2006 News Releases

Waterloo – Canadians’ investment sentiment registered its first decrease in two years as real estate and registered savings plans both showed softness, according to a national poll for Manulife Financial, Canada’s leading insurance and wealth management company.

The 31st quarterly Manulife Investor Sentiment Index fell six points to +23 in September, the first decline since March, 2005.

“The index for the previous five quarters suggested Canadians were showing a very stable and relatively high level of confidence in long-term investing,” said Bruce Gordon, Manulife Financial’s Senior Executive Vice President and General Manager, Canada. “They are still confident, since all categories remain in double-digit, positive territory, but we’ve seen some concerns surface about real estate markets, particularly in the United States. Both investing in other properties and their own homes registered declines this quarter.”

The latest survey, of 1,001 Canadians by Maritz Research, shows eight of 10 categories of investments and vehicles edged lower from the last poll in June. After showing up as the only declines in June, stocks and cash registered the only gains in September.

The overall index
“Overall, the index has remained above +20 for the past six quarters and that’s generally a good sign,” Mr. Gordon added. “Through much of 2004 and into 2005 we were in softer territory, so we’re optimistic about this overall economic picture given recent Conference Board measures of consumer confidence in Canada.”

Since its launch in 1999, the Manulife Investor Sentiment Index has remained in positive territory overall, hitting a peak of +35 in early 2000 and a low of +11 in December 2001.

Its first major decline in mid-2001 followed a period of stock market volatility. Continued stock market woes and terrorist attacks in the United States later that year led to a sharp decline in the index.

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.
“Manulife’s wide range of financial services and products serve more than one in five Canadians, and among our key objectives is to help them make better financial decisions,” Mr. Gordon said.

“We always encourage investors to work closely with their advisors, particularly given short-term changes in the economy and markets. That helps them to balance guaranteed versus variable investments, as well as stay focused on their short- and long-term goals.”

All categories remain in double-digit, positive territory
All six investment categories and four vehicles measured each quarter remained in double-digit, positive territory in September – only the second time that’s occurred since the surveys began in 1999.

Among investment categories, putting money in real estate fell by 14 points for investment property and seven points for their own home. Fixed income investments reversed a previous gain in June by falling seven points. Balanced funds also fell seven points, while the index for equities rose one point. Cash -- the only other category to gain any ground -- rose by two points.

Highlights

The Manulife Investor Sentiment Index is determined by 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 seven points in September to +47. The index reflects 61 per cent of those surveyed who said it’s a good or very good time to invest in their own residence -- minus 14 per cent who believe it's a bad or very bad time.
  
• Balanced funds emerged as the second most-popular spot, even though it lost seven points to +25. Among those surveyed, 47 per cent felt balanced funds are a good or very good place to invest, compared to 22 per cent who said the opposite.
  
• Fixed income investments (including GICs and annuities) also fell seven points to +23. Fixed income began gaining ground in late 2004 amid speculation of possibly higher interest rates, and continues to remain relatively high compared to its low of +4 in mid-2004.
  
• After a strong gain in June, investment real estate fell back to fourth place among most popular investment destinations -- by falling 14 points from the previous survey to +18.
  
• Cash (including savings accounts) showed a slight gain this quarter, climbing two points to +14 in September. Cash continues to vie with equities among the least favourite places to leave money.
  
• After falling three points last quarter, the index for equities edged up slightly +12, up by one point. 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 26 per cent view equities as a 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.

• Among Canadians’ favourite investment vehicles, Registered Retirement Savings Plans fell 14 points in the latest survey to reach +44, its lowest point since March 2004. The latest result reflects 62 per cent of respondents who feel it’s a good or very good time to put money into RRSPs, while 18 per cent said they feel it is a bad or very bad time.
  
• Registered Education Savings Plans also softened dramatically by 12 points to +35 in the September survey, after wiping out a previous 12-point gain in June. Some 54 per cent of those surveyed said now is a good time to invest, compared to 19 per cent who disagree.
  
• The index for mutual funds fell from its post-2001 high in June, by dropping eight points to +23. The Manulife survey found 45 per cent said now is a good or very good time to invest in mutual funds, while 22 per cent said it was a bad or very bad time. Another 17 per cent answered that it was neither a good or bad time for funds.

  The last time the mutual fund index registered +23 or lower was exactly a year ago.
  

• Segregated funds, perhaps the least understood of the investment categories, now stands at +10, compared to +6 a year ago.

The poll by Maritz Research was conducted with 1,001 Canadians aged 18 and older between September 18 and September 24, 2006. The results have a margin of error of +/- three per cent, 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$370 billion (US$332 billion) as at June 30, 2006.

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.

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

Manulife Investor Sentiment Index