Manulife’s mutual fund assets rise 18%

It can be hard work for a company with century-plus roots in insurance to gain attention for its money-management operations.

“At meetings in New York, people would comment, ‘You’re the best investment company we’ve never heard of,’ ” jokes Paul Lorentz, executive vice president, Investment and Insurance Solutions at Manulife.

The firm’s responded with more aggressive marketing. “We’re looking at how to leverage the differentiators,” Lorentz tells Advisor.ca. “We’ve put significant effort in putting it out there that we have expertise.”

That effort’s paying off, as evinced by an 18% increase in net mutual fund assets under management to $20.7 billion.

Read: Manulife acquires Wellington West’s MFDA advisors

Further, its funds now rank seventh in year-end stats released by IFIC, moving up three spots during 2012. Presence on major dealer-recommended lists also grew, from seven in 2009 to 31 at the end of 2012.

Looking forward, focus will be on broadening the product shelf and making sure there’s an offering for all markets. The firm is using its managers “for what they’re good at,” and Lorentz notes it doesn’t use Manulife asset managers exclusively, having forged relationships with Mawer, Third Avenue, Brookfield and other third parties.

“We have exclusivity in the Canadian market with those funds, so we can get that management philosophy diversification,” he says. “My next big milestone would be $30 billion, and we’ll have to see when that happens.”

Lorentz notes 43% of sales for the period ending in Q4 2012 were generated through the bank channel.

“The big banks are big users of these types of products,” he says. “Our focus was to fill out the shelf, and we like that this gives us the third-party credibility in terms of uptake for the funds.”

And, there’s emphasis on finding yield and generating income streams for those in or near retirement.

“The biggest thing we’ve built is global fixed income. Everyone’s searching for income,” he says, “but it’s harder to deliver given the environment.”

Read: Mutual fund investors need advice

The firm’s beginning to find success with with recently launched private investment pools aimed at mass affluent clients with at least $150,000 to invest. Clients can move within the 15 funds offered without incurring additional fees, capture some tax efficiencies, and can bundle clients within a household to further reduce fees.

He notes investors and advisors realize the need to go global, but the barrier for some is market access – particularly in hot growth regions like Asia. Those barriers can be particularly high for issues like corporate debt, which offer high yields but can be hard to actually acquire.

“We have the largest on the ground presence in Asia [operating in Hong Kong, China, Taiwan, Japan, Indonesia, the Philippines, Malaysia, Singapore, Thailand, Vietnam and Cambodia as of September 2012]. You need to understand the global market, as well as the micro-economic and political situations,” he says.

“But [you] also [need] to have access to the issues. You have to be able to purchase the debt. Having people on the ground provides competitive advantage.”

Read: Manulife launches private wealth arm

Further, the firm’s been able to leverage the credit experience it applies to its own balance sheets for the mutual fund products.

“The fact that we have the same team that manages the credit operations working in these areas is good for the client,” says Lorentz.

For more, check out Expect lower fixed-income returns: AUDIO. It features a Manulife expert talking about upcoming trends in fixed-income investing.