The insurers all reported higher assets under management as they saw inflows of investments and market gains, with Sun Life up 11% to $1.39 trillion compared with the end of 2020, Manulife up 7% to $1.4 trillion over the same period, and Great West up 11% to $2.2 trillion.
All three also reported negative effects of the pandemic, particularly in their U.S. and Asian divisions.
Manulife said its earnings were impacted by a $152 million charge to its property and casualty reinsurance business for losses related to Hurricane Ida and European floods, and the effects of Covid-19 on policyholders in Asia and the U.S.
Anil Wadhwani, CEO of Manulife Asia, said on an earnings call Thursday that the pandemic affected the division both in sales and claims.
“We saw a significant impact on account of the resurgence of Covid in Southeast Asian market, and that had an impact on at two levels. One, we saw our sales volume get impacted; and the second, we experienced adverse policyholder experience specifically coming out of markets like Indonesia and Philippines.”
Great-West said third quarter earnings were down 31% in its capital and risk solutions division compared with last year because of major weather events and unfavourable U.S. life claims totalling $71 million from direct and indirect Covid-19 impacts.
And Sun Life said its U.S. business saw a 19% drop in underlying net income because of higher claims from Covid-19, as well as lower base earnings in its Asian division because of the effects of the pandemic especially in Indonesia and the Philippines.
Daniel Fishbein, president of Sun Life’s U.S. division, said on an earnings call Thursday that the higher claims in the U.S. came as Covid-19 hit working age people who have lower vaccine rates than those over 65.
“The third quarter was the worst quarter for mortality in the U.S. in the working age population since the pandemic began […] so in the third quarter, we saw a big shift in mortality into the working age population.”
Scotiabank analyst Meny Grauman said in a note that the key news from Sun Life was its upgraded expectations for return on equity to 16% for the medium-term, while the company’s performance in the U.S. and Asia both came in below expectations to impact results.
“We expect both of those impacts to be temporary, but they do take some of the shine off of what in our view is a constructive earnings release.”
Grauman said that Manulife core earnings per share were 4% below his expectations, but that overall the results were neutral.
“We see them as neutral thanks to a number of offsetting pluses and minuses, and most notably no major red flags.”
He said that a potential catalyst for Manulife is aggressive share buybacks if Canada’s financial services regulator lifts restrictions on them, as is expected to be announced Thursday.
Peel Hunt Reports Record First-Half Investment Banking Revenue – BNN
(Bloomberg) — Peel Hunt’s investment banking unit reported record results in the six months to Sept. 28 as the exit from lockdown boosted market confidence and the broker grew its client roster.
Revenue at the division rose 43% to 32.7 million pounds ($44 million), with investment banking fees up almost half, the company said in a statement Wednesday. That’s its strongest half-year on record.
“We continue to grow our number of retained investment banking clients and have a healthy deal pipeline with a strong balance of transactions,” Chief Executive Officer Steven Fine said in the statement. “We’re well positioned to execute our growth plans, which include opening an European office.”
The firm’s research operations grew by 3.5% and revenue at its execution and trading operations more than halved to 24 million pounds, reflecting an expected normalization from the heightened trading volumes seen at the onset of the pandemic.
The firm returned to London’s Alternative Investment Market at the end of September, more than two decades after it was first floated. It currently has 162 corporate clients, with an average market value of around 775 million pounds.
©2021 Bloomberg L.P.
Here’s why you shouldn’t shy away from investing, even if you only have a small amount of money – CNBC
Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.
Robert G. Allen, author of several best-selling personal finance books once asked, “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”
Using a savings account and an emergency fund for short-term expenses is important, but investing for retirement and the future is arguably just as crucial. While it may feel pointless to start investing if you don’t have much money, it can still be incredibly worthwhile. Think of it this way: few, if any, start investing with a large sum of money. For many, growing your wealth happens over years and years and is a slow and steady process.
By starting slow, even with a small amount of cash, you can begin to establish the habit of investing regularly, which will hopefully lead to a large nest egg in the future.
Select details why you should start investing today, even if you don’t have a large amount of money to start with.
Subscribe to the Select Newsletter!
Our best selections in your inbox. Shopping recommendations that help upgrade your life, delivered weekly. Sign-up here.
Why you should start investing today
Investing can be an intimidating word and concept for many reasons. There are a large amount of terms, tax implications, planning and investments to understand — along with knowing there will be market fluctuations making your net worth go up and down. But by understanding the mere basics, you can begin to grow your wealth quickly.
Corbin Blackwell CFP, senior financial planner at wealth management app Betterment, told Select that, “Investing is one of the best ways to grow your long-term wealth and reach major goals for things like retirement, buying a home and college funds.”
