WATERLOO, ON, April 20, 2004 – Canadians’ interest in investing remained
near a two-year high early in 2004, according to a recent national poll for
Manulife Financial, one of Canada’s leading insurance and wealth management
The 21st quarterly Manulife Investor Sentiment Index, based on a national
survey conducted in late March, found Canadians generally continue to be
optimistic about almost all types of investments and vehicles, with equities,
balanced funds and mutual funds showing the strongest gains since late 2003.
The overall Manulife Investor Sentiment Index declined one point to +22
in the latest survey, its second-highest level since mid-2002.
Among all 10 categories of investments and vehicles, four gained strength over a previous national poll in December, while interest in the remaining six areas eased slightly.
“We saw a fairly strong market environment early this year and more Canadians were seeing positive developments, which was reflected in our December poll as well,” said Bruce Gordon, Manulife Financial’s Executive Vice President and General Manager of Canadian Operations. “In December, we found all 10 categories gained strength and Canadians generally continue to stay focused on their long-term goals.”
During the past five years, the Manulife Investor Sentiment Index has remained in positive territory overall, reaching a peak of +35 in mid-2000, followed by a low of +11 in December 2001.
The overall Spring 2004 Manulife Investor Sentiment Index of +22, based on a survey of 1,002 Canadians by Maritz: Thompson Lightstone, was up six points from last spring’s level of +16.
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 feel the opposite.
“Generally, Canadians have remained positive about investing, even in some very difficult times, and now we’re seeing renewed strength amid a less volatile investment climate,” Mr. Gordon noted.
“Investors need to work closely with their advisors to assess their short-term needs and long-term objectives, while closely reviewing their guaranteed versus variable investments,” Mr. Gordon added. “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 generally are saying about where they favour investing in the prevailing economy,” Mr. Gordon said.
Equities, balanced funds lead gains
Among six investment categories in the quarterly survey, the largest swing since December appeared in the index for investing in both equities and balanced funds, reflecting renewed strength in equity markets and relatively low interest rates for other savings vehicles. After a mid-2003 slowdown in interest in housing, investing in their own homes and investment properties continue to be the two leading investment categories and the most popular places for Canadians to put their money.
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
although it eased two points from December’s results to +54. The index reflects 67 per cent of those surveyed who said it’s a good or very good time to invest in their own residence, minus 13 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, at +38, up one point from December.
Balanced funds showed a strong gain of five points, following an increase of 11 points in December, to reach +27. Of those surveyed, 47 per cent stated balanced funds are a good or very good place to invest, compared to 20 per cent who felt the opposite.
Somewhat renewed stability for stock markets helped to generate a five point climb in the index for investing in equities, following a seven-point increase in December and a 12-point jump last September. At +8, the stocks index remains relatively low, but entered positive territory for the second time since mid-2002. Thirty-five per cent of those surveyed consider it a good or very good time to invest in stocks, either directly or via mutual funds, while 27 per cent view equities as a bad choice. Another 19 per cent felt it’s neither a good or bad time to buy stocks.
Fixed income investments (including GICs, annuities) suffered a drop of nine points from December, falling to +11, reflecting recent declines in interest rates for savings accounts.
Cash (including savings accounts) registered a decrease as well, down four points, and still the least favourite destination for investors. The cash index eased to minus six, making it the only category in the survey that remains in negative territory.
As well as evaluating the six investment categories above, the same question was asked of four investment vehicles.
Registered Retirement Savings Plans continue to be popular – and returned as the most favoured investment vehicle after being eclipsed by RESPs in December. The index for RRSPs fell by a single point to register +47 in the latest poll. That result reflects 64 per cent of
respondents who feel it’s a good or very good time to put money into RRSPs, while 17 per cent said it is a bad or very bad time.
Registered Education Savings Plans registered the single largest decrease in the latest poll, falling 11 points after showing a strong 18-point jump in December. In March, it eased to +40, falling back to second among leading investment vehicles. The index for RESPs
reflects 56 per cent who say now is a good time to invest through an RESP, compared to 16 per cent who disagree.
The index for mutual funds gained three points to reach +21, mirroring an industrywide return to net sales in recent months. The Manulife poll found 44 per cent of those surveyed said now is a good or very good time to invest in mutual funds, while 23 per cent said
it was a bad or very bad time. Sixteen per cent answered that it was neither a good or bad time for funds, or that they didn’t know, compared to 34 per cent who were unsure in December.
Segregated funds lost some support, falling by five points to +13. About 37 per cent of those surveyed said it’s a good time to invest in segregated funds, compared to 24 per cent stating the opposite.
The poll by Maritz: Thompson Lightstone was conducted with 1,002 Canadians aged 18 and older between March 25 and March 30, 2004. 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. Funds under management by Manulife Financial were
Cdn$156.7 billion as at December 31, 2003.
Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE,
and under ‘0945’ on the SEHK. Manulife Financial can be found on the Internet