WATERLOO, ON, Jan. 10 – Canadians were showing signs of
renewed confidence in mutual funds and equities toward the end of 2001, after turning to
traditionally safe havens in the wake of the Sept. 11 terrorist attacks in the United
States, suggests a national poll conducted for Manulife Financial, one of Canada’s leading insurance companies.
The latest regular quarterly poll for Manulife conducted in December suggests many Canadians
felt more confident in equity markets than just three months earlier.
“Canadians generally were looking for capital security
during the weeks immediately after the terrorist attacks, but now we’re seeing signs of
more confidence in equity markets and mutual funds,” said Bruce Gordon, Manulife’s
Executive Vice President of Canadian Operations. “The positive perception of mutual
funds and equities that was clear in the index earlier in 2001 seems to be on its way back.”
Mr. Gordon said the latest quarterly poll, first launched
by Manulife three years ago, likely reflects growing confidence in the market as world
events progressed. “Manulife offers a range of financial services to more than 3.5
million Canadians,” said Mr. Gordon. “This index helps us to better understand
how Canadians in general can be affected by changes in the overall economy and how we
might best adapt to those changes.”
Balanced funds, stocks show strong rebound
The overall winter 2001 Manulife Investor Sentiment Index,
based on a mid-December survey of 1,001 Canadians by Thompson Lightstone & Company,
decreased slightly to a new low of +11, down from +16 in mid-September. That result partly
reflects a shift from traditionally safer havens of real estate, fixed income and cash.
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.
“This is an important time for investors to work
closely with their advisors, who can take the time to assess their needs and help them
plan for long-term futures, including a review of their guaranteed versus variable
products,” Mr. Gordon said.
Double-digit increases for balanced funds, equities
Among six investment categories, equities and balanced
funds showed double-digit increases in their indices, while those polled also showed
relative confidence in segregated funds, RRSPs and RESPs. Fixed income and real estate
investments, including their own homes (mortgages and renovations) declined in the latest
poll to their lowest levels in three years. Cash — the only area to increase in strength
during the previous poll in September — fell sharply in the most recent poll.
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 16 points to +41 in
December. The index reflects 58 per cent of those surveyed who said it’s a good or very
good time to invest in their homes, minus the 17 per cent who believe it’s a bad or very bad time.
Real estate other than their own homes was the next most
popular investment, climbing seven points to +27, partly reflecting the competitive market
for mortgage interest rates.
Balanced funds climbed 16 points to +18. Almost half (44 per
cent) viewed balanced funds as a good or very good place to invest in December, compared
to 26 per cent who felt the opposite.
Fixed income investments (including GICs, annuities) dropped
19 points to +1 in December, down sharply from +33 in mid-2001, likely reflecting current
low interest rates plus increased confidence in equities and mutual funds.
Concerns about stock markets after the Sept. 11 attacks
drove the index for equity holdings into negative territory for the first time in
September, but it rebounded 14 points to -4 in December. The latest survey found more than
a third (36 per cent) considered it a good time to invest in stocks, either directly or
via mutual funds, while 40 per cent said they still saw equities as a bad choice. Some 15
per cent felt it was neither a good or bad time to buy stocks.
Cash (including savings accounts) reached its lowest point
yet since the index was launched, falling 30 points to -16 in December.
As well as evaluating the six investment categories above, the same question was
asked of four investment vehicles.
Registered Retirement Savings Plans, traditionally the most
popular investment vehicle in all previous surveys, was tied for first this time at +47
points, up four points from September. The index reflects 63 per cent of respondents who
feel it’s a good or very good time to put money into RRSPs, while 16 per cent said it was a bad time.
Interest also rose slightly in Registered Education Savings
Plans, which rivalled RRSPs in popularity for the first time in three years as more
Canadians became aware of federal changes to RESP contributions and withdrawals. The index
for RESPs reached +47 points in December, up seven points from three months earlier.
Mutual funds registered the biggest rebound among investment
vehicles, climbing back 16 points to +18 in mid-December. Forty-two per cent of Canadians
surveyed thought mutual funds were attractive, while 24 per cent said it remained a bad or
very bad time to place their money in funds.
The index for segregated funds registered a marginal decline
of two points to +19, leaving segregated funds as positive as mutual funds among those surveyed.
The poll by Thompson Lightstone was conducted with 1,001
Canadians aged 18 and older between December 6 and December 12, 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$134.6 billion as at September 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.