Simplified Prospectus
Manulife Mutual Funds and Manulife Private Investment Pools
July 31, 2015
(OFFERING ADVISOR SERIES, SERIES B, SERIES C, SERIES CT6, SERIES D, SERIES F, SERIES FT5, SERIES FT6, SERIES FT8, SERIES I, SERIES L, SERIES LT6, SERIES N, SERIES T5, SERIES T6 AND SERIES T8 SECURITIES AS INDICATED)
EQUITY FUNDS Canadian Equity
Manulife Canadian Focused Class*1,5,6,8,10,15
Manulife Canadian Focused Fund1,6,8,10,15
Manulife Canadian Investment Class*1,6,8,10,15
Manulife Canadian Investment Fund10
Manulife Canadian Opportunities Class*1,5,6,8,10,15
Manulife Canadian Opportunities Fund1,6,8,10,15
Manulife Canadian Stock Class*1,6,8,10,15
Manulife Canadian Stock Fund1,6,8,10,15
Manulife Dividend Income Class*1,6,8,10,15
Manulife Dividend Income Fund1,5,6,8,10,15
Manulife Growth Opportunities Class*1,6,8,10,15
Manulife Growth Opportunities Fund1,6,8,10,15 Preferred Share
Manulife Preferred Income Class*1,6,8,10,15 U.S. Equity
Manulife Special Opportunities Class*1,6,10
Manulife U.S. All Cap Equity Class*1,6,8,10,15
Manulife U.S. All Cap Equity Fund1,5,6,8,10,15
Manulife U.S. Dividend Class*1,6,8,10,15
Manulife U.S. Dividend Registered Fund1,6,10
Manulife U.S. Dollar U.S. All Cap Equity Fund1,6,8,10,15
Manulife U.S. Equity Fund1,6,8,10,15
Manulife U.S. Large Cap Equity Class*1,6,8,10,15
Manulife U.S. Large Cap Equity Fund1,6,8,10,15
Manulife U.S. Opportunities Class*1,6,8,10,15
Manulife U.S. Opportunities Fund1,6,8,10,15
Manulife Value Fund1,6,10
Global & International Equity Manulife Global All Cap Focused Fund1,6,8,10,15
Manulife Global Dividend Class*1,6,8,10,15
Manulife Global Dividend Fund1,5,6,8,10,15
Manulife Global Equity Class*1,6,8,10,15
Manulife Global Focused Class*1,6,8,10,15
Manulife Global Focused Fund1,6,8,10,15
Manulife Global Small Cap Fund1,6,8,10,15
Manulife International Focused Fund1,6,8,10,15
Manulife International Value Equity Fund1,6,8,10,15
Manulife World Investment Class*1,6,8,10,15
Manulife World Investment Fund1,6,8,10,15 Specialty Equity
Manulife Asia Equity Class*1,6,10
Manulife China Class*1,6,10
Manulife Global Infrastructure Class*1,6,8,10,15
Manulife Global Infrastructure Fund1,5,6,8,10,15
Manulife Global Real Estate Class*1,6,10
Manulife Global Real Estate Fund1,5,6,10
BALANCED FUNDS Canadian Balanced
Manulife Canadian Balanced Fund1,6,8,10,15
Manulife Canadian Conservative Balanced Fund1,6,8,10,15
Manulife Canadian Equity Balanced Class*1,6,8,10,15
Manulife Canadian Opportunities Balanced Class*1,6,8,10,15
Manulife Canadian Opportunities Balanced Fund1,6,8,10,15
Manulife Monthly High Income Class*1,6,8,10,15
Manulife Monthly High Income Fund1,2,6,8,10,15
*Shares of Manulife Investment Exchange Funds Corp.
1 Offering Advisor
Series securities
2 Offering Series B securities 3 Offering Series C securities 4 Offering Series CT6 securities
5Offering Series D securities 6Offering Series F securities 7Offering Series FT5 securities 8Offering Series FT6 securities 9Offering Series FT8 securities
10Offering Series I securities 11Offering Series L securities 12Offering Series LT6 securities 13Offering Series N securities
U.S. Balanced
Manulife Strategic Balanced Yield Fund1,5,6,8,10,15
Manulife U.S. Dollar Strategic Balanced Yield Fund1,5,6,8,10,15
Manulife U.S. Monthly High Income Fund1,5,6,8,10,15 Global Balanced
Manulife Diversified Income Portfolio1,6,8,10,15
Manulife Diversified Investment Fund1,6,8,10,15
Manulife Diversified Strategies Fund1,6,8,10,15
Manulife Global Balanced Fund1,6,8,10,15
Manulife Global Focused Balanced Fund1,6,8,10,15
Manulife Global Small Cap Balanced Fund1,6,8,10,15
Manulife Global Strategic Balanced Yield Fund1,5,6,8,10,15
Manulife Strategic Dividend Bundle1,6,8,10,15
Manulife Value Balanced Class*1,6,8,10,15
Manulife Value Balanced Fund1,6,8,10,15
Manulife Yield Opportunities Fund1,5,6,8,10,15
FIXED INCOME FUNDS Money Market & Short-Term Fixed Income
Manulife Dollar-Cost Averaging Fund1
Manulife Money Fund1,6,10,13
Manulife Short Term Bond Fund1,6,10
Manulife Short Term Yield Class*1,6,10 Canadian Fixed Income Manulife Bond Fund1,6,8,10,15
Manulife Canadian Bond Plus Fund1,5,6,10
Manulife Corporate Bond Fund1,5,6,8,10,15 U.S. Fixed Income
Manulife Floating Rate Income Fund1,5,6,8,10,15
Manulife High Yield Bond Fund1,5,6,8,10,15
Manulife U.S. Dollar Floating Rate Income Fund1,5,6,8,10,15
Manulife U.S. Tactical Credit Fund1,5,6,8,10,15 Global & International Fixed Income Manulife Asia Total Return Bond Fund1,5,6,8,10,15
Manulife Emerging Markets Debt Fund1,6,8,10,15
Manulife Global Tactical Credit Fund1,5,6,8,10,15
Manulife Strategic Income Fund1,5,6,8,10,15
Manulife Strategic Investment Grade Global Bond Fund1,6,8,10,15
Manulife U.S. Dollar Strategic Income Fund1,6,8,10,15
MANAGED SOLUTIONS
Manulife Simplicity Conservative Portfolio1,6,7,10,14
Manulife Simplicity Moderate Portfolio1,6,8,10,15
Manulife Simplicity Balanced Portfolio1,6,8,10,15
Manulife Simplicity Global Balanced Portfolio1,6,8,10,15
Manulife Simplicity Growth Portfolio1,6,9,10,16
Manulife Leaders Balanced Income Portfolio1,6,7,10,14
Manulife Leaders Balanced Growth Portfolio1,6,8,10,15
Manulife Leaders Opportunities Portfolio1,6,8,10,15
Manulife Global Managed Volatility Portfolio10
MANULIFE PRIVATE INVESTMENT POOLS Equity Private Pools
Manulife Canadian Equity Private Pool*1,3,4,6,8,11,12,15
Manulife Dividend Income Private Pool*1,3,4,6,8,11,12,15
Manulife Global Equity Private Pool*1,3,4,6,8,11,12,15
Manulife U.S. Equity Private Pool*1,3,4,6,8,11,12,15 Balanced Private Pools
Manulife Balanced Equity Private Pool*1,3,4,6,8,11,12,15
Manulife Balanced Income Private Trust1,3,4,6,8,11,12,15
Manulife Canadian Balanced Private Pool*1,3,4,6,8,11,12,15
Manulife Canadian Growth and Income Private Trust1,3,4,6,8,11,12,15
Manulife Global Balanced Private Trust1,3,4,6,8,11,12,15
Manulife U.S. Balanced Private Trust1,3,4,6,8,11,12,15
Manulife U.S. Balanced Value Private Trust1,3,4,6,8,11,12,15 Fixed Income Private Pools
Manulife Canadian Fixed Income Private Trust1,3,4,6,8,11,12,15
Manulife Corporate Fixed Income Private Trust1,3,4,6,8,11,12,15
Manulife Global Fixed Income Private Trust1,3,4,6,8,11,12,15
Manulife Money Market Private Trust1,3,6
Manulife U.S. Fixed Income Private Trust1,3,4,6,8,11,12,15
* Shares of Manulife Investment Exchange Funds Corp.
