks

By Andrea Hopkins

TORONTO, Feb 10 (Reuters) - Buoyed by rising global stock markets, Canadian asset managers are increasingly certain that 2013 will be the year that investors who were burned by the financial crisis make a return to equity-linked products.

As mutual fund developers try to read investor sentiment in Canada's traditionally heavy first-quarter sales period, money continues to flow into funds marketed with the reassuring "income" or "yield" tags that are favored by investors who lost money in the 2008-09 stock market meltdown.

"We haven't seen a shift yet - it's very much balanced products and fund-to-fund solutions that are still selling in excess of 85 percent of what we've seen," said Neil Macdonald, managing director of Scotia Asset Management, a unit of Bank of Nova Scotia.

"At some point there is going to be a massive shift to equities again, and you just want to make sure that you're ready for that."

According to research firm Investor Economics, 47.2 percent of mutual fund assets at the end of 2012 were in fixed income or balanced funds and 3.6 percent were in money market funds. Just 48.5 percent were in equity funds, far short of the 60-40 equity-bond split considered standard before the financial crisis.   Continued...