Click on the first letter of the definition you need.

A

Adjusted cost base (ACB)
A calculation used to determine the cost of an investment for tax purposes. It is calculated by adding your costs related to the purchase of a stock or mutual fund – your initial investment, contributions, reinvested distributions, as well as any brokerage fees or commissions. The result is then divided by the number of shares or units you own.

Annual Return
Fund performance for a specific twelve-month period.

Annuity
A series of payments of a fixed amount for a specified period of time. A life annuity will continue for the lifetime of the recipient.

Asset mix
Current allocation of your assets among the various investment categories offered under your group program, i.e., guaranteed, balanced, equity, fixed income and specialty.

Asset rebalancing
Day-to-day market fluctuations can cause your asset allocation to change, and as a result your allocation may become either more conservative or more aggressive than your target investment mix. Asset rebalancing allows you to buy or sell (i.e. rebalance) units of funds so as to align your assets as closely as possible with your investment mix. Asset rebalancing is subject to the Policy and procedure with respect to excessive trading.

Assuris
Assuris is a not for profit organization that protects Canadian policyholders in the event that their life insurance company should become insolvent. Its role is to protect policyholders by minimizing loss of benefits and ensuring a quick transfer of their policies to a solvent company where their benefits will continue to be honoured. For more information, please refer to their site at www.assuris.ca. Manulife is a member of Assuris.

B

Balanced Fund
Invests in a mix of Canadian and foreign equities, bonds and short-term investments whereby the fund manager adjusts the percentage held in each category depending on market conditions. The goal is to produce strong performance with moderate risk by combining the superior long-term growth potential of equities with the steady income of bonds.

Benchmark
Performance of a predetermined set of securities used for comparison purposes. For example, the S&P/TSX (formerly the TSE 300) is often used as the benchmark for measuring Canadian equity fund performance.

Beneficiary Designation
Written declaration by a plan member specifying who is to receive the proceeds from the plan in the event of the member's death.

Blue Chip
Stock of a company that is generally known for its ability to make money, pay dividends and that is financially sound and secure.

BMO-TSX Composite (CAP 10) Index
A Canadian index which measures the performance of the largest companies traded on the Toronto Stock Exchange (TSX), with no company making up more than 10% of the total index.

Bond Fund
Invests primarily in high quality government and corporate bonds and debentures. The focus of the fund is capital protection and maximization of income returns.

Book Value
Original price paid for an investment, plus reinvested income earned.

Bottom-up
Investment style based on the fundamental analysis of companies rather than on macro-economic evaluation.

C

Canada Pension Plan (CPP)
A governmental plan that provides benefits to workers and their families in the event of retirement, disability or death. CPP applies everywhere in Canada, with the exception of Quebec (see QPP).

Compound Interest
Interest is paid on both the original investment and on the interest the investment accumulates.

Compound Interest Accumulator (CIA)
Guaranteed fund with compound interest offered in a Manulife group plan.

Consumer Price Index (CPI)
A statistical device that measures the change in the cost of living for consumers. It is used to illustrate the amount of inflation that has taken place.

D

Daily Interest Accumulator (DIA)
Short-term fund offered in a Manulife group plan, similar to a bank savings account, which earns interest on the daily balance.

Deferred Profit Sharing Plan (DPSP)
Tax-favoured arrangement whereby an employer distributes a portion of pre-tax profits or a percentage of income to designated employees. Employees do not contribute their own funds, but money is accumulated in a tax-sheltered account for them.

Derivative
Financial instrument whose value is based on the value of other financial instruments or the level of a financial index. Futures, options and currency forward contracts are examples of derivatives.

Disinvestment instructions
Instructions that indicate from which investment funds future withdrawals will be made.

Diversification
The spreading of assets among a number of different investment options which are not perfectly positively correlated. Since the assets are not perfectly correlated, losses of any one fund can be offset by gains on other funds.

Diversified Fund
(See Balanced Fund)

Dividend
Portion of a company's profits that is paid to shareholders.

Dollar Cost Averaging
Investing fixed dollar amounts on a regular basis. Due to market fluctuations, the same amount will buy more units when the prices are low and fewer units when prices are high. The net result is that it can reduce the average cost of the units purchased.

E

Earned income
Generally the money made by the individual from employment. Earned income is used as a basis for calculating RRSP maximum contribution limits.

Equity Fund
Invests in stock market instruments offering greater return potential than guaranteed or fixed income funds but with more volatility.

F

Fixed Income Fund
Invests in debt instruments issued by corporations, governments or government agencies. The objective is to provide attractive interest returns with lower volatility.

Foreign investments
Securities issued by non-Canadian companies.

G

Gross rate of return
Rate of return of a portfolio before deducting the investment management fees.

Group RRSP
Registered retirement savings plan (RRSP) administered by organizations so employees may delay paying current income taxes while saving for retirement.

Guaranteed Term Fund
Term deposit, or GIC-type instrument, which fully guarantees interest and the return of capital at maturity.