1 Offering Advisor
Series securities
2 Offering Series B securities 3 Offering Series C securities
5Offering Series D securities 6Offering Series F securities 7Offering Series FT5 securities 8Offering Series FT6 securities
10Offering Series I securities 11Offering Series L securities 12Offering Series LT6 securities 13Offering Series N securities
INTRODUCTION 2 WHAT IS A MUTUAL FUND AND WHAT
ARE THE RISKS OF INVESTING IN A
MUTUAL FUND? 4
What is a Mutual Fund? 4
General Risks Common to All
Mutual Funds 5
Specific Risks That Apply to One or More
Mutual Funds 5
ORGANIZATION AND MANAGEMENT DETAILS OF THE MANULIFE MUTUAL FUNDS AND MANULIFE PRIVATE
INVESTMENT POOLS 15 PURCHASES, SWITCHES AND REDEMPTIONS 18 Buying Securities 20 Switching Securities 26 Redeeming Securities 28 Short-Term Trading 32 OPTIONAL SERVICES 34
FEES AND EXPENSES 38
DEALER COMPENSATION 52
DEALER COMPENSATION FROM
MANAGEMENT FEES 56
INCOME TAX CONSIDERATIONS FOR
INVESTORS 56
The Funds 56
Manulife Funds 57
Manulife Corporate Classes 57 For Funds Held in a Non-Registered
Account 58
For Funds Held in a Registered Plan 60
Management fees 61
WHAT ARE YOUR LEGAL RIGHTS? 61
ADDITIONAL INFORMATION 61
GLOSSARY 63
SPECIFIC INFORMATION ABOUT EACH OF THE FUNDS DESCRIBED IN THIS
DOCUMENT 66
FUND SPECIFIC INFORMATION MANULIFE MUTUAL FUNDS EQUITY FUNDS
CANADIAN EQUITY
Manulife Canadian Focused Class 70 Manulife Canadian Focused Fund 73 Manulife Canadian Investment Class 76 Manulife Canadian Investment Fund 80 Manulife Canadian Opportunities Class 82 Manulife Canadian Opportunities Fund 85 Manulife Canadian Stock Class 88 Manulife Canadian Stock Fund 92 Manulife Dividend Income Class 95 Manulife Dividend Income Fund 99 Manulife Growth Opportunities Class 103 Manulife Growth Opportunities Fund 106
PREFERRED SHARE
Manulife Preferred Income Class 109
U.S. EQUITY
Manulife Special Opportunities Class 113 Manulife U.S. All Cap Equity Class 116 Manulife U.S. All Cap Equity Fund 120 Manulife U.S. Dividend Class 124 Manulife U.S. Dividend Registered Fund 128 Manulife U.S. Dollar U.S. All Cap
Equity Fund 131
Manulife U.S. Equity Fund 134
Manulife U.S. Large Cap Equity Class 137 Manulife U.S. Large Cap Equity Fund 141 Manulife U.S. Opportunities Class 144 Manulife U.S. Opportunities Fund 148
Manulife Value Fund 152
GLOBAL & INTERNATIONAL EQUITY
Manulife Global All Cap Focused Fund 154 Manulife Global Dividend Class 157 Manulife Global Dividend Fund 161 Manulife Global Equity Class 165 Manulife Global Focused Class 168 Manulife Global Focused Fund 172 Manulife Global Small Cap Fund 175 Manulife International Focused Fund 178 Manulife International Value Equity Fund 181 Manulife World Investment Class 185 Manulife World Investment Fund 188
SPECIALTY EQUITY
Manulife Asia Equity Class 191
Manulife China Class 194
Manulife Global Infrastructure Class 197 Manulife Global Infrastructure Fund 201 Manulife Global Real Estate Class 205 Manulife Global Real Estate Fund 208
BALANCED FUNDS
CANADIAN BALANCED
Manulife Canadian Balanced Fund 211 Manulife Canadian Conservative
Balanced Fund 215
Manulife Canadian Equity Balanced Class 219 Manulife Canadian Opportunities
Balanced Class 223
Manulife Canadian Opportunities
Balanced Fund 227
Manulife Monthly High Income Class 231 Manulife Monthly High Income Fund 234
U.S. BALANCED
Manulife Strategic Balanced Yield Fund 238 Manulife U.S. Dollar Strategic Balanced
Yield Fund 242
Manulife U.S. Monthly High Income Fund 246
GLOBAL BALANCED
Manulife Diversified Income Portfolio 250 Manulife Diversified Investment Fund 255 Manulife Diversified Strategies Fund 259 Manulife Global Balanced Fund 263 Manulife Global Focused Balanced Fund 267 Manulife Global Small Cap Balanced Fund 271 Manulife Global Strategic Balanced
Yield Fund 275
Manulife Strategic Dividend Bundle 279 Manulife Value Balanced Class 282 Manulife Value Balanced Fund 286 Manulife Yield Opportunities Fund 290
FIXED INCOME FUNDS
MONEY MARKET & SHORT-TERM FIXED INCOME
Manulife Dollar-Cost Averaging Fund 294
Manulife Money Fund 296
Manulife Short Term Bond Fund 298 Manulife Short Term Yield Class 301
CANADIAN FIXED INCOME
Manulife Bond Fund 304
Manulife Canadian Bond Plus Fund 308 Manulife Corporate Bond Fund 311
U.S. FIXED INCOME
Manulife Floating Rate Income Fund 315 Manulife High Yield Bond Fund 319 Manulife U.S. Dollar Floating Rate
Income Fund 323
GLOBAL & INTERNATIONAL FIXED INCOME Manulife Asia Total Return Bond Fund 331 Manulife Emerging Markets Debt Fund 335 Manulife Global Tactical Credit Fund 339 Manulife Strategic Income Fund 344 Manulife Strategic Investment Grade Global
Bond Fund 348
Manulife U.S. Dollar Strategic Income Fund 351
MANAGED SOLUTIONS
Manulife Simplicity Conservative Portfolio 354 Manulife Simplicity Moderate Portfolio 358 Manulife Simplicity Balanced Portfolio 363 Manulife Simplicity Global
Balanced Portfolio 367
Manulife Simplicity Growth Portfolio 372 Manulife Leaders Balanced Income Portfolio 376 Manulife Leaders Balanced
Growth Portfolio 380
Manulife Leaders Opportunities Portfolio 384 Manulife Global Managed
Volatility Portfolio 388
MANULIFE PRIVATE INVESTMENT POOLS
EQUITY PRIVATE POOLS
Manulife Canadian Equity Private Pool 391 Manulife Dividend Income Private Pool 394 Manulife Global Equity Private Pool 398 Manulife U.S. Equity Private Pool 402
BALANCED PRIVATE POOLS
Manulife Balanced Equity Private Pool 406 Manulife Balanced Income Private Trust 410 Manulife Canadian Balanced Private Pool 414 Manulife Canadian Growth and Income
Private Trust 418
Manulife Global Balanced Private Trust 422 Manulife U.S. Balanced Private Trust 426 Manulife U.S. Balanced Value Private Trust 431
FIXED INCOME PRIVATE POOLS Manulife Canadian Fixed Income
Private Trust 435
Manulife Corporate Fixed Income
Private Trust 439
Introduction
In this document, as the context requires: 䡲Advisor Series refers to the Advisor Series securities of one or more Funds
䡲Amalgamation refers to the amalgamation, effective July 1, 2015, of MAML and Standard Life Mutual Funds Ltd., the manager of the mutual funds comprising the Standard Life Mutual Funds, each of which is offered under a separate simplified prospectus dated October 30, 2014, as amended. As a result of the Amalgamation, the amalgamated corporation, MAML, is the manager of the Funds and the Standard Life Mutual Funds.
