To achieve your retirement savings goals you need to choose investment instructions that are consistent with your investor profile and investment period by:

• determining the length of time you have for your savings to accumulate (your investment period);
• identifying your savings goals; and,
• knowing your comfort level for risk (your investor profile).

Day-to-day market fluctuations will cause your asset mix (your current holdings) to change, as a result your asset mix may then become either more conservative or more aggressive than your investment instructions.

Traditionally, to maintain their investment instructions, investors had to monitor and manually rebalance their assets. Manual rebalancing of assets required investors to perform calculations, and then request interfund transfers; this process could be time-consuming and complicated.

Systematic Asset Rebalancing (SAR) is an automatic process by which Manulife will periodically rebalance your assets to ensure that they are as close to your investment instructions as possible.

Is SAR Consistent with Dollar Cost Averaging?

Which of my funds are rebalanced?

Is SAR applied on an account basis?

How do I activate SAR?

Can SAR be activated or deactivated at any time?

How often are my assets rebalanced?

Can I change my investment mix instructions once SAR is activated?

For which of my plans is SAR available?

Is SAR performed regardless of the amount being adjusted?

Can I request an interfund transfer when SAR is activated?

Are all of my unit holdings sold when a rebalancing is performed?

Should my reinvestment instructions be consistent with my investment instructions?

Will SAR recognize different investment instructions for a specific lump-sum deposit?

How closely will SAR align my funds with my investment instructions?

 Is SAR consistent with Dollar Cost Averaging?

Yes. Dollar Cost Averaging involves 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). SAR complements Dollar Cost Averaging by maintaining a disciplined approach to investing.

 Which of my funds are rebalanced?

Market-related funds (including Daily Interest Accumulator (DIA)) as well as guaranteed funds will be included in the rebalancing. Please note that guaranteed funds may be purchased through rebalancing, but will not be sold (doing so could cause an adjustment to the market value of your guaranteed funds). If you wish to move money out of guaranteed funds, you can do so by performing an interfund transfer.

 Is SAR applied on an account basis?

Yes. SAR operates on an account-by-account basis. You may activate SAR for one or more of your accounts, but SAR will only be performed on accounts for which the amount to be rebalanced is at least $300.

 How do I activate SAR?

The investment instructions » summary » change page in the Manage your plans section will allow you to activate or deactivate SAR on your account. Please ensure that you complete your request by clicking the 'Submit' button.

 Can SAR be activated or deactivated at any time?

Yes. SAR can be activated or deactivated at any time.

 How often are my assets rebalanced?

For most plans SAR is performed once per quarter. However, for some plans, SAR will run according to your statement frequency (e.g. annually/quarterly/semi-annually).

 Can I change my investment mix instructions once SAR is activated?

You can make a change to your investment instructions and your reinvestment instructions (for guaranteed funds) at any time. When you choose your investment instructions, you do so based on your comfort level for risk and the time remaining before you need to convert your savings into income. These factors change over time, however; a mix that suits a moderate 25-year old investor probably won’t suit that same moderate investor at age 45. As you get older, you should adjust your investment instructions to reflect the fact that your comfort level for risk will probably decrease to a certain extent.

  For which of my plans is SAR available?

SAR is available for all registered plans (due to their tax-sheltered nature). SAR is not available for non-registered plans due to capital gains implications when selling market-related funds. If you wish to change the asset mix in a non-registered plan, you may perform an interfund transfer, but be sure to consider any potential tax implications resulting from a capital gain.

 Is SAR performed regardless of the amount being adjusted?

SAR will be performed for minimum rebalancing amounts of $300 (by account, for all funds affected).

 Can I request an interfund transfer when SAR is activated?

Yes. However, if you request an interfund transfer just prior to SAR being performed, SAR may undo the results of the interfund transfer.

 Are all of my unit holdings sold when a rebalancing is performed?

Only the exact amounts required to perform the rebalancing are sold. [Recall that guaranteed funds will not be sold as part of a rebalancing.]

 Should my reinvestment instructions be consistent with my investment instructions?

If your reinvestment instructions are set to reinvest entirely into guaranteed funds, SAR will maintain your asset allocation goals. However, if your reinvestment instructions are different, this may impact on the value-added feature of SAR. For this reason, it is advised to choose reinvestment instructions that are consistent with your asset allocation goals.

 Will SAR recognize different investment instructions for a specific lump-sum deposit?

Once SAR is activated on an account, it will treat the entire account balance in the same fashion.

  How closely will SAR align my funds with my investment instructions?

As shown in Example B below, SAR does not imply that after rebalancing the percentage held in each market-related fund will be identical to that specified in the investment instructions (this is because guaranteed funds may be a part of your mix). However, SAR enables you to hold each market-related fund in the desired proportion relative to the total of market-related funds.

Example A, where only market-related funds are held; rebalancing will perfectly align the funds with the investment instructions.

Current Asset Mix			Investment Instructions	Rebalancing Results
Fund	Market Value	Asset Mix		Amount Transferred	Market Value	Final Mix
Diversified	$2,910	32%	47%	$1,415	$4,325	47%
CDN Equity	$2,798	30%	33%	$239	$3,037	33%
US Equity	$3,495	38%	20%	($1,654)	$1,841	20%
Total	$9,203	100%	100%		$9,203	100%

Example B, where market-related funds and guaranteed funds are held; rebalancing will come as close as possible to (although not necessarily reach) the investment instructions, since guaranteed funds cannot be sold through rebalancing.

Current Asset Mix			Investment Instructions	Rebalancing Results
Fund	Market Value	Asset Mix		Amount Transferred	Market Value	Final Mix
Compound Interest - 1 year	$12,542.88	41%	35%	$0	$12,542.88	41%
Compound Interest - 3 years	$8,747.44	28%	-	$0	$8,747.44	28%
Daily Interest Accumulator	$3,939.08	13%	-	($3,939.08)	$0	0%
Bond	$5,502.42	18%	-	($5,502.42)	$0	0%
Diversified	$0	-	30%	$4,046.36	$4,046.36	13%
CDN Equity	$0	-	40%	$5,395.14	$5,395.14	18%
Total	$30,731.82	100%	100%		$30,731.82	100%
Assets Rebalanced	$9,441.50		70%

How is the asset rebalancing calculated?

(total assets to be rebalanced) x (fund's investment instruction)

(Percentage of funds in investment instructions that is eligible for rebalancing)

For example, the CDN Equity fund is rebalanced as follows:

$ 9, 441.50 x 40%	= $ 5, 395.14
70%

Should you require any further explanation on rebalancing, please contact one of our Member Services representatives at 1-800-242-1704.