Peso Balanced Fund: Investment Objective

(An investment fund option for Affluence, Affluence Gold and Affluence Builder
variable life insurance products of The Manufacturers Life Insurance Co., (Phils), Inc.)
Investment Objective
The Fund seeks to achieve long-term capital growth through investments in diversified portfolios of peso-denominated fixed income securities and securities
listed on the Philippine Stock Exchange and/or pooled fund/s that invest in these securities and other liquid fixed income instruments.
Fund Information
Inception date Fund size Fund currency Dealing/valuation
J uly 2013 PHP 158.14 million Philippine peso Daily
Price (NAV/unit) Management fee
PHP 0.985 2.00% per annum
Performance Returns (28 February 2014)
1 Month YTD 1 Year 3 Year 5 Year Since Inception
3.47% 3.25% n.a n.a n.a -1.50%
n.a n.a n.a n.a
Daily Net Asset Value per Unit Top Five Holdings
FXTN 12/16/35 7.9% PLDT 9.9%
RTB 03/01/32 7.7% SM Investments 8.8%
FXTN 09/04/16 7.3% Ayala Land, Inc. 8.8%
FXTN 11/22/19 7.1% BPI 5.6%
FXTN 01/19/22 7.0% Ayala Corp. 5.6%
Notes:
FXTN - Fixed Treasury Notes or Peso-denominated debts of the Philippine Government
RTB - Retail Treasury Bonds of the Philippine Government
Monthly Performance Portfolio Breakdown
BondPool 48.5% 76,865,172.63
Equity Pool 51.5% 81,496,513.90
158,361,686.53
*Market Indicator =50% HSBC Liquid Total Return +50% Philippine Stock Exchange Index
As of February 28, 2014, 50% of the subscription was invested in the Bond Pool and 50% in the Equity Pool. The investments of the Peso Bond Pool and Equity Pool consist of the following:
* Peso Bond Pool: Peso-denominated bonds of the Republic of the Philippines and term deposits.
* Equity Pool: Various stocks listed on the Philippine Stock Exchange and term deposits.
February 28, 2014
Peso Balanced Fund
Bond Pool Equity Pool
Peso Balanced Fund
(net of management fees)
Absolute
Annualized n.a
Bond Pool
48.5%
Equity Pool
51.5%
Asset Allocation (at Market Value)
0.90
0.95
1.00
1.05
1.10
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
Affluence MI*
Peso Balanced Fund | Page 1 of 2
Peso Balanced Fund
Market Review
Market Outlook
The Investment Fund ("Fund") mentioned in this document is specific to variable life insurance contracts and is not considered a mutual fund. The return on the investment in
the Fund depends on many factors that include interest and foreign exchange rate levels, both of which may fluctuate. There are also other factors that may cause a change in
the value of the securities such as changes in the credit standing of the issuers, which cannot be guaranteed. ALL INVESTMENT RISKS, GAINS AND LOSSES, IF ANY,
SHALL BE FOR THE ACCOUNT OF THE VARIABLE LIFE POLICYHOLDER. Past performance of the Fund is not necessarily indicative of future performance. YIELDS ON
INVESTMENT IN THE FUND ARE NOT GUARANTEED.
Important Information: This report is prepared by The Manufacturers Life Insurance Co. (Philippines), Inc. and is provided for information purposes only. We have
tried our best to ensure accuracy of this document, however, errors and omissions may still have occurred in its preparation. This document does not intend to solicit
or recommend any action based on the information given. Prospective investors must rely on their own examination of the merits and risks involved in making
investment decisions. Any opinions expressed in this document may be subject to change without notice. Manulife and the block design are registered service marks
and trademarks of The Manufacturers Life Insurance Company and used by it and its affiliates including Manulife Financial Corporation.