䡲Class Pool or Class Pools refers to one or more of the following Funds that are each a separate class of mutual fund shares of MIX Corp.; namely, Manulife Canadian Equity Private Pool, Manulife Dividend Income Private Pool, Manulife Global Equity Private Pool, Manulife U.S. Equity Private Pool, Manulife Canadian Balanced Private Pool and Manulife Balanced Equity Private Pool, each of which is offered under this simplified prospectus 䡲dealer refers to both the dealer and the representative registered in your province or territory who advises you on your investments 䡲Exempt Purchaser refers to an investor who is an “accredited investor” or who is otherwise exempt from the prospectus requirements pursuant to National Instrument 45-106 –
Prospectus Exemptions
䡲Fund or Funds refers to the mutual funds offered under this simplified prospectus
䡲IRC refers to the Independent Review Committee of the Funds
䡲MAMII refers to Manulife Asset Management Investments Inc.
䡲MAML refers to Manulife Asset Management Limited
䡲Manulife Bank refers to Manulife Bank of Canada 䡲Manulife Corporate Class or Manulife Corporate Classes refers to one or more Funds that are each a separate class of mutual fund shares of MIX Corp., including the Class Pools
䡲Manulife refers to Manulife Financial Corporation 䡲Manulife Fund or Manulife Funds refers to one or more Funds which are trust funds with MAML as
Trustee, including the Trust Pools and Manulife Managed Solutions
䡲Manulife Managed Solution or Manulife Managed Solutions refers to one or more of the asset allocation Funds, namely, Manulife Global Managed Volatility Portfolio, Manulife Simplicity Conservative Portfolio, Manulife Simplicity Moderate Portfolio, Manulife Simplicity Balanced Portfolio, Manulife Simplicity Global Balanced Portfolio, Manulife Simplicity Growth Portfolio, Manulife Leaders Balanced Income Portfolio, Manulife Leaders Balanced Growth Portfolio and Manulife Leaders Opportunities Portfolio, each of which is offered under this simplified prospectus 䡲Manulife Investments, we, us, Manager or our, refers to Manulife Investments, a division of MAML 䡲MIX Corp. refers to Manulife Investment
Exchange Funds Corp., a mutual fund corporation 䡲MLI refers to The Manufacturers Life
Insurance Company
䡲NAV refers to the net asset value of a security of a Fund
䡲NI 81-102 refers to National Instrument 81-102 – Investment Funds, as it may be amended from time to time
䡲NI 81-106 refers to National Instrument 81-106 – Investment Fund Continuous Disclosure, as it may be amended from time to time
䡲NI 81-107 refers to National Instrument 81-107 – Independent Review Committee for Investment Funds, as it may be amended from time to time 䡲Order Receipt Office refers to the address to which all Client Services, Administration and Processing requests for the Funds should be sent. This address is 500 King Street North, Delivery Station 500 G-B, Waterloo, Ontario, N2J 4C6 䡲PAC Plan refers to a pre-authorized chequing plan administered by MAML or an affiliate
䡲Pool, Pools or Manulife Private Investment Pools refers to one or more of the Class Pools and/or Trust Pools, each of which is offered under this simplified prospectus
Balanced Portfolio, Manulife Simplicity Growth Portfolio, Manulife Diversified Income Portfolio, Manulife Leaders Balanced Income Portfolio, Manulife Leaders Balanced Growth Portfolio and Manulife Leaders Opportunities Portfolio, each of which is offered under this simplified prospectus 䡲Registered Plan refers to each of RESPs, RRSPs (including LIRAs, LRSPs and RLSPs), RRIFs (including LIFs, LRIFs, PRIFs and RLIFs), DPSPs and TFSAs, each acronym as defined under "Optional Services" and RDSPs (collectively, “Registered Plans”). An RDSP is a Registered Disability Savings Plan; however, MAML does not currently offer RDSPs
䡲SEC refers to the U.S. Securities and Exchange Commission, the federal securities regulatory authority in the United States
䡲securities of a Fund refers to units of a Manulife Fund and/or shares of a Manulife Corporate Class 䡲securityholders of a Fund refers to unitholders of a Manulife Fund and/or shareholders of a Manulife Corporate Class
䡲Series refers to both series of shares of a Manulife Corporate Class and classes of units of a
Manulife Fund
䡲Series B refers to the B series of securities of Manulife Monthly High Income Fund
䡲Series C refers to the C series of securities of one or more Funds
䡲Series D refers to the D series of securities of one or more Funds
䡲Series CT6, which may also be referred to as Series CT, refers to the CT6 series of securities of one or more Funds
䡲Series F refers to the F series of securities of one or more Funds
䡲Series FT refers to the FT series of securities of one or more Funds (also referred to as the Series FT5 securities, Series FT6 securities and Series FT8 securities)
䡲Series I refers to the I series of securities of one or more Funds. This series of securities may also be referred to as Elite Series securities
䡲Series L refers to the L series of securities of one or more Funds
䡲Series LT6, which may also be referred to as Series LT, refers to the LT6 series of securities of one or more Funds
䡲Series N refers to the N series of securities of Manulife Money Fund, which were formerly known as Series D securities
䡲Series T refers to the T series of securities of one or more Funds (also referred to as the Series T5 securities, Series T6 securities and
Series T8 securities)
䡲Trust Pool or Trust Pools refers to one or more of the following Funds which are mutual fund trusts with MAML as Trustee; namely, Manulife Balanced Income Private Trust, Manulife Canadian Growth and Income Private Trust, Manulife U.S. Balanced Private Trust, Manulife Global Balanced Private Trust, Manulife Canadian Fixed Income Private Trust, Manulife Corporate Fixed Income Private Trust, Manulife Global Fixed Income Private Trust, Manulife Money Market Private Trust, Manulife U.S. Balanced Value Private Trust and Manulife U.S. Fixed Income Private Trust, each of which is offered under this simplified prospectus
䡲trustee refers to MAML, the trustee of the Manulife Funds
䡲Underlying Fund refers to a fund in which a Fund invests. The Underlying Fund may be a mutual fund managed by us or by another mutual
fund company.
䡲U.S. Dollar Fund refers to any of Manulife U.S. Dollar Floating Rate Income Fund, Manulife U.S. Dollar Strategic Balanced Yield Fund, Manulife U.S. Dollar Strategic Income Fund and Manulife U.S. Dollar U.S. All Cap Equity Fund
This document contains selected important information to help you make an informed investment decision and to help you understand your rights as an investor. It contains information about each of the Funds and the risks of investing in mutual funds generally, as well as the
institutional names of those responsible for the investment management of each Fund.
Additional information about MIX Corp. and each Fund is or will be available in the following
documents:
䡲The most recently filed annual information form (AIF) for the Funds
䡲The most recently filed fund facts of the Funds 䡲The most recently filed annual financial
statements of the Funds
䡲Any interim financial statements of the Funds filed after the annual financial statements 䡲The most recently filed annual management report of fund performance
䡲Any interim management report of fund performance filed after that annual management report of fund performance
These documents are or will be incorporated by reference into this simplified prospectus, which means that they legally form part of this document just as if they were printed as part of this
document. You can obtain a copy of these documents, at your request, and at no cost: 䡲By calling us toll-free at 1 888 588 7999 䡲By faxing us at 416 581 8427 or toll-free at 1-866-581-8427
䡲From your dealer
䡲On our website at manulifemutualfunds.ca 䡲By contacting us
These documents and other information about the Funds are also available at sedar.com.
