WATERLOO, ON, April 19, 2005 – Canadians seem to be leaning a bit more
toward fixed income and cash this spring, although homes and RRSPs remain their most popular places to invest, according to a recent national poll for Manulife Financial, Canada’s leading insurance and wealth management company.
The 25th quarterly Manulife Investor Sentiment Index, based on a national survey in late March, found four of 10 categories of investments and vehicles gained ground over the previous poll in December. Interest in cash and fixed income investments showed the strongest gains among those areas surveyed, while stocks and segregated funds gained slightly.
Based on a survey of 1,000 Canadians by Maritz Research, the overall Manulife Investor Sentiment Index remained at +17 in March, identical to the latest index poll in December.
“Overall, investor sentiment among Canadians remains relatively strong, despite some slight changes in where and how they invest,” said Bruce Gordon, Manulife Financial’s Senior Executive Vice President and General Manager, Canada. “We saw the index reflect sensitivity to predictions of possibly higher interest rates in late 2004, but investors generally remain focused on their long-term savings.”
Since it was launched five years ago, the Manulife Investor Sentiment Index consistently held in positive territory overall — peaking at +35 in early 2000 and marking a low of +11 in December 2001.
The quarterly index monitors how Canadians say they feel about investing in 10 different categories and vehicles. The index reflects the percentage of those who say they believe it is a good or very good time to invest — minus those who feel the opposite.
“Canadians have remained positive about investing during the past six years — through some very interesting and sometimes difficult periods,” Mr. Gordon noted.
“Manulife offers a wide range of financial services and products to more than one in five Canadians,” Mr. Gordon added. “Given changes in the economy and markets, investors need to keep working closely with their advisors on how to best balance their guaranteed versus variable investments to reach their long and short-term goals.”
Fixed income, cash lead gains
Among six investment categories measured each quarter, all remained in positive territory with the largest gains in March appearing for fixed income and cash, since the previous poll in December. Both gained four points, while investing in stocks or segregated funds gained one point.
Highlights
The Manulife Investor Sentiment Index is determined by the following six investment categories:
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Investing in their own homes (either through renovations or paying down the mortgage) remains the most popular place for Canadians to put their money. The real estate index fell back to +45, down five points from December after climbing five points from the previous September survey. The index reflects 60 per cent of those surveyed who said it’s a good or very good time to invest in their own residence, minus 15 per cent who believe it’s a bad or very bad time.
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Real estate other than their own homes was the next most popular investment, at +24, down four points from December.
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The third most-popular category, balanced funds, eased one point to +16 in March. Among those surveyed, 39 per cent felt balanced funds are a good or very good place to invest, compared to 23 per cent who said the opposite.
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Fixed income investments (including GICs and annuities) rose four points to +12. Fixed income began gaining ground last September, amid speculation of higher rates, after a drop of seven points last June and a nine-point decline a year ago.
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Cash (including savings accounts) registered a four-point increase and also remains among the least favourite destinations for investors. The cash index reached +1.
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Despite a one-point gain, the index for stocks barely edged out of negative territory to reach 0. The stocks index reflects 31 per cent who said it’s a good or very good time to invest in stocks, either directly or via mutual funds, while exactly the same percentage view equities as a bad choice. Another 23 per cent felt it’s neither a good or bad time to buy shares.
Investment Vehicles
As well as evaluating the six investment categories, the same question was asked of four investment vehicles.
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Registered Retirement Savings Plans continue to be popular – and remained the leading investment vehicle. In March, the RRSP index eased two points to +41. That result reflects 60 per cent of respondents who feel it’s a good or very good time to put money into RRSPs, while 19 per cent said it is a bad or very bad time.
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After posting the largest increase in December, Registered Education Savings Plans fell back three points to +28. The index for RESPs reflects 48 per cent who say now is a good time to invest through an RESP, compared to 20 per cent who disagree.
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The index for mutual funds reflected the largest decline, easing eight points to +12, after climbing 10 points in December. The Manulife poll found 36 per cent of those surveyed said now is a good or very good time to invest in mutual funds, while 24 per cent said it was a bad or very bad time. Twenty-two per cent answered that it was neither a good or bad time for funds.
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Segregated funds showed the only gain in March, climbing one point to reach +6. Thirty-three per cent of those surveyed said it’s a good time to invest in segregated funds, compared to 27 per cent stating the opposite.
The poll by Maritz Research was conducted with 1,000 Canadians aged 18 and older between March 24 and March 30, 2005. 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. Funds under management by Manulife Financial and its subsidiaries were Cdn$348 billion (US$289 billion) as at December 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.
