“It also provides advisors with access to this market segment – some currently don’t have that access. This ultimately gives them more choice and flexibility in helping their clients.”
Offering one fixed income and two dividend funds, Manulife is the first Canadian financial institution to offer single-asset category ETFs in a segregated fund contract. They are available in the Manulife Private Investment Pools (MPIP) – MPIP Segregated Pools and Manulife GIF Select InvestmentPlus contracts. While the Manulife Smart Corporate Bond ETF seg fund aims to help investors earn income while preserving capital, the Manulife Smart Dividend ETF and Manulife Smart U.S. Dividend ETF segregated funds target a steady income through dividends.
The single-asset focus, added Pappas, allows advisors to tailor their exposure to fit each client’s unique needs. By focusing on a specific market area, whether dividend-paying companies or corporate bonds, advisors can use them as building blocks in constructing a client portfolio. She explained: “Some portfolio solutions might have a 60-40 allocation but depending on the client profile, an advisor might determine that 70-30 is more appropriate. It’s not always a one-size fits all with a portfolio solution. This gives them the ability to customize, and it’s backed by the strength our portfolio management teams.”
ETFs account for around $753 million1 of the total $165 billion in seg fund assets in Canada but it’s an area that’s growing fast. On top of this, Pappas said Manulife was able to “sharpen its pencils to hit a very compelling price point”. The management expense ratios for the MPIP segregated pools product range from 1.57% (corporate bond) to 2.14% (U.S. dividend), while on the InvestmentPlus side, the range is 1.96% to 2.5%2.
She added: “We believe that combining Manulife’s strong-performing ETFs with the benefits of a segregated fund contract provides clients with more choice and flexibility to help them achieve their financial goals. We’re really excited about this new offer and we think it’s really going to resonate with clients and advisors.”