What is a Mutual Fund and
What Are the Risks of Investing
in a Mutual Fund?
WHAT IS A MUTUAL FUND?
A mutual fund is a pool of money contributed by investors with similar investment goals and
managed by investment professionals. People who contribute money become securityholders of the mutual fund. Securityholders share the mutual fund’s income, expenses, and any gains or losses the mutual fund makes on its investments generally in proportion to the value of the securities
they own.
A mutual fund may be set up either as a mutual fund trust such as a Manulife Fund or as a corporate mutual fund such as a Manulife
Corporate Class. Each Manulife Corporate Class is a separate class of shares of MIX Corp., a mutual fund corporation. Investors contribute to the fund and receive units, in the case of a mutual fund trust, or shares, in the case of a mutual fund corporation. The Manulife Funds are suitable for both taxable accounts and registered plans. Due to the tax deferral benefits of investing in a multi-class mutual fund corporation, the Manulife Corporate Classes are primarily suitable for taxable accounts. The Manulife Managed Solutions are unlike conventional mutual funds that invest in stocks, bonds, cash and/or derivatives or a combination thereof. Each of the Manulife Managed Solutions is a mutual fund that invests primarily in Underlying Funds. These Funds are designed to simplify the investment process by offering a professionally designed and selected mix of Underlying Funds. Each Manulife Managed Solution shares many of the same features as a typical mutual fund, including its own investment objective and
strategies and the same general risks as investing in a typical mutual fund.
Mutual fund investing generally offers four main advantages over individual investing:
䡲Professional full-time investment management, to choose and monitor securities
䡲Diversification – to reduce the risk of ‘putting all your eggs in one basket’
䡲Liquidity – you can buy and sell mutual funds at any time
䡲Convenience – the mutual fund manager does all the record-keeping for you, providing regular reports on your investments and the appropriate tax forms
Mutual funds invest in different securities
Fixed Income Securities
Fixed income securities earn a fixed amount of money, called interest, at regular intervals. A bond is a good example. A 5% bond purchased for $1,000 will pay $50 a year in interest until it matures.
Equities
Equities, also called stocks or shares in a company, may or may not earn dividends for investors. Some investors buy a stock because it regularly pays a dividend. Others buy stocks primarily for long-term growth. When a stock is sold, any gain realized is generally called a capital gain.
A mutual fund may earn interest, or other amounts taxed as ordinary income (including income from securities lending activities), dividends, capital gains or a combination of these on its investments. The fund distributes earnings and/or return of capital or pays dividends to securityholders according to the number of securities held. These distributions or dividends may be made monthly, quarterly or annually. You can receive the earnings, return of capital or dividends in cash or reinvest them in more securities. They must be reinvested in additional securities if you hold your mutual fund securities in an MMF Registered Plan.
The right mutual fund for you may not be the right mutual fund for another investor since everyone invests for different reasons. Some investors have short-term goals, like saving for a vacation, while others have long-term goals, like a financially secure retirement or a child’s education. Many investors have short, medium and long-term goals, and different investments to help meet each one.
GENERAL RISKS COMMON TO ALL MUTUAL FUNDS
Every investor has a different tolerance for risk. No one likes to think about risk when it comes to investing, because you invest to make money, not to lose it. However, to be comfortable with your investments you should think about your risk comfort level before you invest.
This section and the next, “Specific Risks That
risks associated with investing in mutual funds. As you read the descriptions, keep in mind your risk comfort level and your various investment
objectives to help determine which Funds are right for you.
Fluctuation
Mutual funds own different types of investments, depending upon their investment objectives. The value of these investments will change from day to day, reflecting changes in interest rates, economic conditions, and market and company news. As a result, the value of a mutual fund's securities may go up and down, and the value of your investment in a mutual fund may when you redeem it be more or less than when you purchased it.
No guarantees
Your investment in a Fund is not guaranteed. Unlike bank accounts or GICs, mutual fund securities are not covered by the Canada Deposit Insurance Corporation or any other government deposit insurer.
Under exceptional circumstances, a mutual fund may suspend redemptions. See “Purchases,
Switches and Redemptions” for more information.
SPECIFIC RISKS THAT APPLY TO ONE OR MORE MUTUAL FUNDS
The risks described below apply to one or more of our Funds. See the Fund descriptions beginning on page 70 for the risks of the Fund you are invested in.
Asset-Backed and Mortgage-Backed Securities Risk
obligation of the security upon maturity. In the use of mortgage-backed securities, there are also risks that there may be a drop in the interest rates charged on mortgages, a mortgagor may default in its obligations under a mortgage or there may be a drop in the value of the property secured by the mortgage.
Capital Depletion Risk
Series CT, Series FT, Series LT and Series T securities make regular monthly distributions that may consist, in whole or in part, of return of capital based on a targeted distribution rate of 5%, 6% or 8% per annum, as applicable, of the net asset value per security of the series as determined on December 31 of the prior year (or on an initial issue price of $15, where a new series is launched). A return of the original investment means a portion of the cash flow given back to the investor is the money that was invested in the Fund originally, as opposed to the returns or income generated by the investment. A return of the original investment reduces the net asset value of the particular series of the Fund and also reduces the assets available to investors who continue to invest in the Fund. As well, a return of the original investment reduces the total assets of the Fund available for investment, which may reduce the ability of the Fund to
generate future income. The target distribution rate should not be confused with a Fund’s “yield” or “rate of return”. An investor should not draw any conclusions about a Fund’s investment performance from the amount of the target distributions.
Monthly distributions may be reduced or discontinued without prior notice.
Class Risk
Each of the Manulife Funds will be charged separately for any expenses that are specifically attributable to that Fund. However, in the case of the Manulife Corporate Classes, if MIX Corp. cannot for any reason pay the expenses of a class of securities (i.e., a Manulife Corporate Class) using its proportionate share of MIX Corp.’s assets, MIX Corp. will generally be required to pay those expenses out of the other Manulife Corporate Classes’ proportionate share of MIX Corp.’s assets.
Commodity Risk
Some Funds may invest directly in gold and other commodities. Prices of commodities are generally cyclical and may experience dramatic fluctuations in short periods of time. Commodity prices can
change as a result of a number of factors,
including, supply and demand, speculation, central bank and international monetary activities, political factors, changes in government regulation, and changes in interest rates and currency values.
Concentration Risk
Some Funds may concentrate their investments in a portfolio of relatively few securities. As a result, the securities in which they invest may not be
diversified across all sectors or may be concentrated in specific regions or countries. By investing in a relatively small number of securities, a significant portion of such Funds may be invested in a single security. This may result in higher volatility, as the value of the portfolio will vary more in response to changes in the market value of an individual security. This may also result in a decrease in the liquidity of a Fund’s portfolio.
Counterparty Risk
A Fund may enter into a derivative contract(s) with one or more counterparties. Investment in a derivative contract will expose the Fund to the credit risk associated with the counterparty. Securityholders will have no recourse against the assets of the counterparty or its affiliate(s) with respect to any aspect of the derivative contract or payments thereunder.
Credit Risk
The value of the collateral securing a floating rate loan can decline, be insufficient to meet the obligations of the borrower, or be difficult to liquidate. As a result, a floating rate loan may not be fully collateralized and can decline significantly in value.