February 28, 2014
The local fixed income market recovered in the month of February with yields falling 13 basis points on the average. Lower U.S. Treasury yields and stronger peso
boosted investors' sentiment. U.S. Treasury yields declined amid generally soft economic data, which was attributed mainly to the severe winter. The peso gained
strength in line with the movement of most Asian currencies.
The improved sentiment caused average daily trading volume in the local bond market to rise by 41% month-on-month. However, investors remained cautious, as
evidenced by the concentration of trades in shorter duration bonds and the oversubscription to a re-issued 5-year bond, which attracted tenders of close to Php 40
billion, significantly higher than the Php 25 billion offer size.
Although headline inflation inched up in J anuary to 4.2% from 4.1%, it remained well within the target range of the Bangko Sentral ng Pilipinas (BSP). Given that the
rise in inflation was mainly driven by supply-side disruptions, the BSP kept its key rates unchanged and adjusted downwards its inflation forecast this year to 4.3%
from 4.5%.
On the equity side, the PSEi advanced 6.35% in February to close the month at 6,424.99. The rally pushed year-to-date gains to 9.09%, putting the country in the top
spot in terms of price return versus Asia peers. Philippine equities continued its ascent for the second consecutive month as strong macro and micro economic data
were reflected in the initial release of fourth quarter corporate earnings. A third of the PSEi constituents have reported fourth quarter results, with aggregate earnings
coming in slightly better than projections. Optimism was also evident in the improved liquidity with daily turnover reaching a three-month high of US$152.1 million.
Foreign investors also made net purchases of US$72.0 million worth of shares, a reversal from the six consecutive months of net foreign selling that led to an outflow
of US$1.04 billion.
We expect yields on the short-end of the ROP curve to remain anchored by the Feds strong commitment to promote U.S. growth by keeping its policy rate low. On
the other hand, yields on the long-end of the curve could remain volatile due to lingering concerns on the effect of QE3 tapering on the economic growth of emerging
markets. We shall continue to maintain our shorter duration bias while increasing our exposure to the intermediate parts of the ROP yield curve to manage the impact
of possible negative price actions if the cutback in liquidity injections by the Fed is not offset by stronger U.S. economic growth.
Peso Balanced Fund | Page 2 of 2
The Fund seeks to achieve a stable and long-term growth by investing in government securities and/or high quality corporate debt securities and/or
pooled fund/s that invest in these securities and other liquid fixed income instruments.
Fund Information
April 2004 Php 660.23 million Philippine peso Daily
0.44% -1.86% 3.09% 41.23% 56.00% 153.50%
3.09% 12.19% 9.30% 9.83%
FXTN 12/16/35 7.9% FXTN 09/04/16 33.6%
RTB 03/01/32 7.7% FXTN 04/25/16 30.0%
FXTN 09/04/16 7.3% FXTN 01/27/16 18.2%
FXTN 11/22/19 7.1% FXTN 05/13/15 4.4%
FXTN 01/19/22 7.0% RTB 08/19/15 3.4%
Notes:
RTB - Retail Treasury Bonds of the Philippine Government
Short-Term Bond Pool 8.1%
Bond Pool 91.9%
*Market Indicator =90% HSBC Liquid Total Return +10% HSBC 1-3 Yr Total Return
* Peso Bond Pool: Peso-denominated bonds of the Republic of the Philippines and termdeposits.
* Short TermBond Pool: Peso-denominated bonds of the Republic of the Philippines with a termof up to three years and termdeposits.
consist of the following:
As of February 28, 2014, 90% of the subscription was invested in the Bond Pool and 10% in the Short-TermBond Pool. The investments of the Peso Bond Pool and Short TermBond Pood
Bond Pool Short-Term Bond Pool
660,982,553.43
February 28, 2014
Peso Bond Fund
Absolute
Annualized not applicable
Peso Bond Fund
53,721,372.40
607,261,181.03
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Affluence MI*
Short-Term
Bond Pool
8.1%
Bond Pool
91.9%
1.00
1.20
1.40
1.60
1.80
2.00
2.20
2.40
2.60
2.80
3.00
Peso Bond Fund | Page 1 of 2
Peso Bond Fund
Market Review
Market Outlook
February 28, 2014
The local bond market recovered in the month of February with yields falling 13 basis points on the average. Lower U.S.