He also said that beginning the investing journey is often the most difficult part, as growth will be limited at first. He added that, “Tools available today, like digital investment advisors, make it easier than ever to get started.”
And by getting started today, you have the best asset that any investor can have on their side: time.
By letting your money sit in the market longer, you allow for compound interest to take over — which is when your interest and gains stack on top of one another. Blackwell gives an excellent example of the power of compound interest:
“Let’s say you invested just $100 today and saw a 5% annual return – thanks to the power of compound interest, if you don’t touch your investment, in 30 years you’d have $430.”
That’s an ok return, but imagine if you invested $100 monthly for 30 years into a common index fund. An index fund is a fund that has a group of companies within it, and tracks the performance of the entire group. These groups can range in focus including the size of each company, the respective industries, location of the companies, type of investment and more. One of the most popular indices, the S&P 500, consists of the 500 largest companies in the United States, making it a relatively safe investment because of its exposure to hundreds of companies and dozens of industries.
Many consider this a ‘boring investment,’ but the results the index has produced are nothing to balk at.
The average yearly return of the S&P 500 over the last 30 years is 10.7%, but even at a conservative return of 8%, you would have over $146,000 if you invest $100 a month for 30 years. The impressive part is that your total contributions would be $36,000, which means your money would have quadrupled in value in 30 years (note that past performance does not guarantee future success).
In short, the more money and more time you have in the market, the more likely you are to grow your investment funds.
S&P 500 Index performance during the Covid-19 pandemic
How to begin investing
If growing your net worth is your goal, you can get started in just a few minutes. Here are a few things to consider:
Build a budget that works for you
Starting to invest with a small amount of money isn’t an issue. However, it’s important to know how much you can afford to invest, as you don’t want to harm your personal finances in the process. Blackwell urged, “as long as you aren’t using money [to invest] that you need to cover day to day expenses such as food, rent and high interest debt payments, I recommend you start investing.”
A budget gives you a way to see where your money is going each month, where you can possibly cut back and how much you can invest each month. You can set up a budget for yourself using a budgeting app, a spreadsheet or even a simple pen and paper. I use Personal Capital to manage my budget because I’m able to track my expenses and monitor the performance of my investments in one convenient app.
Regardless of which budgeting method works best for you, it’s important to have an established budget to understand how much you can invest each month without cutting into the money allocated towards your monthly essentials.
Select an investing “bucket” and investments
There are many different buckets you can fill with money, such as a Roth IRA, HSA, 529 or taxable brokerage account. Each of these accounts serve a different purpose and have different tax implications, so be sure to select one that makes sense for you. For example, a Roth IRA is great if you plan on being in a higher tax bracket when you retire — you’ll contribute after-tax income but all gains are tax-free after 59 and a half years old.
Once you select the type of account you want to invest within, you then must decide what type of investment to put your money into. This is the puzzling part for many, as there are an abundance of options, from ETFs to viral meme stocks to index funds and many more in-between.
For long term investors, index funds are a great solution as they have low fees, are low maintenance, provide wide exposure and many provide stable returns. In fact, John Bogle, the founder of Vanguard, summarizes the effectiveness of index funds in one analogy: “Don’t look for the needle in the haystack. Just buy the haystack.”
Regardless of which investment you choose, it’s important to evaluate your risk-tolerance and understand what you’re investing in. Be sure to do your own research, and potentially connect with an accredited financial advisor to discuss the best options.
Automate your investing
Once you determine how much you can and want to invest each month, it’s important to turn on auto-investing.
This is where money is taken out of your checking account each month and automatically deposited into your choice of investments. Choosing this option is important because it takes the leg work away from needing to invest each month. Additionally, studies show that we are built for ‘present bias‘ — which is the idea that the farther away something is, the less important it is. Essentially, it’s much easier to spend now, rather than save for later. Automating transfers from your checking account or paycheck into an investment account will help ensure you don’t spend money that you were planning on investing.
By automating your investments, you will be passively growing your nest egg and getting yourself closer to reaching your financial goals.
You may also want to consider a robo-advisor like Betterment or Wealthfront. Robo-advisors work by gathering information from you on your financial situation and investing goals to suggest investments that fit your needs and risk tolerance. After supplying this information, the robo-advisor will build you a portfolio based on your answers through computer algorithms and advanced software, with little to no work on your end. Plus, it will rebalance your investments over time based on your goals and changes in the market.
Best brokerages to get started
To begin investing, you’ll need to select a brokerage account provider. These brokerages serve as the intermediary between you and the seller of the stock or security you want to purchase.