Currency Risk
Movements in exchange rates may affect the Canadian dollar value of a Fund’s securities that are priced in foreign currencies. For example, if a security is priced in a foreign currency and the value of that currency decreases relative to the Canadian dollar, then the value of that security converted into Canadian dollars will decrease. The opposite can also be true. Where appropriate, the Funds may use currency hedging to mitigate the effects of such currency movements.
The use of currency hedges to mitigate currency risk involves special risks including the possible default by the other party to the transaction, illiquidity and to the extent the portfolio advisor’s or portfolio sub-advisors’, as applicable, assessment of certain market movements is incorrect, the risk that the use of hedges could result in losses greater than if hedging had not been used. The hedging arrangements may have the effect of limiting or reducing the total returns of a Fund if the portfolio advisor’s or portfolio sub-advisors’, as applicable, expectations concerning future events or market conditions prove to be incorrect. In addition, costs associated with the hedging program may
outweigh the benefits of the arrangements in certain circumstances.
Default Risk
A debt issuer may fail to pay interest or principal promptly when due. This risk is typically, but not exclusively, associated with bonds that carry a below investment grade rating. The value of Funds that hold such securities may decline as a result. The savings account at Manulife Bank in which the Manulife Dollar-Cost Averaging Fund holds all of its assets, and in which certain other Funds may hold some of their assets, on deposit will not be insured by the Canada Deposit Insurance Corporation or any other government deposit insurer. These Funds are exposed, therefore, to the creditworthiness of
bankruptcy of Manulife Bank, the Funds, like any other savings account holder of Manulife Bank, will be considered unsecured creditors of Manulife Bank and may not, as a result, recover any of their assets held on deposit.
Derivative Risk
Each Fund, other than Manulife Money Fund, Manulife Money Market Private Trust and Manulife Dollar-Cost Averaging Fund, may use derivatives for hedging and non-hedging purposes, provided their use is consistent with the Fund’s investment
objective and Canadian securities laws.
What is a derivative?
A derivative is a security whose value is based on the price of some other asset such as a stock, currency or index. A derivative usually takes the form of a contract between two parties. Some examples:
䡲An option is the right – but not the obligation – to buy or sell currency, commodities or securities at an agreed price within a certain time period. 䡲A forward contract is an agreement to buy or sell currencies, commodities or securities for an agreed price at a future date or to pay an amount at a future date based on the value of a currency, commodity or security at such future time.
䡲A swap is an agreement between two parties to exchange one stream of cash flow against another stream on specified future dates. Swaps can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the
underlying interest.
A mutual fund may use derivatives to:
䡲Offset or reduce the risk of changes in currency values, securities prices or interest rates – this is called hedging
䡲Lower transaction costs, provide greater liquidity, and increase the speed with which a mutual fund can change its portfolio
䡲Make profits – for example, by entering into futures contracts based on stock market indices or by using derivatives to profit from declines in financial markets
There are risks as well as advantages in using derivatives:
䡲The price of a derivative may not accurately reflect the value of the underlying currency or security
䡲The cost of entering and maintaining derivative contracts may reduce a mutual fund’s total return to investors
䡲There is no guarantee a market will exist when a mutual fund wants to buy or sell its derivative contract, which could prevent the mutual fund from making a profit or limiting its losses
䡲The other party to a derivative contract may not be able to meet its obligations and the mutual fund may experience a loss
䡲When a mutual fund enters into a futures contract, it deposits money with the futures dealer as security. If the dealer goes bankrupt, the mutual fund may lose these deposits
䡲Derivatives in foreign markets may be less liquid and involve greater risk of loss of deposits than derivatives traded in Canadian and U.S. markets 䡲If trading is halted in a derivative instrument, or in the stocks on which a stock index is based, a mutual fund may not be able to close its derivative contract. This could prevent the mutual fund from making a profit or limiting its losses
A hedging strategy may not be effective or may limit a mutual fund’s opportunity for gain. For example, the default by one party to the derivative transaction or an incorrect assessment of certain market movements, may result in a mutual fund incurring greater losses than if the hedging strategy had not been adopted. Hedging strategies may also have the effect of limiting or reducing the total returns to a mutual fund if expectations concerning
future events or market conditions prove to be incorrect.
With regard to options, the portfolio advisor or sub-advisor, as applicable, reduces the risk to the Funds by primarily trading in exchange-traded options rather than over-the-counter options. No mutual fund can use derivatives for speculative trading or to create portfolios with excess leverage.
Emerging Markets Risk
Emerging markets are subject to the various risks described under “Currency Risk” and “Foreign Market Risk”. In addition, they are more likely to experience political, economic and social instability and may be subject to corruption or have lower business standards. Instability may result in the expropriation of assets or restrictions on payment of dividends, income or proceeds from the sale of a mutual fund’s securities. In addition, accounting and auditing standards and practices may be less stringent than those of developed countries resulting in limited availability of information relating to a mutual fund’s investments. Further, emerging market securities are often less liquid and custody and settlement mechanisms in emerging market countries may be less developed resulting in delays and the incurring of additional costs to execute trades of securities.
Equity Risk
of mutual funds that invest in equities will fluctuate with these changes.
In the case of equity securities which are units of income trusts, the price will vary depending on the sector and underlying asset or business.
ETF Risk
Certain Funds may invest in securities of exchange-traded funds (“ETFs”) which qualify as index participation units under NI 81-102 (see the “Glossary”). These ETFs seek to provide returns similar to the performance of a particular market index or industry sector index. ETFs may not
achieve the same return as their benchmark market or industry sector indices due to, among other things, differences in the actual weights of
securities held in the ETF versus the weights in the relevant index (any such differences are usually small) and due to the operating and management expenses of the ETFs. An ETF may, for a variety of reasons, also fail to accurately track the market segment or index that underlies its investment objective. The price of an ETF can also fluctuate and the value of Funds that invest in securities offered by ETFs will change with these fluctuations. The Manulife Managed Solutions, Manulife
Diversified Income Portfolio, Manulife Global Strategic Balanced Yield Fund, Manulife Strategic Balanced Yield Fund, Manulife Strategic Income Fund, Manulife U.S. Dollar Strategic Balanced Yield Fund, Manulife U.S. Balanced Private Trust,
Manulife U.S. Dollar Strategic Income Fund, Manulife Strategic Investment Grade Global Bond Fund, Manulife Global Fixed Income Private Trust and Manulife Diversified Strategies Fund have obtained regulatory relief so that they may also invest in certain additional types of ETFs whose securities do not qualify as index participation units, including ETFs that seek to replicate the price of gold or silver, or which employ leverage in an attempt to magnify returns by either a multiple or an inverse multiple of a benchmark. ETFs that use leverage involve a higher degree of risk and are subject to increased volatility. ETFs that seek to replicate the price of gold or silver are subject to the risks associated with investing in gold or silver, as applicable.
The Manulife Managed Solutions, Manulife
Diversified Income Portfolio and Manulife Diversified Strategies Fund have additionally
obtained regulatory relief so that they may invest in other commodity ETFs that have exposure to one or more physical commodities, other than gold or silver, on an unlevered basis. These physical commodities may include, without limitation, precious metals commodities (such as platinum, platinum certificates, palladium and palladium certificates), energy commodities (such as crude oil, gasoline, heating oil and natural gas), industrials and/or metals commodities (such as aluminum, copper, nickel and zinc) and agricultural
commodities (such as coffee, corn, cotton, lean hogs, live cattle, soybeans, soybean oil, sugar and wheat). ETFs that seek to replicate the price of these commodities are subject to the risks associated with investing directly in these
commodities, as applicable (see also "Commodity Risk").
