WATERLOO, ON, Jan. 16, 2003 – Canadians are feeling far more confident this winter investing in balanced funds, registered retirement savings plans, stocks and their own homes than just three months ago, according to a national poll conducted for Manulife Financial, among Canada’s leading insurance and wealth management companies.
The 16th quarterly Manulife Investor Sentiment Index, conducted in mid-December, found Canadians more optimistic about investing in almost every area of the economy, rebounding from a low hit in late 2001 following terrorist attacks on the United States — and weak results last year amid collapses of several major U.S. corporations.
All but two of 10 categories and investment vehicles measured in the regular poll for the Manulife Investor Sentiment Index gained ground from three months ago, lifting the Index to +19 in December, up five points from September, 2002.
“Most Canadians are showing strong confidence in their long-term investment goals,” said Bruce Gordon, Manulife Financial Executive Vice President and General Manager of Canadian Operations. “Through four years of polling, we know that Canadians traditionally lean toward safer places to invest — that was particularly true following market reaction to the collapses of WorldCom and Enron last year.”
“However, the latest survey suggests investor sentiment is rebounding in several other areas, including interest in equities and balanced funds,” Mr. Gordon added.
The biggest upward swings in the past three months occurred for balanced funds (up 15 points), equities/stocks (up 10 points) and registered retirement savings plans (up eight points).
The overall Winter 2002 Manulife Investor Sentiment Index, based on a survey of 1,002 Canadians by Maritz: Thompson Lightstone, reached +19, up from +14 in September and a four-year low for the Index of +11 a year ago. The quarterly index monitors what Canadians say they feel about 10 different investment categories and vehicles. The index 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.
“Manulife offers a wide range of financial services and products to more than 3.5 million Canadians and the Index helps us gauge what Canadians are generally saying about where they favour investing in the economy,” Mr. Gordon said.
“Investors need to work closely with their advisors, who can help them assess their long-term goals and short-term needs — including a close review of their guaranteed versus variable products,” Mr. Gordon said.
A separate question about top financial priorities in 2003 found high interest in paying down credit card and other short-term debts as their top concern (23 per cent chose this as their top priority), particularly in the weeks leading up to Christmas. Among other high priorities were lowering their mortgage balance (cited by 14 per cent), saving for their next big-ticket purchase (14 per cent) and contributing to an RRSP (13 per cent).
Balanced funds, stocks, real estate gain ground
Among six investment categories in the quarterly survey, indices rose for investing in balanced funds, stocks, their own home, investment properties, and fixed income investments. Only cash lost favour among those polled in December.
The Manulife Investor Sentiment Index is determined by the following six investment categories:
- Investing in their own homes (either through renovations or paying down the mortgage) remains the most popular investment for Canadians. Investing in their own homes gained four points to +57 in December. The index reflects 69 per cent of those surveyed who said it’s a good or very good time to invest in their own residence, minus 12 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 two points to +36.
- Balanced funds climbed sharply by 15 points, registering the largest gain from the last quarterly poll. The index for balanced funds reached +16, with 42 per cent of those surveyed stating that balanced funds are a good or very good place to invest, compared to 26 per cent who felt the opposite.
- Concerns about stock markets kept the index for investing in equities in negative territory, despite a strong rebound from September. The equity index climbed 10 points, (after falling 25 points in the previous quarter) to reach -12 in the latest poll. Some 29 per cent of those surveyed consider it a good or very good time to invest in stocks, either directly or via mutual funds, while 41 per cent said they still view equities as a bad choice. Some 19 per cent felt it was neither a good nor bad time to buy stocks.
- Fixed income investments (including GICs, annuities) rose slightly by one point to +17, reflecting recent changes in interest rates.
- Cash (including savings accounts) fell only slightly, by three points, but remained among the least favourite destinations for investors. The index for cash fell three points to -1, reflecting 36 per cent who said it’s a good or very good time to have money in cash compared to 37 per cent leaning the opposite direction.
As well as evaluating the six investment categories above, the same question was asked of four investment vehicles.
- Registered Retirement Savings Plans remained the traditionally most popular investment vehicle and climbed eight points from the previous survey. The index of +49 for RRSPs in December reflects 64 per cent of respondents who feel it’s a good or very good time to put money into RRSPs, while 15 per cent said it is a bad or very bad time.
- Registered Education Savings Plans, which rivalled RRSPs in popularity a year ago, remained unchanged. The index for RESPs held at +39 (57 per cent favour investing in an RESP, compared to 18 per cent who disagree).
- Segregated funds registered an increase of four points in its index, to +10, with 38 per cent of those surveyed saying it’s a good time to invest in segregated funds compared to 28 per cent stating the opposite.
- Following a strong decline in the fall, mutual funds returned to positive territory in the latest poll, rising by nine points. The index now stands at +7, rebounding from weaker results through late 2002 amid net redemptions and weaker industry-wide mutual fund sales. Thirty-nine per cent of Canadians polled said now is a good or very good time to invest in mutual funds, while 32 per cent said it was a bad or very bad time.
The poll by Maritz: Thompson Lightstone was conducted with 1,002 Canadians aged 18 and older between December 12 and December 17, 2002. 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 group 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. Fund under management by Manulife Financial were $139.2 billion as at September 30, 2002.
Manulife Financial trades as MFC on the TSX, NYSE and PSE and under “0945” on the SEHK. Manulife Financial can be found on the Internet as www.manulife.com.