Economic News/Trends and Analysis — July 2, 2009

Manulife Investor Sentiment Index gains as Canadians keep investing

    More than four of five expect finances to hold or improve in next six
    months

    WATERLOO, ON, July 2 /CNW/ - 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.

For further information: Media contact: Tom Nunn, Manulife Financial,
(519) 594-8578, tom_nunn@manulife.com

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