These same Funds have also applied for regulatory relief so that they may invest up to 10% of their assets in the following absolute return ETFs: 1. IQ Hedge Multi-Strategy Tracker ETF; 2. IQ Hedge Macro Tracker ETF; and 3. Proshares Hedge Replication ETF (collectively, the "Absolute Return ETFs"). MAML believes that having the ability to invest a limited portion of the above-noted Funds' assets in the Absolute Return ETFs will increase diversification opportunities and improve their overall risk/reward profile. By investing in these Absolute Return ETFs, these Funds will be able to gain exposure to the benefits of absolute return strategies through stock exchange listed, transparent, regulated and liquid investments. The Absolute Return ETFs: (i) are not themselves "hedge funds" nor are they funds of hedge funds; (ii) do not seek to provide leveraged returns and the amount of loss that can result from an
the regulation of other exchange traded funds listed on stock exchanges in the United States that fall within the definition of "index participation unit" in NI 81-102; (vi) invest according to a specific named index; and (vii) are unaffiliated with MAML. If the relief is granted, it is expected that a Fund will not be able to make further purchases of these additional types of ETFs when more than 10% of its assets are already invested in such ETFs and Commodity products.
Floating Rate Loan Liquidity Risk
Floating rate loans generally are subject to legal or contractual restrictions on resale. The liquidity of floating rate loans, including the volume and frequency of secondary market trading in such loans, varies significantly over time and among individual floating rate loans. For example, if the credit quality of a floating rate loan unexpectedly declines significantly, secondary market trading in that floating rate loan can also decline for a period of time. During periods of infrequent trading, valuing a floating rate loan can be more difficult, and buying and selling a floating rate loan at an acceptable price can be more difficult and delayed. Difficulty in selling a floating rate loan can result in a loss.
Foreign Market Risk
Securities in countries outside Canada may fluctuate in value more than Canadian securities because:
䡲They may be affected by political or economic instability
䡲There may be less information about foreign issuers
䡲Foreign issuers may be less regulated and have lower standards of accounting and
financial reporting
䡲Securities traded in foreign markets may be more difficult to buy and sell and their prices may vary more dramatically than securities traded on North American exchanges
䡲Foreign countries may impose investment regulations, exchange controls or taxes that could impact profits
As a result, the value of Funds that invest in foreign securities may fluctuate more than Funds that
invest mainly in Canadian securities. In addition, the securities markets of many countries have at times in the past moved relatively independently of one another due to different economic, financial, political and social factors. This may reduce any gains the Fund has derived from movements in a particular market. A Fund that holds foreign securities may have difficulty enforcing legal rights in jurisdictions outside Canada.
Highly Leveraged Company Risk
Securities of highly leveraged companies tend to be more sensitive to issuer, political, market, and economic developments than the markets as a whole and the securities of other types of companies. A decrease in the credit quality of a highly leveraged company can lead to a significant decrease in the value of the company’s securities. In the event of liquidation or bankruptcy, a company’s creditors take precedence over the company’s shareholders. Highly leveraged companies can have limited access to additional capital.
Income Trust Risk
unitholders. However, the income trust may still have exposure to claims for damages not arising from contractual obligations.
Interest Rate Risk
The value of the bonds, T-bills and other fixed income instruments held in a Fund’s portfolio varies with interest rates generally. When interest rates rise, the value of outstanding bonds paying a fixed rate falls. When interest rates fall, the value of bonds paying a fixed rate rises. The value of a Fund that holds these types of securities will
consequently fluctuate accordingly.
The interest earned by the Manulife Dollar-Cost Averaging Fund on its savings account deposits will vary with interest rates generally. When interest rates rise, the interest earned by the Fund on its savings account deposits may rise. When interest rates fall, the interest earned by the Fund on its savings account deposits may fall. The value of the Fund will fluctuate with the value of the interest earned on its savings account deposits.
Liquidity Risk
The speed and ease with which an asset can be converted into cash is often described as its liquidity. Some companies are not well known, have few securities outstanding or can be significantly affected by political and economic events. Securities issued by these companies may be “illiquid” or difficult to buy and sell and the value of Funds that buy these securities may be subject to significant fluctuation. For example, smaller companies may not be listed on a stock market or traded through an organized market, may be difficult to value because they are developing new products or services for which there is not yet a developed market or revenue stream, or may have few securities outstanding, so a sale or purchase of their securities will have a greater impact on the security price. While investments in illiquid assets can often present above average growth opportunities, they can be difficult or impossible to value and/or sell at the time and price preferred by the mutual fund. Accordingly, there is a risk that the mutual fund may have to sell such securities at a lower price, sell other securities instead to obtain cash or forego
other investment opportunities. See “Valuation Risk for Illiquid Assets”.
In accordance with NI 81-102, there are restrictions on the amount of illiquid securities a Fund is permitted to hold.
In accordance with federal regulations applicable to Canadian banks, Manulife Bank is required to hold cash on reserve that represents only a fraction of the aggregate funds deposited by all of its account holders, including the Manulife Dollar-Cost
Averaging Fund. As a result, Manulife Bank may not in certain circumstances have sufficient cash to fund large withdrawals from its investment savings accounts, including the investment savings account in which the Manulife Dollar-Cost Averaging Fund holds all of its assets, and Manulife Bank may delay withdrawals in such circumstances.
Multiple Series Risk
The Funds may have multiple series of securities. Each series will be charged separately for any expenses that are specifically attributable to that series. Those expenses will be deducted in
calculating the net asset value per security for that series of securities, thereby reducing the net asset value per security of that series. If there are insufficient assets of a series to pay for the
expenses of the series, the other assets of the Fund, including assets attributable to other series of securities, will be used to pay the expenses. As a result, the net asset value per security of the other series of securities may also be reduced. Please see “Purchases, Switches and Redemptions” for more information regarding each series and how its net asset value per security is calculated.
Prepayment Risk
Private Company Risk
There are risks associated with investing in private company securities. For example, there is typically less available information concerning private companies than for public companies. The
valuation of private company securities is also more subjective and private company securities are very illiquid as there are no established markets for such securities. As a result, in order to sell this type of holding, a Fund may need to discount the securities from recent prices or dispose of the securities over a long period of time.
Real Estate Risk
In addition to general market conditions, the value of a mutual fund which invests in securities in the real estate sector will be affected by the strength of the real estate markets. Factors that could affect the value of such a fund’s holdings include the following:
䡲Overbuilding and increased competition 䡲Increases in property taxes and
operating expenses
䡲Declines in the value of real estate
䡲Lack of availability of equity and debt financing to refinance maturing debt
䡲Vacancies due to economic conditions and tenant bankruptcies
䡲Losses due to costs resulting from environmental contamination and its related clean-up
䡲Changes in interest rates 䡲Changes in zoning laws
䡲Casualty or condemnation losses 䡲Variations in rental income
䡲Changes in neighbourhood values and
䡲Functional obsolescence and appeal of properties to tenants
Regulatory Risk
Some industries, such as financial services, health care and telecommunications, are heavily regulated and may receive government funding. Investments in these sectors may be substantially affected by changes in government policy, such as increased regulation, ownership restrictions, deregulation or reduced government funding. The value of a mutual fund that buys these investments may rise
and fall substantially due to changes in these factors.
Securities Lending, Repurchase and Reverse Repurchase Transaction Risk
A Fund may from time to time engage in securities lending, repurchase and reverse repurchase
transactions in accordance with applicable securities laws.
In a securities lending transaction, a mutual fund will lend its securities to a borrower in exchange for a fee. A repurchase agreement takes place when a mutual fund sells a security at one price and agrees to buy it back later from the same party at a higher price. The difference between the higher price and the original price is like the interest payment on a loan. A reverse repurchase agreement is the opposite of a repurchase agreement and occurs when a mutual fund buys a security at one price and agrees to sell it back to the same party at a higher price. Securities lending, repurchase transactions and reverse repurchase transactions come with certain risks. For example, if the other party to a securities lending transaction or reverse repurchase agreement cannot complete the transaction, the mutual fund may be left holding the security. Alternatively, a mutual fund could lose money if the value of the security drops. To
minimize the risks of these transactions, the borrower or buyer of securities must provide collateral which is of the type and worth at least the minimum amount permitted by the Canadian securities regulators. The value of the securities used in securities lending, repurchase or the reverse repurchase transactions and the collateral will be monitored daily and the collateral adjusted
appropriately by the custodian or sub-custodian of the Funds.
