Manulife Investor Sentiment Index rises sharply

Canadians more optimistic as March poll nears 10-year high

WATERLOO, ON, April 7 /CNW/ - More Canadians say it's a good time to invest, in everything from their own homes to the stock market and investment funds, according to a national poll for Manulife Financial, Canada's leading insurance and wealth management company.

Each category in the index gained ground - some sharply - to register the biggest jump in the quarterly poll in a decade, up 15 percentage points to +33 - just shy of its peak of +35 exactly 10 years ago.

"We're seeing much more positive news about the economy and that certainly helps Canadians' attitudes," said Paul Rooney, President and CEO, Manulife Canada. "Given the economic challenges in 2008 and 2009, we're now seeing some steady job growth and a renewed confidence in many areas."

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.

"We always encourage people to work closely with an advisor and stick to a financial plan," Mr. Rooney added. "That helps them stay focused on their long-term goals, balance their various types of investments and better manage their cash flows."

Overall index

After a decline of seven points in December, the overall Manulife Investment Sentiment Index shot up 15 points in March to +33, just below its all-time high in early 2000.

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.

All categories gain ground

The 45th quarterly index survey registered increases all categories and vehicles, showing the sharpest quarterly increase for stocks, which rose 23 percentage points from negative territory to +18 in the poll.

After some wild swings earlier this year, investment property and investing in their own homes both jumped this quarter. 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 climbed 10 points in March to +62. The
        index reflects 69 per cent of those surveyed who said it's a good or
        very good time to invest in their own residence -- minus seven 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
        by rising 13 points in March, after a similar decline in December.
        Investment real estate, at +40, 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 held third place among the most-popular investment
        targets, gaining 15 points since December. Now at +31, the latest
        index for balanced funds reflects 46 per cent who felt they are a
        good or very good place to invest, compared to 15 per cent who said
        the opposite in March.
    -   Fixed income investments ranked fourth in the survey, at +27, and
        jumped up 17 points from the previous quarter, in the March poll.
    -   Equities showed the steepest jump in March, emerged from negative
        territory and ranked fifth among investment categories. It rose by 23
        points in the March survey to rest at +18. The stocks index reflects
        38 per cent who said it's a good or very good time to invest in
        stocks, either directly or via mutual funds, while 20 per cent saw
        equities as a bad or very bad choice. Another 26 per cent felt it's
        neither a good or bad time to buy shares.
    -   Cash (including savings accounts) and fixed income investments
        (including GICs and annuities) fell back to its traditional last
        place among popular places to put money, at +17, up seven 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.

    Investment Vehicles

    As well as evaluating the six investment categories, the same question was
asked of five investment vehicles.
    -   Tax-free savings accounts were added in this poll among investment
        vehicles and took over top spot from RRSPs and RESPs. Almost seven of
        every 10 Canadians (68 per cent) said now is a good time to choose a
        TFSA, compared to only six per cent who were negative.
    -   Registered Retirement Savings Plans ranked closely behind TFSAs in
        March, at +54 in this latest poll, up 14 points. Some 65 per cent of
        those surveyed said now is a good time to invest, compared to 11 per
        cent who disagreed.
    -   Among Canadians' other favourite vehicles, Registered Education
        Savings Plans gained six points from the previous poll. At +49, the
        latest results for RESPs reflect 59 per cent of respondents who feel
        it's a good or very good time to put money into an RRSP, while 10 per
        cent said they feel it is a bad or very bad time.
    -   Segregated funds also rose in popularity this quarter by 11 points,
        to reach +27, to keep their lead over mutual funds in the poll.
        Segregated funds were favoured by 44 per cent of respondents, while
        17 per cent leaned the opposite direction.
    -   At +25, the index for mutual funds gained 12 points in March. Mutual
        funds were hit hard in surveys in late 2008, when the index suffered
        a 31-point drop. The latest mutual fund index reflects 43 per cent
        who say now is a good or very good time to invest in mutual funds,
        while 18 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 March 18 and 24, 2010. The results have a margin of error of +/- 3.1 percentage points, 19 times out of 20.

To view the Manulife Investor Sentiment Index, please go to http://files.newswire.ca/16/Manulife_Index.doc.

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 $440 billion (US$ 420 billion) as at December 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.

For further information: Media contact: Tom Nunn, Manulife Financial, [phone], [email protected]