playing it safe
DESCRIPTION
Playing it Safe. The mature investor. Less time for markets to work on your behalf Advisors recommend taking less risks. Principal Protected Notes (PPNs) may be an option. Growth potential of equity markets Conservative investments not providing enough after-tax return. What are PPNs?. - PowerPoint PPT PresentationTRANSCRIPT
Playing it Safe
The mature investor
Less time for markets to work on your behalf
Advisors recommend taking less risks
Principal Protected Notes (PPNs) may be an option
Growth potential of equity markets
Conservative investments not providing enough after-tax return
What are PPNs?
Hybrid investments
Mutual funds, stocks, market indexes
and/or commoditiesBond or GIC
Primary feature
Earn similar rate of return Without risking
principal invested Term-to-maturity
between 5–10 years Some cashable
sooner
Why are PPNs becoming so popular?
Demand
Ability to achieve equity-like market returns
Principal not at risk
Today’s low interest rate environment
GICs, bonds and Treasury bills may only gain 2-3% per annum
PPNs could gain back some of the wealth erosion
Liquidity
Secondary markets exist*
Allow you to redeem PPN before it matures
*Manulife cannot be certain there will be a secondary market for these in the future.
Tax on PPNS
Capital gain or capital loss
Tax incentive to redeem PPN prior to maturity
Gains at maturity treated as interest income
Three reasons why PPNS are popular
1. Low interest rates
2. Aging population
3. Risk-wary investors
Making PPNs part of your financial plan
Take profits
Reinvest profits into a PPN linked to an equity-type investment Capture recent market returns Protect capital Obtain future equity market returns and
minimize undue risk Avoid making untimely market decisions
Alter asset allocation without increasing risk
Substitute for fixed-income investments Can provide a guarantee of principal at
maturity Can function like guaranteed investments
Guard against loss of capital Boost return potential
Leveraged investing with a safety net
Offer benefits of leverage
Help minimize risk Incorporate
leverage to boost returns
Fully protected against potential losses
PPNs take the emotion out of investment decisions
Speak to your advisor
PPNs not sold on a continuous basis
Formulate a strategy that makes best use of features and benefits of PPNs
Important notes
The commentary in this presentation is for general information only and should not be considered investment or tax service to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.
Manulife Investments is the brand name identifying the personal wealth management lines of business offered by Manulife Financial and its subsidiaries in Canada. As one of Canada’s largest integrated financial services providers, Manulife Investments offers a variety of products and services including: segregated funds, mutual funds, principal protected notes, annuities and guaranteed interest contracts.
Manulife and the block design are registered service marks and trademarks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Financial Corporation.
PPNs may not be suitable for all investors and are subject to certain risks, which investors should consider before investing. Some conditions apply. Investors should obtain and read a copy of the Information Statement for all applicable fees, and for an explanation of how the return on the Notes will be determined. Commissions, management fees and expenses all may be associated with this investment. The investor's principal is guaranteed at maturity only for Notes purchased at the issue price and held until the Maturity Date.