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(October 3, 2006) Manulife Investments has announced a new product which the company says mimics a U.S. variable annuity.

Income Plus will provide a guaranteed minimum withdrawal benefit, said Roy Firth, executive vice-president at Manulife Financial, at a news conference in Toronto. Firth notes over 80% of variable annuities’ growth in the U.S. is due to the popularity of guaranteed minimum withdrawal products — a market which exceeds $356 billion US.

Manulife hopes Income Plus will address investor concerns about outliving their money, deriving enough yield from their retirement income and market volatility.

Moshe Milevsky, associate professor of finance at York University, noted that while asset allocation is key to investment performance, it alone cannot remove longevity risk in a client’s portfolio. So when retirees are ready to withdraw from their portfolios, he says there needs to be “more product allocation” — different types of products that protect against negative market returns.

Income Plus includes a wide range of funds managed by AIM Trimark, CI Investments, Fidelity Investments, Mackenzie Financial and MFC Global Investment Management.

The new offering will be available to insurance-licensed advisors starting October 23.

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Vasic expects TSX to outperform in October

(October 3, 2006) The month of October has historically been difficult for stock markets, but this year could be different, at least for the TSX, according to UBS researcher George Vasic.

In a research note released Tuesday, Vasic notes that over the last 50 years, October’s performance has tended to be the reverse of the summer that just passed, so relatively strong June-to-Septembers have been followed by weakness in October, and vice versa.

“Since the TSX has had a middling summer while the S&P 500 has had a strong June-to-September, relative performances are apt to reverse this month,” he says. “Going forward, this has also presaged the TSX outperforming the S&P 500 in the subsequent November-to-May period, which is consistent with UBS’s respective targets of 13,250 for the TSX and 1,450 for the S&P 500.”

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CIBC reduces exposure to stocks, trusts

(October 3, 2006) Citing an “imploding” housing market that could slow the U.S. economy, CIBC World Markets has updated its recommended asset mix, cutting two percentage points off both stocks and income trusts.

Those four percentage points will be split evenly between the bond and cash categories. CIBC’s new asset mix is 57% stocks, 33% bonds, 8% trusts and 2% cash.

“We continue to assume a more rate-sensitive posture in our portfolio by moving two percentage points from stocks to bonds and by increasing weighting in dividend-rich financial and telecom stocks at the expense of our weighting in natural gas stocks,” CIBC says in its Canadian Portfolio Strategy Outlook.

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National Bank joins bond index

(October 3, 2006) National Bank Financial will begin contributing bond pricing for the calculation of the S&P/TSX Canadian Bond Index starting October 5, Standard & Poor’s announced Tuesday.

CIBC World Markets, RBC Capital Markets, BMO Nesbitt Burns, Casgrain & Company, Desjardins Securities, Laurentian Bank Securities, Merrill Lynch Canada and TD Securities already contribute to the bond index.

The multiple dealer prices are combined into a single blended price, which is calculated at end of day, for each index bond. “Additional price providers help facilitate the transparency of the fixed income marketplace in Canada,” said Steve Rive, vice-president of Canadian Index Services at Standard & Poor’s.

“The S&P/TSX Canadian Bond Index is an important tool for investors because of its independence and breadth of pricing sources,” he added. “It’s the only fixed income index in Canada offering investors such a comprehensive view of the investment-grade segment of the market.”

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