Treasury yields and stronger peso boosted investors' sentiment. U.S. Treasury yields declined amid generally soft economic
data, which was attributed mainly to the severe winter. The peso gained strength in line with the movement of most Asian
currencies.
The improved sentiment caused average daily trading volume in the local bond market to rise by 41% month-on-month.
However, investors remained cautious, as evidenced by the concentration of trades in shorter duration bonds and the
oversubscription to a re-issued 5-year bond, which attracted tenders of close to Php40 billion, significantly higher than the
Php25 billion offer size.
Although headline inflation inched up in J anuary to 4.2% from 4.1%, it remained well within the target range of the Bangko
Sentral ng Pilipinas (BSP). Given that the rise in inflation was mainly driven by supply-side disruptions, the BSP kept its key
rates unchanged and adjusted downwards its inflation forecast this year to 4.3% from 4.5%.
The Investment Fund ("Fund") mentioned in this document is specific to variable life insurance contracts and is not considered a mutual fund. The return on the
investment in the Fund depends on many factors that include interest and foreign exchange rate levels, both of which may fluctuate. There are also other factors that
may cause a change in the value of the securities such as changes in the credit standing of the issuers, which cannot be guaranteed. ALL INVESTMENT RISKS,
GAINS AND LOSSES, IF ANY, SHALL BE FOR THE ACCOUNT OF THE VARIABLE LIFE POLICYHOLDER. Past performance of the Fund is not necessarily
indicative of future performance. YIELDS ON INVESTMENT IN THE FUND ARE NOT GUARANTEED.
Barring significant external shocks, we expect local bonds to ease in the near term following the reversal of upward trend of
inflation. The key risk to our outlook is the possible resumption of turbulence across emerging markets if economic imbalances
depress sharply the growth prospects of emerging markets to the point of triggering a risk-off sentiment. We shall continue to
keep a shorter duration bias while increasing exposure to the parts of the local bond yield curve that offer attractive relative
values.
Important Information: This report is prepared by The Manufacturers Life Insurance Co. (Philippines), Inc. and is provided for information purposes only. We have tried
our best to ensure accuracy of this document, however, errors and omissions may still have occurred in its preparation. This document does not intend to solicit or
recommend any action based on the information given. Prospective investors must rely on their own examination of the merits and risks involved in making investment
decisions. Any opinions expressed in this document may be subject to change without notice. Manulife and the block design are registered service marks and
trademarks of The Manufacturers Life Insurance Company and used by it and its affiliates including Manulife Financial Corporation.
Peso Bond Fund | Page 2 of 2
The Fund seeks to achieve long-term capital appreciation by investing in stocks listed on the Philippine Stock Exchange, government
securities and/or pooled fund/s that invest in these securities and other liquid instruments.
Fund Information
September 2007 Php 799.43 million Philippine peso Daily
6.62% 8.88% -3.08% 72.30% 202.58% 110.90%
-3.08% 19.89% 24.79% 12.18%
PLDT 9.9%
SM Investments 8.8%
Ayala Land, Inc. 8.8%
BPI 5.6%
Ayala Corp. 5.6%
Equity Pool 100.0%
*Market Indicator =100% Philippine Stock Exchange Index
Peso Equity Fund
not applicable
Absolute
February 28, 2014
Peso Equity Fund
As of February 28, 2014, 100% of the subscription was invested in the Equity Pool. The investments of the Equity Pool consist of stocks listed on the Philippine Stock Exchange and termdeposits.
