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(May 22, 2007) Bad news for the equity industry: State Street Global Markets announced Tuesday that global investor confidence fell in May by 1.8 points, to 91.2. In April, confidence was at 93 points.

The drop can be attributed to North America, where institutional investors’ confidence fell from 102.6 to 99.9 points. That’s in contrast to Europe and Asia, where investor confidence increased. In Europe it was up 3.7 points from 90.5 last month to 94.2 points in May, while the positive outlook in Asia saw a 2.6-point increase from 81.7 to 84.3.

“In the wake of a weak domestic first quarter, U.S. investors continue to behave with some trepidation,” said Ken Foot, a Harvard University professor and co-developer of the State Street Investor Confidence Index, in a release. “Globally, prospects remain good as worldwide demand remains strong through the first quarter, impacting inventories. This provides the backdrop for the improved sentiment outside the U.S.”

The index’s other mastermind and State Street Associates director, Paul O’Connell, added, “This month saw a slight see-saw in flows as institutional investors evinced caution in the early part of May before returning in strength to a broad array of global equity markets in the most recent weeks.”

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Manulife Financial offering group critical-illness insurance

(May 22, 2007) Manulife Financial announced Tuesday that it’s launching a group critical-illness plan. The insurance company will offer lump-sum benefits to Canadian plan members diagnosed with serious ailments.

“When critical illness strikes, you’re faced with many unexpected expenses besides the ones covered under government and group benefits plans,” said Rick Brunet, Manulife’s executive vice-president, group benefits, in a release.

The CI insurance will enhance the coverage already available to members of Manulife’s group health, life and disability plans. Manulife says the lump-sum can be used for a variety of financial needs including replacing income, paying down debts, covering health care costs, or making lifestyle choices like repairing or renovating a home.

Manulife is offering plan sponsors two types of CI policies: primary and comprehensive group critical illness insurance. With primary coverage, only the four most common critical illnesses are covered: cancer, heart attack, stroke and coronary artery bypass surgery. Comprehensive coverage includes those four, plus 18 other conditions.

Brunet says these plans will not only allow people to focus on their health but will also help “attract and retain employees…plus inspire loyalty in the workplace.”

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Scotiabank and Arrow team up on PPN

(May 22, 2007) Scotiabank and Arrow Hedge Partners announced Tuesday that they are teaming up to launch a new series of principal-protected notes.

The Bank of Nova Scotia Arrow Multi-Strategy Fund Deposit Notes are PPNs that provide exposure to the Arrow Multi-Strategy fund — one of Canada’s largest hedge fund-of-funds. Arrow Hedge says the notes are for investors who want principal protection with the possibility of capital growth.

“[This partnership] is consistent with the strategy of providing investors with exposure to potential growth, driven by the pursuit of absolute performance, while protecting them from downside risk,” says Jim McGovern, Arrow Hedge’s CEO.

The fund’s goal, according to Arrow Hedge, is to “generate consistent absolute returns, while limiting the overall volatility of the fund and minimizing the funds’ correlation to major equity of the bond market indices.”

Canadian investors can buy the notes until June 25. They mature June 30, 2015.

(05/22/07)