The Funds may not commit more than 50% of their securities on a net asset value basis in securities lending, repurchase or reverse repurchase transactions at any time. Securities lending
Short Selling Risk
Short selling involves selling securities which are not owned and borrowing them for delivery to the purchaser, with an obligation to replace the borrowed securities at a later date. Short selling allows the investor to profit from declines in the market prices to the extent such decline exceeds the transaction costs and the costs of borrowing the securities. The extent to which the Funds engage in short sales will depend on the portfolio advisor’s or portfolio sub-advisors’ investment strategy and opportunities provided that their use is consistent with Canadian securities laws including NI 81-102. A short sale creates the risk of
theoretically unlimited loss, in that the price of the underlying security could theoretically increase without limit, thus increasing the cost to the Fund of buying those securities to cover the
short position.
There can be no assurance that a Fund will be able to maintain the ability to borrow securities sold short. In such case, the Fund can be “bought in” (i.e., forced to repurchase securities in the open market to return to the lender). There also can be no assurance that the securities necessary to cover a short position will be available for purchase at or near prices quoted in the market. Purchasing securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss.
Small Company Risk
Some Funds invest in small companies in
accordance with their investment objectives. The valuations of smaller companies tend to be more volatile than those of large established companies. As such, the value of Funds that buy securities of smaller companies may rise and fall significantly.
Specialization Risk
Some Funds specialize in investing in a particular industry or part of the world. Specialization allows the portfolio advisor to focus on specific areas of the economy, which can boost profits if both the sector and the companies selected prosper. However, if the industry or geographic area
experience challenges, the Fund will suffer because there are relatively few other exposures to offset
be affected by challenges in a similar manner. The Fund must follow its investment objective and may be required to continue to invest primarily in securities in the industry or geographic area, whether or not it is prosperous.
Substantial Securityholder Risk
A Fund may have one or more substantial investors, such as a financial institution, who hold a
significant amount of securities of the Fund. A financial institution may, for example, buy or sell large amounts of a Fund to hedge its obligations relating to a guaranteed investment product whose performance is linked to the performance of the Fund. If a substantial investor decides to redeem its investment in a Fund, the Fund may be forced to sell its investments at an unfavourable market price in order to accommodate such request. The Fund may also be forced to change the composition of its portfolio significantly. Such actions may result in considerable price fluctuations to the Fund’s net asset value and negatively impact on its returns. Such risk is higher where a substantial
securityholder of a Fund engages in short-term trading or excessive trading. The Funds do,
however, have policies and procedures designed to monitor, detect and deter inappropriate short-term or excessive trading. See “Short-Term Trading”.
Tax Risk
Canadian Tax Rules
There can be no assurance that the tax laws applicable to the Funds, including the treatment of mutual fund trusts and mutual fund corporations under the Income Tax Act (Canada) (the “Tax Act”), will not be changed in a manner which could adversely affect the Funds. The Tax Act contains rules that provide that gains realized on the
disposition of property under a “derivative forward agreement,” as defined, will be treated as ordinary income and losses realized on a disposition may be deducted from income. Subject to certain
days and where the sale price (or purchase price) of the property is determined by reference to, for example, the value of other property. The Funds do not expect these rules to apply to any of their current investment strategies. However, the rules are broadly worded and there can be no guarantee that the rules will not inadvertently apply to
transactions undertaken by the Funds and result in the recharacterization of capital gains to ordinary income.
The Tax Act contains “loss restriction event” (“LRE”) rules that could potentially apply to certain trusts including the Manulife Funds. In general, a Manulife Fund is subject to a LRE if a person (or group of persons) acquires more than 50% of the fair market value of the securities of the Manulife Fund. If a LRE occurs (i) the Manulife Fund will be deemed to have a year end for tax purposes immediately before the LRE occurs, (ii) any net income and net realized capital gains of the Manulife Fund at such year end will be distributed to securityholders of the Manulife Fund to the extent required for the Manulife Fund not to be liable for income taxes, and (iii) the Manulife Fund will be restricted in its ability to use tax losses (including any unrealized capital losses) that exist at the time of the LRE on a go-forward basis.
However, a Manulife Fund will be exempt from the application of these LRE rules if it satisfies certain investment requirements and qualifies as an "investment fund" under the rules.
U.S. Tax Rules
Certain Funds that invest in specific U.S. debt securities may be considered to be engaged in a U.S. trade or business causing such Funds to be subject to U.S. income tax. In order to mitigate these tax consequences, the Manager of such Funds has established investment guidelines for investments in such U.S. debt securities.
The U.S. has enacted the Foreign Account Tax Compliance Act (“FATCA”). FATCA requires certain non-U.S. financial institutions to report on accounts held by U.S. taxpayers and certain entities. Failure to comply with FATCA could subject a financial institution or its account holders to certain sanctions including special U.S. withholding taxes on payments to them from the U.S. For purposes of
the FATCA rules, each Manulife Fund or MIX Corp. is treated as a non-U.S. financial institution. On February 5, 2014, Canada and the U.S. signed an intergovernmental agreement to improve international tax compliance through enhanced exchange of information under the Canada-United States Tax Convention (the “IGA”) relating to FATCA, and, on June 19, 2014, legislation to implement the IGA was enacted. Generally, under the terms of the IGA and the related legislation, a Canadian investment fund that is treated as a non-U.S. financial institution may be required to collect information from securityholders of its securities (other than securities that are regularly traded on an established securities market for purposes of the IGA) regarding such holders’ status as “Specified U.S. Persons” as defined in the IGA (generally, U.S. residents and U.S. citizens), as non-U.S. entities controlled by one or more Specified U.S. Persons or as non-U.S. entities that are “Nonparticipating Financial Institutions” as defined in the IGA and, in the case of a Specified U.S. Person or such a non-U.S. entity, report certain information to the Canada Revenue Agency (“CRA”) regarding such securityholder’s investment in the fund. Such information includes identification of the
securtyholder, U.S. tax identification number and investment amount of income paid in the period. The CRA will then communicate this information to the IRS under the existing provisions of the
Canada-United States Tax Convention (1980) (as amended).
Based on the IGA, the related legislation and the Manager’s understanding of the relevant facts, the Manager believes that, provided each Manulife Fund or MIX Corp. complies with its information collection and reporting obligations under the legislation, each Manulife Fund or MIX Corp. will not be (i) subject to any withholding tax under FATCA in respect of payments made to the Manulife Fund or MIX Corp., nor (ii) required to withhold any amounts under FATCA on payments to its securityholders. Each Manulife Fund or MIX Corp. intends to comply with the IGA and related legislation to the extent applicable in its
including any guidance from the CRA on the obligations of the Manulife Funds and MIX Corp. under the related legislation.
Underlying Fund Risk
Certain of the Funds (the “Top Funds”) invest some or all of their assets in, or otherwise obtain
exposure to, Underlying Funds as part of their investment strategies. These Top Funds will be subject to the risks of the Underlying Funds. If an Underlying Fund suspends redemptions, the Top Fund that invests in it will be unable to value part or all of its portfolio or redeem securities held by it. In addition, a Top Fund may become a large
investor in an Underlying Fund. In such cases, the Underlying Fund is subject to the risk that the applicable Top Fund may have to redeem a significant number of securities in the Underlying Fund within a short period of time to meet
redemptions at the Top Fund level. As a result, the Underlying Fund may have to change its portfolio significantly in order to meet such purchase or redemption requests. This can affect the
performance of the Underlying Fund and, in turn, the value of the Top Fund that is investing in it.
