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Canadian investors relying heavily on domestic markets to fund retirement: CIBC Poll

Poll reveals most Canadians do not plan to focus on global equities to grow their retirement savings

TORONTO, Feb. 19, 2014 /CNW/ - A new poll from CIBC Asset Management (CAM) by Leger finds that only 32 per cent of Canadians who hold stocks in their retirement portfolios plan to invest in markets outside of Canada. The poll results also show that nearly half of investors surveyed (44 per cent) say their main objective is long-term growth, which underscores the need to diversify their portfolios.

Key poll findings include:

  • 68 per cent of Canadians plan to invest mainly in Canada;
  • 59 per cent of Canadians plan to invest primarily in GICs (or other guaranteed investments), savings accounts, bonds or bond funds; while just 35 percent plan to invest mainly in stocks, or equity funds; and
  • Nearly half (48 per cent) of Canadians between the ages of 18-34 plan to invest in global equities or mutual funds, with that number declining sharply to 30 per cent for those between the ages of 35-44, a demographic that is typically in their primary wealth-building years.

"While the Canadian market is a solid base for investing, diversification is an important consideration for long-term investors" says Luc de la Durantaye, Managing Director, Asset Allocation and Currency Management, at CIBC Asset Management.

"There are 40,000 stocks that trade on global markets, versus less than a tenth of that on Canadian markets. Global stocks include world leaders in health care, technology and manufacturing. Diversifying a portfolio across geographic regions and sectors offers many opportunities that are not available domestically."

"Foreign currency exposure is also an important aspect of portfolio diversification," he adds. "With a number of foreign currencies cheaper than the Canadian dollar at current levels, there's an opportunity of further gains for Canadian investors."

CIBC Asset Management recently issued its 2014 outlook, stating that flat commodity prices would likely see Canada's equity markets continue to underperform relative to certain international markets this year.

Strategies for investors to consider:

  • Work with an advisor to find the right portfolio mix: A financial advisor can help you build a portfolio for your specific needs and risk profile that offers the appropriate global exposure.

  • Consider balanced investment solutions with global exposure: A simple way to access global markets is through investment solutions that are diversified across geographic regions, sectors and asset classes. CIBC Asset Management offers a comprehensive line-up of diversified managed solutions and mutual funds.

Other key poll findings:

Where Canadians plan to mainly invest - percentage by geographic region, by age:

  Canadian Equities, Funds Global Equities, Funds
National Average 68% 32%
18-24 52% 48%
25-34 52% 48%
35-44 70% 30%
45-54 73% 27%
55-64 72% 28%
65 and over 73% 27%

The poll was conducted by Leger through a Web survey in December 2013 among a representative sample of 1,503 English- or French-speaking Canadians, 18 years of age or older, who have an investment portfolio for retirement. Using data from Statistics Canada, the results were weighted according to gender, age, region, language spoken at home, education and whether or not children are present in the household to ensure a sample representative of the entire population under review.

About CIBC Asset Management

CIBC Asset Management (CAM), the asset management subsidiary of CIBC, provides a range of high-quality investment management services and solutions to individual and institutional investors. CAM's offerings include: a comprehensive platform of mutual funds, strategic managed portfolio solutions, discretionary investment management services for high-net-worth individuals, and active portfolio management for institutional clients. CAM is one of Canada's largest asset management firms, with more than $90 billion in assets under management as of Dec. 31, 2013.

SOURCE Canadian Imperial Bank of Commerce

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