More than four of five expect finances to hold or improve in next six months
WATERLOO, ON, July 2 2009 – Canadians are seeing an upside to investments amid the current economic news, according to a national poll for Manulife Financial, Canada’s leading insurance and wealth management company.
Nine of 10 investment categories and vehicles gained ground in a national poll in mid-June for Manulife, with six areas showing double-digit gains over the last quarterly survey in March.
“We’re seeing some strong signs that Canadians are becoming more optimistic about a range of investing, after favouring safer havens over the previous six months,” said Paul Rooney, President and CEO, Manulife Canada. “Canadians seem more interested in real estate, equity, and investment funds, after a stretch of gloomy economic news since late last year.”
In its latest national survey of Canadians, the 42nd quarterly Manulife Investor Sentiment Index gained nine points to reach +20. That reflects a dramatic increase from December, when the index hit its lowest point in a decade, at plus five, then recovered six points in March.
Among 10 investment categories and vehicles, only cash suffered a setback in the national telephone poll of 1,003 Canadians by Research House, an Environics Company.
“We always encourage investors to work with an advisor and stick to a plan so they can stay focused on their goals, plus balance their various types of 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.
Financial futures
In response to a separate question, more than four out of five surveyed (84 per cent) said they expect their finances will be the same or better in six months.
More than half (52 per cent) predict their financial health will be the same, while almost a third (32 per cent) said their finances will be better. About one in seven (14 per cent) said they expect their finances will be worse by the end of this year.
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 several years, the index had generally remained near six-year highs, above +20. But it suffered a sharp drop last October and again in December, to hit an all-time low of +5. The latest poll reflects results last recorded before the recession.
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
For the second straight quarter, the biggest swing came for investment real estate, which gained sharply, while cash faced the toughest rap.
Investment property registered the biggest gain in June, rising 18 points after a 23-point gain in March. 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 14 points in June to +56. The index reflects 65 per cent of those surveyed who said it’s a good or very good time to invest in their own residence — minus nine per cent who believe it’s a bad or very bad time.
- Investment real estate widened its lead over cash and fixed
investments by gaining 18 points in June, after it quickly fell last year from its second-place rank. Investment real estate has quickly rebounded from negative territory in December, which it had seen only twice since the survey began. - Cash (including savings accounts) held onto the third most popular place to put money, at +15. Over the longer term, since 1999, cash traditionally had been the least preferred place named by Canadians to leave their money. Then it recently showed a sharp rise since late last year, as other markets fell out of favour.
- Fixed income investments (including GICs and annuities) remained in fourth place among most popular categories, gaining a single point from March to reach +14.
- Balanced funds climbed out of negative territory to hold fifth place among the most-popular investment targets, gaining 11 points in June after a sharp 33-point decline last October. Resting at +8, the index reflects 36 per cent who felt balanced funds are a good or very good place to invest, compared to 28 per cent who said the opposite in June.
- After dropping back sharply last October, equities gained 13 points to rest at minus eight, the only category among the 10 still in negative territory in the survey. The stocks index reflects 29 per cent who said it’s a good or very good time to invest in stocks, either directly or via mutual funds, while 37 per cent saw equities as a bad or very bad choice. Another 22 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 top spot among favourite vehicles in June, climbing 10 points to reach +46 in this latest poll. Some 59 per cent of those surveyed said now is a good time to invest, compared to 13 per cent who disagreed.
- Among Canadians’ traditional favourite investment vehicles, Registered Retirement Savings Plans regained some ground in June, adding six points from the previous poll. At +33, the latest results for RRSPs reflect 53 per cent of respondents who feel it’s a good or very good time to put money into an RRSP, while 20 per cent said they feel it is a bad or very bad time.
- Segregated funds added nine points for the second straight quarter, to keep their lead over mutual funds. Segregated funds were favoured by 40 per cent of respondents, while 24 per cent leaned the opposite direction.
- At zero, the index for mutual funds regained 13 points in June, following a small gain in March and severe declines last December and October, when the index suffered a 31-point drop. The latest mutual fund index reflects a balance between those who favor and dislike mutual funds – split at 30 per cent on either side. The remainder felt it was neither a good or bad time for funds or did not know.
The poll by Research House was conducted with 1,003 Canadians aged 18 and older between June 17 and 22, 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$405 billion (US$322 billion) as at March 31, 2009.
Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.
