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Important Notes:

  1. Manulife Global Fund – Preferred Securities Income Fund ("Manulife Preferred Securities Income Fund" or the "Fund") invests primarily in preferred securities listed or traded on any regulated market in the world, including preferred stocks (including convertible preferred stocks) and subordinated debt securities, which exposes investors to fixed income and equity market risk, volatility and liquidity risk and currency risk. As the Fund may carry significant exposure to US-related issuers it may expose investors to geographical concentration risk.
  2. The relevant distributing class of the Fund does not guarantee distribution of dividends, the frequency of distribution and the amount/rate of dividends. Dividends may be paid out of income, realised capital gains and/or out of capital of the Fund in respect of Inc share class(es). Dividends may be paid out of realised capital gains, capital and/or gross income while charging all or part of their fees and expenses to capital (i.e. payment of fees and expenses out of capital) in respect of MDIST (G) and R MDIST (G) share class(es). Dividends paid out of capital of the Fund amounts to a return or withdrawal of part of the amount of an investor's original investment or from any capital gains attributable to that original investment and may result in an immediate decrease in the net asset value per share in respect of such class(es) of the Fund.
  3. The Fund's investment in fixed income and cash and cash equivalents is subject to credit risk, interest rate risk, credit rating and downgrading risk and high-yield bonds risk.
  4. The Fund intends to use financial derivative instruments (“FDIs”) for investment, efficient portfolio management and/or hedging purposes.  The use of FDIs exposes the Fund to additional risks, including volatility risk, management risk, market risk, credit risk and liquidity risk.
  5. Investment involves risk. The Fund may expose its investors to capital loss. Investors should not make decisions based on this material alone and should read the offering document for details, including the risk factors, charges and features of the Fund and its share classes.
  6. Given RMB is currently not a freely convertible currency, payment of redemptions and/or dividend payment in RMB may be delayed due to the exchange controls and restrictions applicable to RMB. As offshore RMB (CNH) will be used for the valuation of RMB denominated Class(es), CNH rate may be at a premium or discount to the exchange rate for onshore RMB (CNY) and there may be significant bid and offer spreads and thus the value of the RMB denominated Class(es) will be subject to fluctuation. Any devaluation of RMB could adversely affect the value of investors' investments in the RMB denominated Class(es) of the Fund.
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What are Preferred Securities?

Issued by corporates, preferred securities rank between traditional bonds and common stocks in the capital structure of a corporate. In the event of corporate financial distress or a bankruptcy, a company's preferred securities are senior to common stock but subordinated to traditional bond.

The preferred securities issuers are usually large and highly regulated institutions and/or companies with stable cash flows such as banks, utilities, and real-estate investment trusts (REITs).

The average credit rating of preferred securities is BBB-, an investment grade (IG) rating.

Priority of dividends and claims

 

Examples of issuers1

 

Banks, insurance companies and financial services
Standard Chartered plc, HSBC Holdings, JPMorgan Chase, MetLife Inc.

 

Utilities
CMS Energy Corp., Dominion Energy Inc., NextEra Energy Inc., Southern Company

 

Others
Air Lease Corp., E-Bay Inc., QVC Inc., Qwest Corp

 

Preferred securities' rating2

 

Major advantages of Preferred Securities

Compelling yields with higher quality

Preferred securities offer an attractive combination of relatively high yield and high quality. With an average investment-grade rating, preferred securities yield around at 4.2% on average, higher than other high quality bonds.

 

Fig.1 Yield and credit rating of fixed income assets3

Relatively low default rate

Most preferred securities are issued by well-known corporates such as large banks and insurers, with high credit quality. Historically, the default rate of preferred securities was much lower than global high yield bonds.

 

Fig.2 Averaged long term default rates (1990 – 2019)4

Manulife Preferred Securities Income Fund

Aims to deliver consistent income plus a balanced sector positioning

Potential consistent income

Manulife Preferred Securities Income Fund aims to make monthly distributions with potential capital growth.

Dividend schedule

(The distribution amount is not guaranteed. Distribution may be paid out of capital. Refer to Important Note 2)

Seeks for balanced sector positioning via strong fundamental research

Solid portfolio management team with extensive experience with preferred securities and the utility industry.

