Mr. Warren Thomson reports

MANULIFE ASSET MANAGEMENT POSTS CAD$9.9 (US$8.1) BILLION IN NET INSTITUTIONAL SALES GLOBALLY IN FIRST HALF OF 2015

Manulife Asset Management, the investment management arm of Manulife Financial Corp., generated more than $9.9-billion ($8.1-billion (U.S.)) globally in net institutional new sales in the first half of 2015.

Parent company Manulife said in its second quarter 2015 earnings release that assets managed by Manulife Asset Management reached $390-billion ($313-billion (U.S.)) as of June 30, 2015, an increase of $69-billion ($36-billion (U.S.)) from Dec. 31, 2014. Institutional assets managed by Manulife Asset Management reached $64.7-billion ($51.9-billion (U.S.)) as of June 30, 2015, including $7.7-billion ($6.2-billion (U.S.)) related to Standard Life, and in total were 72 per cent higher than a year ago.

"Expanded investment capabilities and solid investment performance drove sales across Manulife Asset Management's global footprint," said Warren A. Thomson, chairman of Manulife Asset Management.

This performance has been recognized. As of June 30, 2015, funds managed by Manulife Asset Management had a total of 101 four- or five-star Morningstar rated funds, an increase of 29 funds since Dec. 31, 2014.

New mandates year-to-date include:

• Large fixed-income mandate from a Canadian client;
• Strategic fixed income mandates with clients in Canada, Japan, South Korea and the United States;
• U.S. core and core plus fixed income mandates with clients in the U.S.;
• An outsourced chief investment officer mandate managed by the investments solutions team and a target derisking fund mandate with clients in Canada;
• Global investment-grade fixed income mandate with a client in the U.S.;
• U.S. large-cap core equity mandate with a client in the U.S.;
• Real estate mandate with a client in Canada;
• Farmland mandate from a major U.S. municipal retirement plan.

"Manulife Asset Management has had a very solid start to the year with an 175-per-cent increase in total net sales in the first and second quarters as compared to the same period last year," said Kai Sotorp, president and chief executive officer, Manulife Asset Management. "We have continued to win mandates across different strategies from clients around the world."

"We continue to grow our private markets business by creating innovative investment solutions for our customers in commercial real estate, private placement debt and commercial mortgages," said Kevin Adolphe, president and CEO, Manulife Asset Management Private Markets.

Completed acquisition of Standard Life Investments in Canada

On Jan. 30, 2015, Manulife successfully closed the acquisition of the Canada-based operations of Standard Life PLC and commenced the integration process. The transaction increased total Manulife Asset Management assets by $26-billion ($20-billion (U.S.)) as of Jan. 30, 2015.

As a result of this acquisition, Manulife Asset Management significantly expanded its capabilities, including liability driven investing (LDI) and real estate. The combination of the two firms meant that clients gained access to new expertise and an array of new products in addition to Manulife Asset Management's existing strengths in asset allocation solutions.

Manulife launched two new LDI funds in June -- the Manulife Asset Management Short-Term Liability Corporate Bond Pooled Fund and the Manulife Asset Management Mid-Term Liability Corporate Bond Pooled Fund. These funds were added to an existing family of LDI pooled funds to provide Canadian institutional clients with more flexibility in setting their credit exposure, while minimizing the interest rate risk relative to their liabilities.

Senior appointments

In the first half of 2015, Manulife Asset Management announced the following:

• Michael Dommermuth was named head of wealth and asset management, Asia, bringing the company's Asian wealth and asset management divisions together under one umbrella.
• Roger Renaud was named president, Manulife Asset Management, Canada. He leads the development and implementation of Manulife's asset management strategy and business in Canada, growing and expanding this important market.
• Endre Pedersen was named chief investment officer, fixed income, Asia (ex-Japan), demonstrating the company's continued commitment to the Asian fixed income market.
• Bill Peressini assumed the role of president of the Hancock Natural Resource Group (HNRG), previously held by Dan Christensen who will remain as CEO. He and Mr. Peressini will jointly lead HNRG moving forward.
• Claude Chene was appointed as global head of distribution, responsible for creating the distribution vision and strategy, overseeing sales, and relationship management activity for Manulife Asset Management on a global basis, and leading our institutional and wholesale expansion into Europe, Middle East and Latin American markets.
• Ken Pogrin was named global head of business development and chief operating officer, Manulife Asset Management Private Markets. He will oversee the strategic rollout of the private markets business, direct product development across all asset classes, and lead merger and acquisition activities.
• Sahezad Pardhan was named global chief financial officer, Manulife Asset Management Private Markets. He will be accountable for completing the design, development and implementation of a world-class finance function to support the growth of private markets.
• Jenn Lundmark was named global head of real estate fundraising, Manulife Asset Management Private Markets, and will direct a full range of activities related to the raising of real estate equity capital.

Thought leadership

In the report "Dealing with divergence: How investors can position themselves to navigate a fork in global monetary policy," chief economist Megan Greene examined how monetary policy divergence is driving volatility in local asset values in markets around the world and how investors should prepare.

Kathryn Langridge, head of emerging markets equities, and Paolo Valle, co-head of emerging markets debt co-authored "The Changing Shape of Capital Markets in Emerging Economies." They suggested capital markets in emerging economies have remained significantly underdeveloped relative to their underlying economies, but will likely experience profound shifts over the next 15 years, with implications for debt and equity investors.

In Asia, Manulife Asset Management launched its sixth report in the aging Asia research series in early June. Entitled "One step forward, half a step back: Meeting financial goals in Asia," the report found that a preference for holding cash does not only complicate saving for retirement, it is also the culprit of potential investment return shortfalls.

Funds managed by Manulife Asset Management may be distributed by certain of its affiliates. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar risk-adjusted return that accounts for variation in a fund's monthly performance (including effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10 per cent of funds in each category, the next 22.5 per cent, 35 per cent, 22.5 per cent and bottom 10 per cent receive five stars, four stars, three stars, two stars or one star, respectively. The overall morningstar rating for a fund is derived from a weighted average of the performance associated with its three-, five- and 10-year (if applicable) Morningstar rating metrics. Past performance is no guarantee of future results. The overall rating includes the effects of sales charges, loads and redemption fees, while the load waived does not. Load-waived rating for Class A shares should only be considered by investors who are not subject to a front-end sales charge.