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What do you mean by "purchase" or "sell" ?
We use the terms “purchase” or “sell” in relation to units to describe the consequences of the following transactions:
- transfer of assets between funds
- investment of contributions to the plan
- a withdrawal
- systematic assets reallocation
- lifecycle movement
In fact, you do not own any unit under the policy. When such transactions are made, no units are purchased or sold. It is Manulife that purchases or sells the assets of the funds in order to adjust the fund holdings in light of all transactions made by policyholders and their members. Though the use of words such as “purchase” or “sell” do not accurately reflect the nature of the policy issued by Manulife, it makes it easier for you to understand these various transactions.”
On-Line Asset Rebalancing (OLR)
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To achieve your retirement goals you need to create a target investment mix that is consistent with your Investor Profile by:
Over time, unless your Investor Profile has changed, your target investment mix should not. However, day-to-day market fluctuations will cause your asset allocation to change, as a result your allocation may then become either more conservative or more aggressive than your target investment mix. Traditionally, to maintain their target investment mix, investors had to monitor and manually rebalance their assets. Manual rebalancing of assets required investors to perform calculations, and then request inter-fund transfers; this process could be time-consuming and complicated. On-Line Asset Rebalancing (OLR)offers the alternative of rebalancing assets promptly and easily with one click of a button.
Click on a subject below to find out more about OLR.
Yes. Dollar Cost Averaging is the recommended method of investing fixed dollar amounts in an investment fund on a regular basis. Due to market fluctuations, the same dollars will buy more units when the prices are low and fewer units when prices are high. The result is a reduction in the level of risk involved in timing the market (i.e. purchasing units at a high price, and/or selling units at a low price). OLR complements Dollar Cost Averaging by maintaining a disciplined approach to investing.
Market-related funds (including Daily Interest Accumulator (DIA) guaranteed fund) as well as Compound Interest Accumulator (CIA) guaranteed funds will be included in the rebalancing. Please note that the asset mix for CIA funds or Limited Liquidity Funds may be increased through rebalancing, but will not be decreased (doing so could cause an adjustment to the market value of the guaranteed funds or create liquidity issues for the funds considered limited liquidity). If you wish to move money out of guaranteed funds or limited liquidity funds, you can do so by performing an interfund transfer.
Yes. OLR, as is the case with target investment mix instructions, is performed on an account-by-account basis. You may use OLR with each account for which you have investment mix discretion.
Because your investor profile will change over the course of your pre-retirement life, your investment mix should as well. You can therefore make a change to your target investment mix, and your reinvestment mix (for guaranteed funds) at any time.
OLR is available for all registered plans (due to their tax-sheltered nature). OLR is not available for non-registered plans due to the capital gains implication when selling market-related funds.
OLR will be performed for minimum rebalancing amounts of $300 (in total, for all funds affected).
No. OLR is an inter-fund transfer (IFT); because only one IFT may be processed per day you must wait until the next day to request an inter-fund transfer (through the VIP Room or through one of our Group Savings & Retirement representatives).
Only the exact amounts required to perform the rebalancing are sold. (Recall that guaranteed funds will not be sold as part of a rebalancing).
As shown in
Yes. Any asset rebalancing operation that you perform, whether manually or online, is subject to the Policy and procedure with respect to excessive trading. Only Systematic Asset Rebalancing (SAR) is excluded from the policy.
Example A, where only market-related funds (excluding limited liquidity funds) are held;rebalancing will perfectly align the funds with the target investment mix.
Example B, where assets are allocated to market-related funds and CIA guaranteed funds are held; rebalancing will come as close as possible to (although not necessarily reach) the target investment mix, since guaranteed funds and limited liquidity funds cannot be sold through rebalancing.
For example, the CDN Equity fund is rebalanced as follows:
Please note that certain information, such as the total “assets rebalanced”, found in these examples are not available to members. It is calculated and used by the system automatically. Should you require any further explanation on rebalancing, please contact one of Manulife's Group Savings & Retirement representatives at 1 800 242-1704. |
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