For illustrative purposes only and does not represent the actual investment.

Manulife's investment expertise

26+ years

Investment experience by
the US based lead manager

140+

Global fixed income
investment experts6

USD 5.3 billion

AUM in preferred securities7,
one of the key players in
the market

  1. For illustrative purposes only in relation to the ICE BofAML US All Capital Securities Index's holding and may be subject to change. It does not constitute an offer or an invitation by or on behalf of Manulife Investment Management to any person to buy or sell any particular securities or investment. This material should not be viewed as a current or past recommendation or a solicitation of an offer to buy or sell any investment product or adopt any investment strategy. As of 31 December 2020.
  2. Source: Bloomberg, Manulife Investment Management, as of 31 December 2020. Preferred securities - ICE BofAML US All Capital Securities Index. Due to rounding, the sum may not be equal to 100%.
  3. Source: Bloomberg, Manulife Investment Management, as of 31 December 2020. US HY bonds - ICE BofAML US High Yield Index; Preferred securities - ICE BofAML US All Capital Securities Index; Global BBB grade corporate bonds - ICE BofAML BBB Global Corporate Index; US IG corp bonds - ICE BofAML US Corporate Index; Global bonds – ICE BofAML Global Broad Market Index; US treasuries - ICE BofAML US Treasury & Agency Index. For illustrative purposes only. Past performance is not an indication of future results. The above yield to maturity does not represent the distribution yield of the Fund and is not an accurate reflection the actual return that an investor will receive in all cases. A positive distribution yield does not imply a positive return. Yield to maturity is the rate of return anticipated on a bond if it is held until the maturity date. Calculation assumes that all coupons are invested at the same rate.
  4. Source: Global high yield bonds and global investment grade bonds default rate are sourced from Moody’s Investor Services, as of 31 December 2019. Preferred Securities default rate from 1990-2017 was calculated by Wells Fargo. Beginning in 2018 Manulife Investment Management used the ICE BofAML US All Capital Securities Index to calculate the annual default since Wells Fargo stopped providing related information after 2017. As of 31 December 2019. Past performance is not indicative of future performance.
  5. Source: Manulife Investment Management, as of 1 April 2021, refers only to Class AA (USD) MDIST(G). Annualised yield = [(1+distribution per unit/ex-dividend NAV) distribution frequency per annum]–1, the annualised dividend yield is calculated on the basis of the latest relevant dividend distribution and dividend reinvested, and may be higher or lower than the actual annual dividend yield. Please note that dividend is not guaranteed, and a positive dividend yield does not imply a positive return. Past performance is not indicative of future performance.
  6. Total is comprised of investment professionals of Manulife Investment Management, Manulife-TEDA Fund Management Co. Ltd., a 49% joint venture is a joint venture between Manulife Financial and Northern  International Trust, part of the Tianjin TEDA Investment Holding Co. Ltd. (TEDA), and Mahindra Manulife Investment Management Private Limited, a 49% joint venture of Manulife and Mahindra AMC. As of 30 September 2020.
  7. Source: Manulife Investment Management. Data as of 31 December 2020.

Unless otherwise stated, all information sources are from Manulife Investment Management, as of 31 March 2021. A widespread health crisis such as a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, and affect fund performance. For example, the novel coronavirus disease (COVID-19) has resulted in significant disruptions to global business activity. The impact of a health crisis and other epidemics and pandemics that may arise in the future, could affect the global economy in ways that cannot necessarily be foreseen at the present time. A health crisis may exacerbate other pre-existing political, social and economic risks. Any such impact could adversely affect the fund's performance, resulting in losses to your investment. The information in this material may contain projections or other forward-looking statements regarding future events, targets, management discipline or other expectations, and is only as current as of the date indicated. There is no assurance that such events will occur, and may be significantly different than that shown here . Past performance is not indicative of future performance. Information about the asset allocation is historical and is not an indication of the future composition.

Issued by Manulife Investment Management (Hong Kong) Limited.

This material has not been reviewed by the Securities and Futures Commission (SFC).

 

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