Annualized
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Affluence MI*
Equity Pool
100%
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
2.20
2.40
2.60
Peso Equity Fund | Page 1 of 2
Peso Equity Fund
Market Review
Market Outlook
The PSEi advanced 6.35% in February to close the month at 6,424.99. The rally pushed year-to-date gains to 9.09%, putting the country in
the top spot in terms of price return versus Asia peers. Philippine equities continued its ascent for the second consecutive month as the
strong macroeconomic data was reflected in the initial release of fourth quarter corporate earnings. A third of the PSEi constituents have
reported fourth quarter results, with aggregate earnings coming in slightly better than projections.
Optimism from the recent round of strong macro and micro data was also evident in the equity markets improved liquidity. Daily turnover
reached a three-month high of US$152.1 million. Foreign investors also made net purchases of US$72.0 million worth of shares. This was a
reversal from the six consecutive months of net foreign selling that led to an outflow of US$1.04 billion from the equity market.
Strong performance was skewed towards sectors that released robust earnings growth. The Industrial sector (+11.7%) led all gainers as
consumer-related companies Universal Robina Corp. (+18.5%) and J ollibee Foods Corp. (+12.5%) reported strong revenue growth and
healthy margins. The Property industry (+7.5%) also benefited from the positive results of Ayala Land Inc. (+16.4%). Meanwhile, the MSCI
Index rebalancing led to strong foreign fund flows in select companies. J G Summit (+19.0%) was the best performing stock following a
significant increase in its MSCI Index weight while ICTSI (-1.5%) fell on the reduction of its MSCI Index weight.
We expect the local economic growth momentum to be sustained in 2014, driven by solid private consumption and higher infrastructure
spending. The Bangko Sentral ng Pilipinas (BSP) is likely to maintain its accommodative monetary stance if inflation outlook remains
manageable.
Despite the equity markets recent rally, valuations remain below the peak levels recorded last year. The market could re-rate further if
earnings guidance for 2014-2015 would be revised upwards. While heightened volatility could persist in the near term, this could provide
better entry points for companies that have sound business model and visible earnings story. We shall continue to take advantage of buying
opportunities as they emerge. The key themes for this year include the vibrant consumer and property sectors, which benefit from rising
GDP per capita while tourism and gaming industries are among the bright spots as they are supported by government initiatives.
February 28, 2014
Peso Equity Fund | Page 2 of 2
The Fund seeks to achieve long-term growth by investing in government securities and/or high quality corporate debt securities, stocks listed on the
Philippine Stock Exchange and/or in pooled fund/s that invest in these securities and other liquid fixed income instruments.
Fund Information
April 2004 Php 559.50 million Philippine peso Daily
1.78% 0.51% 1.34% 42.19% 70.18% 156.80%
1.34% 12.45% 11.22% 9.98%
Bond Pool Equity Pool
FXTN 12/16/35 7.9% PLDT 9.9%
RTB 03/01/32 7.7% SM Investments 8.8%
FXTN 09/04/16 7.3% Ayala Land, Inc. 8.8%
FXTN 11/22/19 7.1% BPI 5.6%
FXTN 01/19/22 7.0% Ayala Corp. 5.6%
Short Term Bond Pool
FXTN 09/04/16 33.6% FXTN 05/13/15 4.4%
FXTN 04/25/16 30.0% RTB 08/19/15 3.4%
FXTN 01/27/16 18.2%
Notes: RTB - Retail Treasury Bonds of the Philippine Government
Bond Pool 61.5%
Equity Pool 21.6%
Short-Term Bond Pool 16.9%
*Market Indicator =90% HSBC Liquid Total Return +10% HSBC 1-3 Yr Total Return +20% Philippine Stock Exchange Index
* Peso Bond Pool: Peso-denominated bonds of the Republic of the Philippines and termdeposits.
* Short TermBond Pool: Peso-denominated bonds of the Republic of the Philippines with a termof up to three years and termdeposits.
