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 | Diversification with GIF & GIF encore
Manulife GIF and GIF encore offer a complete range of investment choices for optimum portfolio diversification. With the help of your financial advisor, Manulife segregated funds provide everything you need to develop and maintain the diversified portfolio best suited to achieve your investment goals.
| Asset Class Diversification with Manulife GIF & GIF encore |
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Research shows that the amount of your portfolio that you allocate to each asset type can be more important than your choice of individual investments. In fact, up to 90 percent of your potential returns are based on your asset mix, not on your individual investment choices.
That's why GIF & GIF encore provides full asset class diversification, including geographical diversification beyond Canadian borders.
| Management Style Diversification with Manulife GIF & GIF encore |
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The GIF & GIF encore line-up of equity funds are chosen to ensure a range of investment styles. Manulife takes diversification one step further by also including funds that invest in stocks of companies of different sizes.
Large-capitalizaton (large-cap) funds represent the largest companies in the economy, whereas small-capitalization (small-cap) funds represent the smaller companies in the economy. Because large and small companies often perform at different levels during different economic cycles, holding a mix of market capitalization stocks, in addition to different styles, is an excellent way to diversify the equity portion of your portfolio.
| Sector Diversification with Manulife GIF & GIF encore |
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Because each sector of the economy typically performs at different levels during different economic cycles, it's important to ensure that your portfolio covers a wide range of industry sectors. This sector diversification is key to reducing short-term portfolio volatility and ensuring that your portfolio is exposed to emerging investment opportunities in sectors that are growing.
If you are properly diversified in other areas (asset class and investment style), there is a good chance you are also diversified across a range of industry sectors as well.
The sectors each Manulife GIF & GIF encore contract invests in vary from fund to fund. For complete details, talk to your advisor.
| Diversification Through Fund Manager Selection |
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With 15 leading fund companies managing more than 60 funds available through Manulife GIF & GIF encore, your style diversification opportunities are enhanced even further, as each manager employs different methods of stock selection.
While value and growth are two important styles of investing, there are many other variations in investment styles used by our fund managers. By holding different funds managed by different fund managers, you achieve a greater level of portfolio diversification.
Other investment styles used by our fund managers include: top-down versus bottom-up; fundamental versus technical analysis; qualitative versus quantitative analysis; buy and hold versus active trading.
Top-down versus bottom-up
A bottom-up strategy for stock picking is based primarily on an analysis of each individual stock before looking at other factors, such as the outlook for the economy or particular industry. A top-down strategy focuses first on the economy in general, identifying groups of companies that will do well in the current environment, then looks at individual companies they expect will do well.
Fundamental versus technical analysis
Fundamental stock investment analysis involves looking at the strength of the company whose business prospects form the basis for the value of its stock. This can involve calculations of such things as a company's growth rate, financial strength and management effectiveness. Fundamental analysis also involves research into the industry and economic environment in which the subject company competes.
Technical analysis involves analyzing recent patterns in the movement of a company's stock price to predict future price changes from which the fund may be able to profit and is usually used to capitalize on short-term trading opportunities.
Qualitative versus quantitative analysis
Qualitative analysis involves a more subjective look at factors that can influence a stock's potential, from the quality of the company's management team to the economic outlook for that company's industry sector.
Quantitative analysis involves looking at a number of objective factors about a company and it's stock, such as an analysis of a company's financial statements, and looks at key ratios, such as the stock's price-to-earnings ratio.
Buy and hold versus active trading
Some managers buy stocks and hold them for many years, profiting from growth over time. Other managers actively trade stocks to profit from short-term trends or changes in stock prices.
| Levels of Risk Within Each Style and Asset Class |
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Manulife GIF & GIF encore provide different levels of investment risk within each asset class and investment style. This allows you to maintain a diversified portfolio while ensuring a level of investment risk that matches your personal risk comfort level.
| Volatility Ratings Explained |
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The volatility ratings are based on the degree to which each fund's returns have fluctuated up and down as compared to other funds. Simply put, a fund with a high volatility level has experienced more variability in month-to-month returns than a fund with low volatility.
A fund's position on the volatility meter represents its annualized three-year volatility relative to other funds in the Manulife GIF & GIF encore fund line-up. Funds that are higher on the volatility meter have shown more volatile performance relative to other funds.
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