When deciding on the best brokerage for you, be sure to consider these factors:
- Fees: These can range from minimum deposits, stock trade fees, mutual fund trade fees and more. Be sure to select a no- or low-fee brokerage.
- Ease of use: Each brokerage has a different website and mobile app. While this is much more subjective, it’s advantageous to use a brokerage with a web interface and experience you understand and enjoy.
- Promotions: From time to time, brokerages will offer bonuses to new users. For example, I recently signed up for a Fidelity brokerage account and earned a $100 bonus after depositing $50.
Below are a few of our favorite online brokerages:
Information about Fidelity accounts has been collected independently by Select and has not been reviewed or provided by the issuer prior to publication.
$0 for stocks, ETFs, options and some mutual funds
Stocks, bonds, fractional shares, ETFs, mutual funds, options
$0 commission on stocks, options and ETFs
Includes stocks, bonds, mutual funds, ETFs, options, Forex, and futures
Information about the Vanguard accounts has been collected independently by Select and has not been reviewed or provided by the issuer prior to publication.
Stocks, bonds, ETFs, mutual funds, options, CDs
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Increased scrutiny will make greenwashing tougher – Investment Executive
The global conversation around climate and social issues will make engaging in greenwashing more difficult, says Jacob Hegge, an investment specialist with J.P. Morgan Asset Management.
Hegge said the growing popularity of bonds that focus on environment, social and governance (ESG) excellence is helping to identify bad-faith players who try to appear more conscientious than they are.
He allowed that investing in green initiatives can be confusing, given unclear and sometimes conflicting definitions, but standardization is coming.
“It’s great to see all the activity around ESG, but a consequence of this increased activity means a greater dispersion in terminology,” he said. “As ESG investing continues to grow, we’d expect to see more standardization. But until then, it’s important to understand that navigating the landscape can be difficult.”
Hegge said investors should test the terminology used to define green projects.
“Is the data or testing methodology readily available for investors to use? Is it easy to understand? Are the definitions explained and easily accessible? These are things investors need to be looking out for,” he said. “It comes down to transparency and consistency. And as ESG investing continues to grow globally, we expect this standardization to be more prominent in the market.”
The hot ESG market makes it all the more necessary for investors to know what they’re buying, Hegge said. “We do think it’s important for investors to look under the hood and pay attention to what investment firms are saying when they title a fund as being ESG. They really need to make sure that investment products are staying true to the prospectus.”
Hegge said green and sustainability-linked bonds are being issued at record levels, and issues are likely to increase.
“This year alone, green social sustainability and sustainability-linked bonds are expected to reach a combined issuance of over a trillion [U.S. dollars], which is doubled compared to last year,” he said. “And … some expect that investment in green bonds will actually double and reach US$1 trillion for the first time in a single year by the end of next year.”
Hegge said many companies are at the beginning of their green journeys, and their success in meeting ambitious targets will reflect their commitment level.
“Don’t narrow your opportunity set by being put off by low ESG scores. The important part is whether these scores are improving over time. You can find sustainable bonds even if they don’t have a sustainable label in the market,” he said.
“The global fixed-income market is very large and there are a lot of opportunities out there.”
This article is part of the Soundbites program, sponsored by Canada Life. The article was written without sponsor input.
Russia may sue NASA astronaut over claims of drilling hole in spacecraft – WION
A Taliban ban on women in the workforce can cost economy $1bn – Aljazeera.com
RBC hiking dividend, buying back shares despite Q4 profit miss – BNN
Silver investment demand jumped 12% in 2019
Europe kicks off vaccination programs | All media content | DW | 27.12.2020 – Deutsche Welle
Iran anticipates renewed protests amid social media shutdown
Science23 hours ago
Meet Comet Leonard: After keeping us waiting for months, the brightest comet of 2021 is now set to pass near Earth – Times Now
Sports13 hours ago
Soccer-Canada added to four-team women’s tournament in England
Sports17 hours ago
Tiger Woods fighting to return after car crash severely injured leg – Toronto Sun
Health13 hours ago
COVID-19: MLHU reports 8 cases, 4.8% of kids 5-11 receive 1st dose in 2 days – Globalnews.ca
Health18 hours ago
COVID-19 detected in wastewater samples in Deer Lake, says Health Department – CBC.ca
Economy13 hours ago
'A temporary interruption': Economy could take slight hit from omicron variant in 2022, experts say – USA TODAY
Art7 hours ago
Princess Diana photo exhibition tours three U.S. cities
Business6 hours ago
Asian factories shake off supply headaches but Omicron presents new risks