H

Home Buyers' Plan (HBP)
HBP lets you withdraw up to $25,000 from your RRSPs to buy or build a qualifying home for yourself, a related disabled person, or to help such a person buy or build a qualifying home. Normally you have a period of up to 15 years to repay your RRSP withdrawals. Refer to the HBP Guide in the Helpful information section.

I

Income splitting
A method of contributing on behalf of your spouse, whereby you can reduce your combined taxes after retirement. If your spouse is in a lower income tax bracket, the retirement income received in your spouse’s name will be taxed at your spouse’s lower rate.

Index
A statistical tool that measures the performance of a security market or economy, based on the performance of a group of securities that represent a particular portion of that market or economy. Each index has its own calculation methods, usually expressed as a percentage change from the base value.

Index Fund
A fund which provides the investor with the opportunity to participate in the return of a broad selection of investment securities. The fund aims to generate a return, which closely tracks the performance of a specified securities index.

Inflation
The term used to describe rising prices of goods and services within an economy, usually measured as the annualized increase in the Consumer Price Index (CPI).

Interfund transfer
A transfer of assets from your current investment fund(s) to other fund(s) available under your group program.

Investment instructions
Allocation of your contributions (new deposits) among the various investment funds offered under your group program.

Investment Management Fee (IMF)
The IMF is collected by the fund manager to coer investment management and administrative costs and is deducted from the fund before calculation of unit values.

Investment Property Databank (IPD) Index
An index which measures the returns of commercial properties in Canada.

L

Life Income Fund (LIF)
A type of RRIF, subject to pension legislation, under which the owner of the LIF must withdraw, each year, a minimum amount up to a maximum amount as prescribed by pension legislation.

Lifelong Learning Plan (LLP)
Lets you make withdrawals from your RRSP to finance training or education for you, your spouse or common-law partner. You have to repay these withdrawals over a period of no more than 10 years. Refer to the LLP Guide in the Helpful information section.

Limited Liquidity funds
Limited liquidity funds are funds that are restricted from rebalancing (the funds will be increased but not decreased ) during a rebalancing whether systematic or ad hoc because of the nature of their assets (such as real estate funds or mortgage funds). However, a withdrawal or inter-fund transfer can be made with no additional restrictions. Limited Liquidity Funds are identified by a numbered note in the transactional pages.

Liquidity
The ease with which an asset can be quickly bought or sold without adversely affecting its price.

Locked-in Funds
These are funds originating from a pension plan which cannot be cashed-out and must be used at retirement to provide a lifetime retirement income.

Locked-in RRSP
A type of RRSP where the funds are subject to pension legislation. These funds must be used to purchase a life annuity or be transferred to a LIF by the end of the year during which the owner of the Locked-In RRSP reaches age 71, at the latest.

M

Market-related Funds
Invest in publicly traded securities such as stocks, bonds and money-market instruments. Unit values are not guaranteed and fluctuate with movements in the price of the securities held in the portfolio.

Market value
The value at a particular date, assuming the investment is being sold.

Market Value Adjustment (MVA)
Applied to a guaranteed term fund if it is withdrawn before maturity. The MVA is based on interest rate changes that have occurred since the fund was purchased.

Maturity date
The date a certificate or bond matures.

Money Market Fund
Invests in short-term debt securities maturing in one year or less and is generally the least risky of the market-related funds.

Morgan Stanley Capital International (MSCI) Emerging Markets Index
A free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

Morgan Stanley Capital International (MSCI) Europe Australasia and Far East (EAFE) Index
An international equity index consisting of approximately 1,000 securities from 21 countries, excluding the United States and Canada.

Morgan Stanley Capital International (MSCI) World Index
A global index which measures the performance of the stock markets in the United States, Europe, Canada, Australia, New Zealand and the Far East. The index consists of close to 2,000 securities from 23 countries.

Mortgage Fund
Invests in commercial and industrial mortgages, diversified by type and location. While less liquid than many other fixed income funds, this fund offers the potential for superior long-term returns.

N

Nesbitt Burns Small Cap Index and S&P/TSX Small Cap Index
Canadian indices which measure the performance of smaller capitalized companies. In Canada, companies with a market capitalization of less than 0.1% of the total Toronto Stock Exchange market capitalization are generally considered as small cap companies. The Nesbitt Burns Small Cap Index comprises some 400 small capitalization Canadian companies.

Net Rate of Return
Return of a fund after investment management fees have been deducted.

Non-registered Funds
Deposits made with after-tax dollars and not invested in registered tax-sheltered vehicles such as RRSPs. Income earned by the funds is taxed annually even if the investment earnings are not actually withdrawn.

O

Old Age Security (OAS)
A monthly pension paid to Canadians age 65 or over.

Online asset rebalancing (OLR)
This feature offers an alternative to the manual rebalancing of assets by allowing you to perform the operation promptly and easily with one click of a button. OLR is subject to the Policy and procedure with respect to excessive trading. See also Asset rebalancing.

P

Pension adjustment
An amount that reduces the allowable contribution limit to an RRSP based on the benefits earned from the employee’s pension plan or a deferred profit sharing plan.

