WATERLOO, ON, April 8 2009 – Canadians are seeing an upside toinvestments generally, and for investment real estate in particular, according to a national poll for Manulife Financial, Canada’s leading insurance and wealth management company.
Eight of 10 investment categories and vehicles gained ground or held steady in a national poll for Manulife conducted in late March, reversing a sharp decline late last year.
“Canadians generally suggested they favoured safer havens over the past six months, but a number of indicators seem to show they’re becoming more optimistic about investing,” said Paul Rooney, President and CEO, Manulife Canada. “Given short-term changes in the economy and markets, we always encourage investors to work closely with their own advisors.”
In its latest national survey of Canadians, the 41st quarterly Manulife Investor Sentiment Index gained six points to reach +11, up from December and from its lowest point in a decade.
The national telephone poll of 1,005 Canadians by Research House, an Environics Company found only two among 10 investment categories and vehicles fell slightly from the previous December survey – when only two categories gained ground.
“Working with an advisor and sticking to a plan can help investors stay focused on their goals, plus help balance their guaranteed versus variable investments,” Mr. Rooney added.
Manulife serves more than one in five Canadians with a wide range of financial services and products and one of our key goals is to help them make better financial decisions, he said.
Majority stick to investment style
Responding to separate survey questions, more than half of Canadians polled (59 per cent) said they’re planning to continue to invest the same amount this year, while another one in five (19 per cent) said they expect to invest more.
Less than a quarter (23 per cent) said they’ll invest less in the year ahead, given the current economic and market environment.
When asked specifically about impact of the current market conditions, two thirds (65 per cent) said they have made no change in the way they invest. Only eight per cent said they permanently changed how they invest, while another 22 per cent said they’re making short-term changes.
Overall index
Since its launch in 1999, the Manulife Investor Sentiment Index has remained in positive territory overall. It peaked at +35 in early 2000, but fell to +11 in December 2001. During the past two years, the index had generally remained near six-year highs, above +20, before dropping sharply in October and again in December.
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.
Investment categories gain ground
The biggest swing in the latest survey showed up with investment real estate, which gained sharply, while cash faced the toughest rap from those surveyed.
Investment property registered the biggest gain in March, rising 23 points, while cash showed the biggest decline by falling eight points. Principal residences still remain the most popular investment category – with a wide lead over every other area.
Highlights
The Manulife Investor Sentiment Index is based on 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 – a consistent finding since 1999. The index for investing in their own home rose seven points in March to +42. The index reflects 55 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.
- Investment real estate overtook cash and fixed investments by gaining 23 points in March, after quickly falling from its second-place rank last March. At +19, investment real estate rebounded from negative territory, which it has seen only twice since the survey began.
- Cash (including savings accounts) dropped back to the third most favourite place to put money at +18. Since 1999, cash had been the least favourite place named by Canadians to leave their money, but registered a sharp rise as other markets fell out of favour.
- Fixed income investments (including GICs and annuities) fell back to fourth place among most popular categories, even though it gained three points from December to reach +13.
- Balanced funds stayed in fifth place among the most-popular investment targets, gaining eight points in March after a sharp 33-point decline in October. Resting at minus three, the index reflects 32 per cent who felt balanced funds are a good or very good place to invest, compared to 35 per cent who said the opposite in March.
- After dropping back sharply last October, equities gained another four points in March, to rest at -21. The stocks index reflects 26 per cent who said it’s a good or very good time to invest in stocks, either directly or via mutual funds, while 47 per cent saw equities as a bad or very bad choice. Another 19 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.
- Registered Education Savings Plans held onto the top spot among favourite vehicles in March, climbing six points to reach +36 in the latest poll. Some 50 per cent of those surveyed said now is a good time to invest, compared to 14 per cent who disagreed.
- Among Canadians’ traditional favourite investment vehicles, Registered Retirement Savings Plans held steady in March, showing no change from the December poll. At +27, the latest results for RRSPs reflect 49 per cent of respondents who feel it’s a good or very good time to put money into an RRSP, while 22 per cent said they feel it is a bad or very bad time.
- After a sharp drop in December, segregated funds gained nine points in March, to widen its gap over mutual funds. New products, like Manulife’s IncomePlus, aimed to protect investors from the downside of the market, have been popular since the initial launch two years ago of the first guaranteed minimum withdrawal benefit product in Canada.
- At -13, the index for mutual funds fell one point in March, following a small decline in December on the heels of a 31-point drop in October. The latest mutual fund index reflects 26 per cent who said now is a good or very good time to invest in mutual funds, while 39 per cent said it was a bad or very bad time. Another 26 per cent answered that it was neither a good or bad time for funds.
The poll by Research House was conducted with 1,005 Canadians aged 18 and older between March 22 and 26, 2009. The results have a margin of error of +/- 3.1 percentage points, 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$385.3 billion (US$363.5 billion) as at September 30, 2008.
Manulife Financial is one of two publicly traded life insurance companies in the world whose rated life insurance subsidiaries hold Standard & Poor’s Rating Services’ highest “AAA” rating.
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.