* Equity Pool: Various stocks listed on the Philippine Stock Exchange and termdeposits
Peso Stable Fund
As of February 28, 2014, 60% of the subscription was invested in the Bond Pool, 20% in the Short-TermBond Pool and 20% in the Equity Pool. The investments of the Peso Bond Pool,
Short-TermBond Pool and Equity Pool consist of the following:
129,706,672.56
101,661,067.56
368,918,212.66
600,285,952.78
February 28, 2014
Peso Stable Fund
not applicable
Absolute
Annualized
Monthly Performance
Bond Pool
61.5%
Equity Pool
21.6%
Short-TermBond
Pool
16.9%
1.00
1.20
1.40
1.60
1.80
2.00
2.20
2.40
2.60
2.80
3.00
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Affluence MI*
Peso Stable Fund | Page 1 of 2
Peso Stable Fund
Market Review
Market Outlook
The local fixed income market recovered in the month of February with yields falling 13 basis points on the average. Lower U.S. Treasury yields and stronger
peso boosted investors' sentiment. U.S. Treasury yields declined amid generally soft economic data, which was attributed mainly to the severe winter. The
peso gained strength in line with the movement of most Asian currencies.
The improved sentiment caused average daily trading volume in the local bond market to rise by 41% month-on-month. However, investors remained
cautious, as evidenced by the concentration of trades in shorter duration bonds and the oversubscription to a re-issued 5-year bond, which attracted tenders of
close to Php 40 billion, significantly higher than the Php 25 billion offer size.
Although headline inflation inched up in J anuary to 4.2% from 4.1%, it remained well within the target range of the Bangko Sentral ng Pilipinas (BSP). Given
that the rise in inflation was mainly driven by supply-side disruptions, the BSP kept its key rates unchanged and adjusted downwards its inflation forecast this
year to 4.3% from 4.5%.
On the equity side, the PSEi advanced 6.35% in February to close the month at 6,424.99. The rally pushed year-to-date gains to 9.09%, putting the country in
the top spot in terms of price return versus Asia peers. Philippine equities continued its ascent for the second consecutive month as strong macro and micro
economic data were reflected in the initial release of fourth quarter corporate earnings. A third of the PSEi constituents have reported fourth quarter results,
with aggregate earnings coming in slightly better than projections. Optimism was also evident in the improved liquidity with daily turnover reaching a three-
month high of US$152.1 million. Foreign investors also made net purchases of US$72.0 million worth of shares, a reversal from the six consecutive months of
net foreign selling that led to an outflow of US$1.04 billion.
We expect the local economic growth momentum to be sustained in 2014, driven by solid private consumption and higher infrastructure spending. The BSP is
likely to maintain its accommodative monetary stance if inflation outlook remains manageable.
Local bonds are likely to ease in the near term following the reversal of upward trend of inflation. The key risk to our outlook is the possible resumption of
turbulence across emerging markets if economic imbalances depress sharply the growth prospects of emerging markets. We shall continue to keep a shorter
duration bias while increasing exposure to the parts of the local bond yield curve that offer attractive relative values.
Despite the equity markets recent rally, valuations remain below the peak levels recorded last year. The market could re-rate further if earnings guidance for
2014-2015 would be revised upwards. While heightened volatility could persist in the near term, this could provide better entry points for companies that have
sound business model and visible earnings story. We shall continue to take advantage of buying opportunities as they emerge. The key themes for this year
include the vibrant consumer and property sectors, which benefit from rising GDP per capita while tourism and gaming industries are among the bright spots
as they are supported by government initiatives.
February 28, 2014
Peso Stable Fund | Page 2 of 2
The Fund seeks to achieve long-term capital appreciation by investing in USD denominated sovereign and corporate debt securities and/or pooled fund/s
that invest in these securities and other liquid instruments.
