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On Jun 25, we issued an update research report on Canadian life insurer, Manulife Financial Corp. (MFC - Analyst Report).

Manulife is one of the dominant life insurers within its domestic market and is working diligently to grow its Asian business as well as wealth and asset management business around the world. The company also aims sustained earnings in the U.S. where it is better known by the brand name John Hancock.

The company’s presence in Asia, which dates back to over a century ago, gives it a competitive advantage. Changing demographics have fueled the demand for insurance and wealth management products in these regions and the company will likely benefit from its longstanding presence there. In 2013, the company witnessed record wealth sales, which were up almost 60%.  

Manulife is aggressively growing its wealth and asset management business around the world. It has seen continued strong mutual fund sales growth at a CAGR of 39% from 2010 to 2013. In the first quarter of 2014, the company reported record funds under management. This marked the 22nd consecutive quarterly increase for the company’s funds under management.

Manulife retains a high quality investment portfolio. Its invested assets are highly diversified by sector and geography and have limited exposure to the high-risk areas. We continue to view the company’s investment management as a significant competitive advantage.

We, however, cannot ignore the fact that Manulife’s business exposes it to market volatility. Though the company is effectively building its hedging program to decrease both interest rate and equity market exposure, a threat to earnings is still in place.

Manulife currently carries a Zacks Rank #3 (Hold).

Other stocks

Better-ranked players from the same industry include Sun Life Financial Inc. (SLF - Analyst Report), Lincoln National Corp. (LNC - Analyst Report) and China Life Insurance Co. Ltd. (LFC - Analyst Report). All these stocks hold a Zacks Rank #2 (Buy).
 

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