WATERLOO, ON, June 29, 2005 – Canadians are showing more optimism about almost every area where they invest as they head into this summer, pushing investor sentiment to its highest level in more than a year, according to a recent national poll for Manulife Financial, Canada’s leading insurance and wealth management company.
The 26th quarterly Manulife Investor Sentiment Index, based on a national survey in mid-June, found nine of 10 categories of investments and vehicles gained ground over a previous poll in March. Stocks, balanced funds, fixed income and investment property showed the strongest gains among those areas surveyed, while the flip side – holding cash – was the only area that fell slightly.
Based on a survey of 1,000 Canadians by Maritz Research, the overall Manulife Investor Sentiment Index gained five points to +22 in June, the highest level since March 2004.
“Canadians are showing some strong interest in a range of investments, which has been reflected in equity and real estate markets in the past several months,” said Bruce Gordon, Manulife Financial’s Senior Executive Vice President and General Manager, Canada. “In late 2004, the index reflected sensitivity to predictions of possibly higher interest rates, but investors seem to have shaken that off and remain focused on long-term savings and investment plans.”
Since it was launched in 1999, the Manulife Investor Sentiment Index has remained in positive territory overall, hitting a peak of +35 in early 2000 and 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.
“We’re seeing the index near a peak that we’ve seen only three times since 2001 and Canadians remain positive about investing, even through some very interesting and sometimes difficult periods,” Mr. Gordon added.
“Manulife offers a wide range of financial services and products to more than one in five Canadians,” Mr. Gordon said. “We always encourage investors to keep working closely with their advisors, particularly given changes in the economy and markets, to best balance guaranteed versus variable investments to reach their long and short-term goals.”
Balanced funds, investment real estate lead gains
Among six investment categories measured each quarter, all remained in positive territory with balanced funds and investment real estate showing the largest gains since the previous poll in March. Both rose eight points, while investing in stocks and fixed income vehicles gained seven points.
The Manulife Investor Sentiment Index is determined by the following six investment categories, shown by order of their overall ranking in the survey.
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 rose to +47, up two points from March. The index reflects 61 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 +32, up eight points from the previous survey.
The third most-popular category, balanced funds, also rose eight points to +24. Among those surveyed, 44 per cent felt balanced funds are a good or very good place to invest, compared to 20 per cent who said the opposite.
Fixed income investments (including GICs and annuities) rose seven points to +19. Fixed income began gaining ground in late 2004, amid speculation of possibly higher interest rates, and continues to remain high compared to its low of +4 a
With a seven-point gain, the index for stocks remained in positive territory to reach +7. The stocks index reflects 34 per cent who said it’s 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 20 per cent felt it’s neither a good or bad time to buy shares.
Cash (including savings accounts) returned to its traditional place as the least favourite destination for investments, registering a two-point decline. The cash index reached +3.
As well as evaluating the six investment categories, the same question was asked of four investment vehicles.
Registered Retirement Savings Plans continue to be popular – and remained the leading investment vehicle. In June, the RRSP index claimed nine points to +50. That result reflects 65 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.
After posting the largest increase last December, Registered Education Savings Plans again showed the strongest gains by climbing 10 full points to +38. The index for RESPs reflects 54 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 also showed a strong rebound by rising eight points to +20, after falling eight points in the previous March poll. The Manulife survey found 41 per cent of those surveyed said now is a good or very good time to invest in mutual funds, while 21 per cent said it was a bad or very bad time. Nineteen per cent answered that it was neither a good or bad time for funds.
Segregated funds showed a strong gain in June, climbing six points to reach +12. Thirty-seven 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 Research was conducted with 1,000 Canadians aged 18 and older between June 9 and June 14, 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$350.3 billion as at March 31, 2005.
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.