Pension Adjustment Reversal (PAR)
Amount that re-establishes lost RRSP contribution room for individuals that change jobs or move in and out of the workforce. It is calculated for all members who cease to participate in a Registered Pension Plan or a Deferred Profit Sharing Plan and for whom a benefit was paid before retirement (through a transfer or reimbursement). Refer to the PAR guide in the Helpful information section.

Personalized Rate of Return (PRR)
Represents the performance of your retirement savings over a selected period of time, taking into account the timing of your contributions. The performance of both guaranteed and market-related funds is included in this measure. While the PRR is calculated for each of your accounts and plans, the Consolidated PRR indicates the performance of your total holdings.

Portability
The legislated right to transfer vested and locked-in benefits to another registered retirement plan when the member leaves the employer’s service.

Portfolio
The holdings of securities by an individual or an institution.

Q

Quebec Pension Plan (QPP)
A government plan that provides benefits to workers and their families in the event of retirement, disability or death. QPP applies in Quebec and is similar to the CPP.

R

Rate of return
The investment gains (or losses) that an investor earns from an investment divided by the initial amount invested. This can come from dividends paid on shares, interest paid on bonds, or capital gains or losses due to market appreciation or depreciation.

Real Estate Fund
Invests in income-generating properties such as commercial and industrial buildings. This fund is considered a specialized equity fund requiring a long-term investment approach.

Registered Pension Plan (RPP)
A formal arrangement where an employer contributes to the retirement income of employees.

Registered Retirement Income Fund (RRIF)
Monies accumulated in an RRSP are used to purchase a RRIF that allows flexibility in the amount of money being paid out as retirement income.

Registered Retirement Savings Plan (RRSP)
A registered vehicle that allows investors to defer current income taxes while saving for retirement.

Reinvestment instructions
Instructions that indicate where your maturing guaranteed funds will be reinvested.

Retirement Allowance
Severance package, termination pay, court settlement or award for wrongful dismissal. It may also be a payment by an employer for long service on retirement.

Retirement Income Goal
Your retirement income goal is the amount of pre-retirement income you will need to maintain your lifestyle when you retire.

Risk Tolerance
Investor's ability to handle fluctuations in the value of their portfolio.

Russell 1000® Index
This index, which has been developed and maintained by Frank Russell Company, is comprised of common stocks of companies incorporated in the United States and its territories. This index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index.

S

S&P/TSX Capped Composite Index
A Canadian index which tracks the performance of the largest Canadian stock companies traded on the Toronto Stock Exchange. The index is adjusted quarterly so that no single stock has a relative weight in the index greater than 10%.

S&P/TSX Composite Index
A Canadian index which tracks the performance of the largest Canadian stock companies traded on the Toronto Stock Exchange.

Scotia Capital Markets (SCM) 91-day Treasury Bill Index
An index maintained by Scotia Capital Markets. The index measures the return attributable to 91-day Treasury Bills.

Scotia Capital Markets (SCM) Conventional Residential Mortgage Index
An index which tracks the return of mortgages obtained from a representative sample of major Canadian chartered banks having a 25-year amortization period.

Scotia Capital Markets (SCM) Universe Bond Index
A Canadian index which tracks the performance of all domestic fixed income securities with a credit rating of BBB or above.

Simple Interest
Amount of interest paid out on a term deposit, periodically or at the end of the term.

Standard & Poor’s 500 Index
A US index which tracks a representative sample of 500 large US companies traded on the New York and American Stock Exchanges.

Stock
Equity in a corporation. When one invests in a stock, one is buying a share of the company.

Spousal RRSP
An RRSP owned by one spouse, but with contributions (and tax deductions) linked to the other spouse. Also see Income splitting.

Structured RRSP
Provides a systematic method of allocating employer and plan member contributions in separate accounts under the umbrella of a single registered retirement savings plan.

Systematic Asset Rebalancing (SAR)
Tool used by Manulife that will systematically oversee your plan's assets and ensure they are in line with the strategic allocation. When assets fluctuate over and under the set limit, they will be re-aligned to match your investment instructions.

T

Target Age
Your target age is the age at which you wish to retire or convert your savings into income.

Tax-Free Savings Account (TFSA)
An investment vehicle that allows individuals to save money and benefit from a tax-free environment on the earnings generated and on withdrawals.

Top-Down
Investment style based on the assessment of the economy as a whole rather than by a fundamental analysis of companies.

U

Unit value
The total market value of an investment fund divided by the number of units outstanding.

V

Valuation day
The day at which an investment fund is valued. A fund may be valued daily, weekly or monthly depending on the financial institution and the type of fund.

Vesting
The entitlement of a member to the pension rights prescribed under a retirement plan. This entitlement is often granted after a number of years of plan participation or service with the employer, and sometimes the attainment of a certain age.

Volatility
Describes the amount of market fluctuation witnessed in an investment fund; it also refers to the increased level of risk associated with an investment, especially stock market oriented investments.

WXYZ

Yield
The rate of return on an investment.