Valuation Risk for Illiquid Assets
A mutual fund may invest a limited amount of its portfolio in illiquid assets. The valuation of these investments is determined daily. Illiquid assets may or may not be available for sale in the public marketplace. Illiquid assets available for sale in the public marketplace are valued using the exchange specific closing price unless there was no trading activity for the investment in which case the mid (average of bid and ask) price may be used. For illiquid assets where no published market exists, valuations are determined using the Manager’s Fair Valuation Policy (see additional information in the AIF under “Valuation of Securities and Calculation of Net Asset Value”). The valuation of illiquid assets that have not had recent trading activity or for which market quotations are not publicly available has inherent uncertainties and the resulting values may differ from values that would have been used had a ready market existed for the investment. The fair value process is subjective to a degree and, to the extent that these valuations are inaccurate, investors in the mutual fund may gain a benefit or suffer a loss when they purchase or redeem securities of a mutual fund that invests in illiquid assets.
Organization and Management Details of the Manulife Mutual
Funds and Manulife Private Investment Pools
Manager
Manulife Asset Management Limited, through its operating division, Manulife Investments
200 Bloor Street East North Tower 4 Toronto, Ontario M4W 1E5 1 888 588 7999 manulifemutualfunds.ca The manager:
䡲 Manages the overall activities and operations of the Funds 䡲 Provides or arranges for investment management, fund
accounting and administrative services, including registrar and transfer agency services, to the Funds. Certain of such administrative services may be provided from countries outside of Canada
䡲 Promotes sales of the Funds’ securities
For more information, please refer to the Funds’ AIF.
Trustee
Manulife Asset Management Limited Toronto, Ontario
Portfolio Advisor
Manulife Asset Management Limited Toronto, Ontario
MAML is the primary portfolio advisor for each Fund. The portfolio advisor manages the investment portfolio of a Fund. MAML also hires portfolio sub-advisors to provide investment advice for certain Funds. The individual
investment portfolio sub-advisor for each of these Funds is listed in the applicable Fund description. MAML is
responsible for all investment advice provided to the Funds.
Principal Distributor
Manulife Asset Management Investments Inc.
Toronto, Ontario
The principal distributor markets and sells the Funds through brokers and dealers.
Custodian
RBC Investor Services Trust
(formerly RBC Dexia Investor Services Trust)
Toronto, Ontario
RBC Investor Services Trust is the custodian for the Funds. RBC Investor Services Trust is independent of the Manager. The custodian and its sub-custodians have physical custody of the securities in the Funds’ portfolios which are not held in a book based depository system. The custodian ensures the assets of each Fund are safely held.
Registrar
Manulife Asset Management Limited Toronto, Ontario
The registrar makes arrangements to keep track of the owners of securities of each of the Funds, process purchase, transfer and redemption orders, issue investor account statements and issue annual tax reporting information.
Auditor
PricewaterhouseCoopers LLP Toronto, Ontario
PricewaterhouseCoopers LLP is the auditor of the Funds and is an independent chartered professional accounting firm. The auditor issues an opinion as to whether or not the annual financial statements of the Funds present fairly, in all material respects, the financial position, financial
performance and cash flows of the Funds in accordance with International Financial Reporting Standards.
Securities Lending Agent
RBC Investor Services Trust Toronto, Ontario
The securities lending agent arranges and administers loans of a Fund’s portfolio securities for a fee, to qualified buyers who have posted collateral.
Independent Review Committee
On behalf of the Funds, we have established an IRC. The IRC is comprised of three independent members and makes recommendations or gives approval, as applicable, relating to actual or perceived conflicts of interest involving the Funds that have been identified and referred to the IRC by the Manager. The IRC prepares, at least annually, a report of its activities for securityholders which will be available on our Internet site at manulifemutualfunds.ca or, at the request of securityholders at no cost, by calling toll-free
1 888 588 7999 or by email at [email protected].
Certain reorganizations of a Fund or transfers by a Fund of its assets to another mutual fund will not require the
approval of securityholders provided certain criteria are met. Such criteria may include obtaining the approval of the IRC. In such circumstances, investors will receive written notice at least 60 days before the effective date of the reorganization or transfer.
In addition, the auditors of the Funds may not be changed unless the IRC has approved the change in accordance with NI 81-107, and a written notice describing the change of auditors is sent to securityholders at least 60 days before the effective date of the change.
Additional information about fund governance and the IRC, including the names of its members, is available in the AIF relating to the Funds.
Voting Policy for Investments in Underlying Funds
Purchases, Switches
and Redemptions
Nature of Securities
When you invest in one of the Manulife Funds, you are buying units of a mutual fund trust and when you invest in one of the Manulife Corporate Classes you are buying a class of shares of a mutual fund corporation. The Funds are open-ended, which means they can issue an unlimited number of series of redeemable securities, with each series
consisting of an unlimited number of securities.
Series of Securities
Depending upon the Fund, as many as 16 series of securities of the Funds are currently offered for sale under this simplified prospectus. Advisor Series securities, Series C securities, Series CT6 securities, Series D securities, Series F securities, Series FT5 securities, Series FT6 securities, Series FT8 securities, Series I securities, Series L securities, Series LT6 securities, Series T5 securities, Series T6 securities, Series T8 securities and, in the case of Manulife Money Fund, Series N securities and, in the case of Manulife Monthly High Income Fund, Series B securities are offered under this simplified
prospectus. Series G securities, Series H securities, Series J securities, Series K securities, Series M securities, Series O securities and Series X securities of certain Funds also exist but are not offered under this simplified prospectus. These securities may be issued in connection with other Manulife products or to large institutional investors or accredited investors. Without your consent or notice to you, the Manager may establish additional series of securities of any of the Funds and may determine the rights as between those series. Most of the discussion that follows about fees and commissions applies to Advisor Series securities. We note any differences for other Series of securities where relevant.
Securities of the Manulife U.S. Dividend Registered Fund are only available to RRSPs and RRIFs
(including the various types of locked-in registered plans such as LIRAs, LRSPs, RLSPs, LIFs, LRIFs, RLIFs and PRIFs) whose planholders are residents of Canada or the U.S. for tax purposes, DPSPs, registered pension plans (RPPs) and other entities, as may be permitted by the Manager from time to
time (each a "Qualified Investor"). Certain Manulife Corporate Classes may not be available for
purchase (including switches) in Registered Plans. See “Who Should Invest in This Fund?” in the applicable Fund’s profile for more information. All securities are entitled to participate in a Fund’s assets on liquidation on a series basis. Securities of the Manulife Corporate Classes are issued as fully paid and non-assessable. With respect to the Manulife Funds, as mutual funds structured as trusts, all securities will be fully paid, when issued, in accordance with the terms of their declaration of trust. Further, the Trust Beneficiaries’ Liability Act, 2004 (Ontario) provides that holders of units of a trust are not, as beneficiaries, liable for any default, obligation or liability of the trust if, when the default occurs or the liability arises: (i) the trust is a reporting issuer under the Securities Act (Ontario); and (ii) the trust is governed by the laws of Ontario. Each Manulife Fund is or will be a reporting issuer under the Securities Act (Ontario) prior to the initial issuance to investors of securities of each Manulife Fund and each Manulife Fund is governed by the laws of Ontario by virtue of the provisions of its declaration of trust. All securities are redeemable at their net asset value.
Certain Funds are available in both Canadian and U.S. dollars. Manulife U.S. Dollar Floating Rate Income Fund, Manulife U.S. Dollar Strategic