RRSPs gain ground among most popular ways to invest: Manulife Investor Sentiment Index

WATERLOO, ON, June 24, 2004 – Canadians’ interest in investing in RRSPs showed the strongest growth in the past quarter and eclipsed investing in their own homes and investment property, according to a recent national poll for Manulife Financial, Canada’s leading insurance and wealth management company.

The 22nd quarterly Manulife Investor Sentiment Index, based on a national survey conducted in early June, found Canadians more positive about Registered Retirement Savings Plans and cash than an earlier national survey in March. Among 10 categories of investments and vehicles, RRSPs and cash gained support over the previous quarterly poll, while interest in the remaining eight areas eased slightly.

The overall Manulife Investor Sentiment Index, based on a survey of 1,002 Canadians by Maritz: Thompson Lightstone, declined four points from March to +18 in the latest survey, but remained three percentage points higher than a year ago.

“Market volatility, interest rates, strong real estate markets and international events all are influencing Canadians’ perceptions of where it’s better to place their money these days,” said Bruce Gordon, Manulife Financial’s Senior Executive Vice President and General Manager, Canada.
“While some areas eased this month, our December and March surveys reflected strong confidence in most areas as Canadians generally continued to stay focused on their long-term goals.”

Since it was launched five years ago, the Manulife Investor Sentiment Index has remained in positive territory overall – peaking at +35 in early 2000 and marking a low of +11 in December 2001.

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 that feels the opposite.

“Generally, Canadians remain positive about investing, even in some very difficult times, and most recently we’re seeing some reaction toward rising real estate prices,” 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 one in five
Canadians and the Index helps us gauge what people 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 swings since March appeared in the index for cash – which rose eight points – while balanced funds fell nine points. Mirroring last summer’s slowdown in interest in housing, investing in their own homes and investment properties
both eased in the June poll. Interest in investment property eased eight points, compared to a five-point drop in the index for investing in their own homes.


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 a popular goal for Canadians – although it eased from the March results to +49, down five points. The index reflects 63 per cent of those surveyed who said it’s a good or very good time to invest in their own residence, minus 14 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 +30, down eight points from March.

  • Balanced funds declined nine points, to +18, following an increase of five points in March and 11 points in December. Among those surveyed, 38 per cent stated balanced funds are a good or very good place to invest, compared to 20 per cent who felt the opposite.

  • The index for investing in stocks fell four points, following a five-point climb in March, a seven-point increase in December and a 12-point jump last September. At +4, the stocks index remains relatively low, but in positive territory for the third quarter since mid-2002. Thirty-three per cent of those surveyed consider it a good
    or very good time to invest in stocks, either directly or via mutual funds, while 29 per cent view equities as a bad choice. Another 16 per cent felt it’s neither a good or bad time to buy shares.

  • Fixed income investments (including GICs and annuities) suffered a drop of seven points, on the heels of a nine-point decline in March. The index for fixed income investments dropped seven points to +4.

  • Cash (including savings accounts) registered a significant eight-point increase, the largest of all areas, but is still the least favourite destination for investors. The cash index reached +2, after being the only category in negative territory in March.

Investment Vehicles

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 remained the leading investment vehicle after being eclipsed by RESPs in December. The index for RRSPs jumped five points to +52 in the latest poll. That result reflects 65 per cent of respondents who feel it’s a good or very good time to put money into RRSPs, while 13 per cent said it is a bad or very bad time.

  • Registered Education Savings Plans registered a slight decrease in the latest poll, falling one point to +39. In March, it had eased 11 percentage points, ranking second among investment vehicles. The index for RESPs reflects 55 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 fell seven points to +14. The Manulife poll found 39 per cent of those surveyed said now is a good or very good time to invest in mutual funds, while 25 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.

  • Segregated funds eased by two points to +11. About 36 per cent of those surveyed said it’s a good time to invest in segregated funds, compared to 25 per cent stating the opposite.

The poll by Maritz: Thompson Lightstone was conducted with 1,002 Canadians aged 18 and older between June 3 and June 10, 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 serving millions of customers in 19 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the Company offers clients a diverse range of
financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Pro forma funds under management by Manulife Financial and it subsidiaries were Cdn$356 billion (US$272 billion) as of March 31, 2004.

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 at www.manulife.com.