Canadian investment managers are enthusiastically bullish about the Canadian equity markets, despite the inability of stocks and exchange traded funds (ETFs) to sustain a strong rally.

CNW Group reports that 60% of managers are actually bullish toward Canadian stocks, and about 75% of them expect gains in the Canadian energy sector. The stability of the U.S. housing market is the indicator that managers are using as a clue that financial markets are recovering.

Overall, Canadian managers are speculating on energy, materials and the financial sector as the sectors with the most potential. Canadian markets had the worst-performing asset class at the end of 2008 besides emerging markets, so the renewed faith in over 60% of managers is fulfilling.

But is it really so? Not everyone is so certain: one forecaster offered a grim employment outlook for this year, saying the economy “fell off a cliff” in the first quarter, reports The Canadian Press. The forecaster predicted that unemployment would peak at 9.5% by the middle of 2010.

With all this conflicting data and opinions, what’s your best bet? Mind the trend lines and leave your emotions out of it.

• iShares MSCI Canada Index (EWC): down 2.1% year-to-date; up 21.7% for one month

Tags: Canada, EWC, Global ETFs