Fund Information
November 2004 USD 11.46 million US Dollar Daily
$1.967 1.75% per annum
1.55% 1.65% -5.61% 16.46% 49.02% 96.70%
-5.61% 5.21% 8.30% 7.55%
ROP 25 8.5%
ROP 21 7.3%
ROP 31 7.0%
ROP 30 7.0%
ROP 16n 6.7%
Notes:
*ROP - Republic of the Philippines dollar-denominated bonds
USD Bond Pool 100%
Monthly Performance
*Market Indicator =100% HSBC Bond Index Philippines
* USD Bond Pool: US$-denominated bonds of the Republic of the Philippines, corporates and termdeposits.
February 28, 2014
USD Bond Fund
As of February 28, 2014, 100% of the subscription was invested in the USD Bond Pool. The investments of the USD Bond Pool consist of the following:
USD Bond Fund
Absolute
Annualized not applicable
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
Affluence MI*
USD Bond
Pool,
100%
0.90
1.10
1.30
1.50
1.70
1.90
2.10
2.30
USD Bond Fund | Page 1 of 2
USD Bond Fund
Market Review
Market Outlook
Important Information: This report is prepared by The Manufacturers Life Insurance Co. (Philippines), Inc. and is provided for information purposes only. We
have tried our best to ensure accuracy of this document, however, errors and omissions may still have occurred in its preparation. This document does not
intend to solicit or recommend any action based on the information given. Prospective investors must rely on their own examination of the merits and risks
involved in making investment decisions. Any opinions expressed in this document may be subject to change without notice. Manulife and the block design are
registered service marks and trademarks of The Manufacturers Life Insurance Company and used by it and its affiliates including Manulife Financial
Corporation.
Philippine dollar-denominated bond (ROP) prices rose in line with the movement of U.S. Treasury prices. U.S. Treasury prices moved higher
largely due to generally disappointing U.S. economic data, which was attributed mainly to the disruptive and prolonged winter. Softer
economic data stoked expectations that the U.S. Federal Reserve (Fed) may not need to exit abruptly from its highly accommodative
monetary policy.
The harshest U.S. winter on record combined with limited supply, stricter credit policies, and waning affordability caused the housing
market to remain despondent this month. The pace of U.S. home construction declined by more than forecast on the inability of contractors
to break new ground, while sales of previously owned homes dropped to the lowest level in a year on slower demand from home buyers.
The U.S. labor market remained dismal with a gain of only 113,000 in J anuary following a revised gain of 75,000 in December last year. Non-
farm payrolls (NFP) in the U.S. rose less than forecast as retailers cut back on hiring after the holiday season ended. However, despite the
lower NFP data, the unemployment rate continued to decline to 6.6% in J anuary from 6.7% in December. The uneven progress in the labor
market also dampened sales of U.S. retailers in J anuary, reinforcing signs that the U.S. economy may have been off to a slow start in 2014.
In spite of a slew of generally weaker economic data in the past couple of months, the Fed communicated its intentions to maintain the
measured trimming of its asset purchases under its latest quantitative easing program (QE3). The Fed indicated that unless economic data
points to a potential stagnation of the U.S. economy, there would be no immediate need to change its current tapering stance for QE3. In a
meeting with other G-20 countries, the Fed indicated its commitment to be mindful of the possible repercussions of any change in U.S.
monetary settings on emerging markets.
We expect yields on the short-end of the ROP curve to remain anchored by the Feds strong commitment to promote U.S. growth by keeping
its policy rate low. On the other hand, yields on the long-end of the curve could remain volatile due to lingering concerns on the effect of
QE3 tapering on the economic growth of emerging markets. We shall continue to maintain our shorter duration bias while increasing our
exposure to the intermediate parts of the ROP yield curve to manage the impact of possible negative price actions if the cutback in liquidity
injections by the Fed is not offset by stronger U.S. economic growth.
February 28, 2014
USD Bond Fund | Page 2 of 2

Peso Balanced Fund: Investment Objective

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(An investment fund option for Affluence, Affluence Gold and Affluence Builder

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