More Canadians focus on debt going into 2010: Manulife poll

Manulife Investor Sentiment Index eases after three quarterly gains

WATERLOO, ON, Jan. 5 2010 – After three straight quarters of rising interest in investments, more Canadians say they’re focused on paying down debts as they head into the New Year, according to a national poll for Manulife Financial, Canada’s leading insurance and wealth management company.

Those who say their top priority is to pay down credit cards, lines of credit and mortgages hit a five-year high in Manulife’s poll, conducted in mid-December by Research House, an Environics Company.

More than a quarter of Canadians (28 per cent) said their top priority is to trim their consumer credit, up from 24 per cent a year ago and 20 per cent in early 2008.

The next most-cited priority – to pay down the mortgage – was chosen by 14 per cent, up from 11 per cent a year ago.

The third priority – saving for retirement – was named by 11 per cent of 1,000 respondents in the national poll, down from 14 per cent a year ago.

“Paying down debts is understandably a priority, particularly at this time of year,” said Paul Rooney, President and CEO, Manulife Canada. “Given the economic challenges in 2009, we shouldn’t be surprised to see more Canadians focused on ensuring their financial house is in order.”

When asked about their overall financial shape, 46 per cent said they believe they are in better financial health compared to five years ago – that’s off from 51 per cent in 2009 and 60 per cent the previous year.

Another 28 per cent now feel they’re in the same financial boat as late 2004, while one in four felt worse off.

“It’s been a volatile year for many Canadians and we always encourage people to work closely with an advisor and stick to a plan,” Mr. Rooney added. “That helps them stay focused on their long-term goals, plus balance their various types of investments and better manage their cash flows.”

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.

Overall index

After three straight quarterly gains, the poll results showed the overall Manulife Investment Sentiment Index fell back seven points compared to three months earlier, to +18 in mid-December.

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 a year ago and again in December, to hit an all-time low of +5.

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.

Balanced, mutual funds gain ground

The 44th quarterly index survey registered increases for balanced and mutual funds, while segregated funds held steady compared to results in September. The other seven of 10 investment categories and vehicles lost ground.

After some wild swings earlier this year, investment property and investing in their own homes both eased this quarter. Principal residences still remain the most popular investment category – with a wide lead over every other area.


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 fell five points in December to +52. 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 13 per cent
    who believe it’s a bad or very bad time. The remainder was undecided.
  • Investment real estate held its lead over cash and fixed investments
    but fell back 13 points in December, after several strong recent
    gains. Investment real estate, at +27, still was up from a year ago
    when it fell to negative territory, which it had seen only twice
    since the survey began.
  • Balanced funds climbed further from negative territory to hold third
    place among the most-popular investment targets, gaining two points
    in December. A year ago, balanced funds showed a sharp 33-point
    decline. Now at +16, the latest index for balanced funds reflects
    42 per cent who felt they are a good or very good place to invest,
    compared to 26 per cent who said the opposite in December.
  • Cash (including savings accounts) and fixed income investments
    (including GICs and annuities) were tied as the fourth most popular
    place to put money, at +10, both down eight points from the last
    poll. 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.
  • After gaining ground last September, equities lost six points to rest
    at minus 5, the only category among the 10 in negative territory in
    the survey. The stocks index reflects 33 per cent who said it’s a
    good or very good time to invest in stocks, either directly or via
    mutual funds, while 38 per cent saw equities as a bad or very bad
    choice. Another 18 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 December, at +43 in this latest poll. Some 57 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 lost a single point from the
    previous poll. At +40, the latest results for RRSPs reflect 58 per
    cent of respondents who feel it’s a good or very good time to put
    money into an RRSP, while 18 per cent said they feel it is a bad or
    very bad time.
  • Segregated funds held steady this quarter at +16, to keep their lead
    over mutual funds in the poll. Segregated funds were favoured by
    40 per cent of respondents, while 24 per cent leaned the opposite
  • At +13, the index for mutual funds gained six points in December
    after regaining 20 points in June and September. Mutual funds were
    hit hard in surveys last December and September, when the index
    suffered a 31-point drop. The latest mutual fund index reflects
    40 per cent who say now is a good or very good time to invest in
    mutual funds, while 27 per cent considered it a bad or very bad time
    to invest in mutual funds. Another 23 per cent felt it was neither a
    good or bad time for funds or did not know.

The poll by Research House was conducted with 1,000 Canadians aged 18 and older, between December 10 and 14, 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 22 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the Company offers customers 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$437 billion (US$407 billion) as at September 30, 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