Episode Details

In this episode of Investments Unplugged, host Kevin Headland is joined by Alex Richard, Senior Portfolio Manager, Multi-Asset Solutions, to discuss Manulife’s newly launched “all-in-one” ETF strategies—against a backdrop where portfolio diversification has reclaimed attention, following a period in which many investors were tempted to chase equity returns.

Kevin and Alex describe what makes these portfolios different from traditional “set-it-and-forget-it” asset-allocation ETFs, including:

• An active, flexible allocation process grounded in regularly updated capital market assumptions;
• Broader, deeper underlying portfolio diversification (including alternative investments) than many ETFs offer;
• A robust strategy implementation toolkit that can include select third-party ETFs and futures contracts. 

They also share their views on portfolio positioning across equities and fixed income in today’s market environment, as well as what role diversifying exposures (like global infrastructure and global credit) can play in a long-term investment strategy.
 

Key topics & insights

1. Why defense and diversification are back in focus

• After an extended run of strong equity performance, it’s tempting for many investors to de-emphasize portfolio defense and to overemphasize return-chasing.
• The episode reinforces the notion of strategic diversification being essential to long-term portfolio outcomes, especially amid bouts of macro and market volatility.

2. What are Manulife’s new “all-in-one” ETF portfolios?

• There are three different ETF strategies, each designed to fit a distinct investor risk profile—Manulife Conservative ETF Portfolio, Manulife Balanced ETF Portfolio, and Manulife Growth ETF Portfolio.
• The target equity/fixed-income portfolio allocations are roughly 60% bonds/40% stocks (conservative), 60% stocks/40% bonds (balanced), and 80% stocks/20% bonds (growth).
• However, these strategies are designed to go beyond simple equity/fixed-income splits by diversifying across global regions, market caps, investment styles, and degrees of active management.

3. Active at the core, built to adapt, TCR-ready

• Rather than managing the portfolios to static portfolio targets, the team can deviate from baseline equity/fixed-income allocations and adjust underlying exposures as market conditions warrant.
• Portfolio decisions are informed by a capital markets assumptions process, conducted quarterly, that covers expected levels of investment risk/return/correlation across 100+ asset classes.
• “Total-cost reporting (TCR) ready” is positioned as a relevant feature for Canadian advisors and investors focused on total-cost reporting.

4. Broader, deeper portfolio diversification

• Depending on the particular portfolio, the team can access close to (or upwards of) ~15 asset classes, including alternatives—for stepped-up portfolio diversification versus what many competing ETFs can offer.
• This broader mandate and flexibility allows for both “offensive” (return-seeking) and “defensive” (risk-managing) portfolio allocations, designed to pursue more consistent investor outcomes over time.

5. Implementation: Manulife ETFs + third-party ETFs + futures

• The portfolios are not limited to investing only in Manulife ETFs; third-party ETFs may also be used to gain portfolio exposures not available on Manulife’s platform.
• Examples of such “off-platform” portfolio exposures include global listed infrastructure, dedicated high-yield bonds, and emerging-market debt.
• In addition, where appropriate, the strategies may leverage futures contracts as a means of efficiently adjusti