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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: IAG stock has recently taken more of a hit than I believe can be explained by interest rate sensitivity alone. There was news last week of a potential liability for IAG and MFC re predecessor companies and investments in "side accounts". Why then has IAG stock been hit so much harder than MFC? I hold SLF as well and it remains solid. Unfortunately I hold IAG, MFC and SLF in a ratio of 2:2:1 with the total of all three making up about 7% of total investment portfolio. Would you recommend any adjustments here?
Read Answer Asked by Gordon on February 27, 2018
Q: Hi, could I have your opinion on the statements below as they pertain to MFC. Should I be worried?
Thanks

Market Chatter: Side Accounts Could Bring Two of Canada's Life Insurance Giants To Their Knees; IAG and Manulife Cited
23 Feb 2018 10:12 ET

10:12 AM EST, 02/23/2018 (MT Newswires) -- In an era of higher interest rates in the late 1990s, two predecessor companies of Industrial Alliance Insurance and Financial Services Inc. (IAG.TO) and Manulife Financial Corp. (MFC.TO) issued life insurance policies that allowed holders to invest in side accounts that guaranteed rates of up to 5% and 4%, respectively, George Lewis has written in a Special Report published on the Financial Post's website.

According to Lewis, "these side accounts did not contain an explicit limit on the size of investment, which means in today's low-rate environment they are potentially lucrative for their holders and a significant liability for the companies that wrote them."

He added: "At least three limited partnerships purchased such policies several years ago in Saskatchewan, one of only four Canadian provinces that permit the purchase of insurance policies from their original holders. These investors are in court in Saskatoon to force the insurers to accept their money."



Read Answer Asked by Valdis on February 27, 2018
Q: Morning..just looking to rebalance...my financial weighting is 22% of portfolio (BNS 4.6, SLF 4.4, Tricon 3.8, G&S 3.4, TD 3.2 and ECN 2.2%)...was thinking of selling Tricon and ECN ...I am down on both also G&S..but like the dividend for G&S...any thoughts...

thanks
Read Answer Asked by Matthew on February 26, 2018
Q: Hi,
After the recent correction, US banks recovered (JPM, GS, C, BAC) but other finance sector stocks did not (AMP, MFC, AIG). Will future interest rate hikes will not benefit annuity business? At this pull back could AMP:N a good buy if I have some funds in RRSP to invest this year? I do hold TD:T and USB:N and MFC:T.
Thanks
Read Answer Asked by Piyush on February 26, 2018
Q: Could you please name a couple US regional banks you might recommend. I already own Comerica and can you give your opinion on CMA. Thanks.
Read Answer Asked by Bruce on February 15, 2018
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