Manulife regular quarterly Investor Sentiment Index: National Gallup poll suggests Canadians considered cash, real estate as safer havens after Sept. 11 US attacks

WATERLOO, ON, October 10, 2001 – A regularly scheduled quarterly
Gallup poll taken between Sept. 17 and 24 suggests the Sept. 11 terrorist attacks in the
United States contributed to a downturn in investor confidence across Canada. The attacks
triggered the sharpest decline in more than two years among investment categories gauged
by a quarterly Gallup poll commissioned by Manulife Financial, a leading provider of
insurance and investment services.

“Markets have shown considerable stability in recent
weeks, but in the days right after the attacks, investors were clearly reacting with
emotion and looking for capital security,” said Bruce Gordon, Manulife’s Executive
Vice President of Canadian Operations. “Earlier this year, the index reflected
strength in mutual funds, equities and housing sectors. But the latest poll suggests cash,
real estate and those investments offering capital security were seen by many as safer
havens immediately in the wake of the attacks in New York and Washington.”

Mr. Gordon said the poll likely captured the most extreme
reaction to markets in days right after the attacks, particularly given the closure of
stock markets in both Toronto and New York. Market activity in the past several weeks,
however, would suggest many investors remain confident in the market and will support
longer-term market growth, he suggested. “This is an important time for investors to
be working closely with experienced advisors, who take time to assess their needs and
assist them in planning for their long-term futures, including a review of their
guaranteed versus variable products.”

Investor sentiment index reaches three-year low

The fall 2001 Manulife Investor Sentiment Index, based on a
mid-September survey of 1,005 Canadians by The Gallup Organization, fell to a new low of
+16, down from +29 in June. The quarterly index monitors how Canadians say they feel about
10 different investment categories and vehicles. The index for each individual category or
vehicle reflects the percentage of those surveyed who say they believe it is a good or
very good time to invest, minus the percentage who say it is a bad or very bad time to invest.

“Since the Sept. 11 attacks, everyone has gone through
some strong emotional periods,” said Mr. Gordon. “We’ve seen rebounds in the
Manulife index before, particularly late last year amid some market turmoil, and we would
hope overall confidence in markets will continue to grow as these events unfold.”

Cash, real estate, capital security show most resilience

Among six investment categories, investing in their own
homes (including mortgages) remained just slightly below a previous two-year high, while
holding cash reached its highest point since Manulife’s first such index in early 1999.
Cash also was the only area to increase in strength during the past quarter.

For the first time since early 1999, investing directly in
stocks fell into negative territory – where more Canadians considered stocks a bad
investment than those who favoured equities — while segregated funds, RRSPs and RESPs
showed relative resilience.

Highlights

The following six investment categories comprise the Manulife Investor Sentiment Index:

  • Investing in their own homes (either renovations or
    mortgages) remains the most popular investment for Canadians. Traditionally the favourite
    of six investment categories, investing in their own homes eased five points to an index
    of +57 in September. The index reflects 70 per cent of those surveyed who said now is a
    good or very good time to invest in their homes, including paying down their mortgage,
    minus the 13 per cent who believe it’s a bad or very bad time.

  • Real estate other than their own homes was ranked in second
    place among the most popular investments, falling 13 points to +20.

  • Fixed income investments (including GICs, annuities) were
    tied in second place at +20 points, also down 13 points from June.

  • Cash (including savings accounts) reached its highest point
    yet since the index was launched. Its index climbed 10 points to +14 in September.

  • Balanced funds fell sharply by 28 points to +2. While
    investors viewed them favourably earlier this year, about one third viewed them as bad
    investments in mid-September. Only 36 per cent considered them a good investment, while a
    quarter or those surveyed were undecided.

  • Concerns about stock markets drove the index for equity
    holdings down sharply. Investing in shares was rated at -18, its lowest point in two years
    and off sharply from a high of +40 in June, 2000. The latest survey found almost half (47
    per cent) said it’s a bad time to invest in stocks, either directly or via mutual funds,
    while 29.6 per cent surveyed said they saw equities as a good choice. Some 20 per cent
    felt it was neither a good or bad time to buy stocks.

Investment Vehicles

As well as evaluating the six investment categories above,
the same question was asked of four investment vehicles.

  • Registered Retirement Savings Plans remained the most
    popular investment vehicle in the survey at +43 points, off 15 points from June. The index
    reflects 61 per cent of respondents who feel it’s a good or very good time to put money
    into RRSPs, while 18 per cent said it was a bad time.

  • Interest in Registered Education Savings Plans eased to +40
    points in September, down 13 points from June.

  • The index for segregated funds was off 14 points to +21,
    showing relative strength compared to the perception of mutual funds.

  • Mutual funds registered the biggest hit among investment
    vehicles, falling 33 points to +2 in mid-September. Thirty-five per cent of Canadians
    surveyed thought mutual funds were unattractive following the September terrorism attacks,
    while 37 per cent said it remained a good or very good time to place their money in funds.

The survey asked Canadians about their views toward
investing in a range of investments and investment vehicles. Gallup polled 1,005 Canadians
aged 18 and older between September 17 and September 24, 2001. The results have a margin
of error of +/- three per cent, 19 times out of 20.

About Manulife Financial

Manulife Financial is a leading Canadian-based financial
services company operating in 15 countries and territories worldwide. Through its
extensive network of employees, agents and distribution partners, Manulife Financial
offers clients a diverse range of financial protection products and wealth management
services. Funds under management by Manulife Financial (Manulife Financial Corporation and
its affiliated companies) were Cdn$140.9 billion as at June 30, 2001.

Manulife Financial Corporation trades as ‘MFC’ on the TSE,
NYSE and PSE, and under ‘0945’ on the SEHK. Manulife Financial can be found on the
Internet at www.manulife.com.

For further information: Media contact: Tom Nunn, Manulife Financial,
(519) 747-7000, ext. 8578; fax: (519) 747-6336; tom_nunn@manulife.com