MLI E&P INTERMEDIATE TERM
BOND FUND
(POOLED FUND)
AS OF DECEMBER 31, 2000
OBJECTIVE
The Fund seeks to achieve a reasonably high return and constant income. The Fund invests mainly in Canadian
government bonds. The Fund is actively managed by varying the average maturity of the bonds depending on the
Fund Manager's outlook on the economy. The Fund's policy is to have a duration of between 3 and 10 years.
MARKET VALUE OF ASSETS CURRENT QUARTER
$CDN 119.7 MILLION
MARKET VALUE OF ASSETS PREVIOUS QUARTER
$CDN 124.2 MILLION
ASSET ALLOCATION
TOP 10 HOLDINGS
Short Term
1.9%
Federal
26.7%
Provincial/State
34.3%
Private
Placements
0.6%
Asset
Backed
Securities Corporate
0.5%
Investment
Grade
36.0%
ISSUER
COUPON
MATURITY
% OF
FUND
GOVERNMENT OF CANADA
CANADA MORT& HSNG CORP
GOVERNMENT OF CANADA
INTERPROVINCIAL PIPELINE INC
NEW BRUNSWICK
MANITOBA
SASKATCHEWAN
ONTARIO
BRITISH COLUMBIA
NORWEST FIN CANADA INC
10.25
6.25
9.00
8.45
6.75
4.75
6.15
4.88
9.00
5.60
15-Mar-14
01-Dec-05
01-Dec-04
18-May-05
27-Jun-17
15-Jul-03
01-Sep-10
02-Jun-04
09-Jan-02
01-Jun-04
5.4
5.2
4.0
3.3
3.2
3.0
3.0
2.9
2.9
2.6
PORTFOLIO CHARACTERISTICS
PERFORMANCE as of December 31, 2000
3 Mth
YTD
1 Yr
3 Yr
5 Yr
MLI E&P Intermediate Term Bond Fund (%)
3.32
10.58
10.58
N/A
N/A
Scotia Capital Universe (%)
2.87
10.25
10.25
N/A
N/A
6
33
33
N/A
N/A
PalTrak Cdn Bond Percentile
ASSOCIATED CLIENTS
PORTFOLIO MANAGER
Modified Duration
5.72 yrs
Average Coupon
6.87 %
Average Credit Quality
SRS/ Group Pension - Canadian Division
Underlying Fund for the AA Funds
FUND REFERENCES
State Street ID
Gary Stewart
FRI
COMPANY
MAXIMIS NAME
01 The Manufacturers Life Insurance Company
Corporate Bond Fund
19
AA
2H4I
2082A
Legal ID
0001
Maximis ID
M002
MLI E&P INTERMEDIATE TERM
BOND FUND
(POOLED FUND)
AS OF DECEMBER 31, 2000
MANAGEMENT STYLE
The management style employed is termed "structured active". This is a dynamic cross between a purely quantitative
style of interest rate risk management, and a more traditional interest rate anticipation approach to fixed income
portfolio management. Active credit, industry, and sector management combined with a dynamic approach to yield
curve management and interest rate anticipation are the cornerstones of this approach.
FUND MANAGER COMMENTARY
The yield curve steepened during the fourth quarter as long term yields declined by 8 basis points, while ten-year
yields dropped by 34 basis points. Fixed income investors believed that the U.S. Federal Reserve would drop interest
rates in reaction to the slowing economy. U.S. housing, consumption and job growth have moderated notably from the
rapid pace of the first half of the year. Despite the higher oil prices that have impacted the market for most of the year,
inflation expectations remain fairly low. U.S. productivity growth continues to show impressive gains, which should help
control inflationary pressures. The wealth effect of the stock market, which has contributed to strong demand in
previous years, has been rapidly eroding, thus dampening final demand in the economy.
The bond market continues to trade at the higher end of the recent trading range, as investors believe that an
economic slowdown will lead to further rate declines in the market. There is a developing belief that the U.S. economy
may slip into a recession, which would have a significant impact on the Canadian economy. The deterioration of the
stock market, particularly in the technology sector, has contributed to the negative sentiment in the market.
The Fund benefited from the declining interest rate environment as it held a duration slightly longer than the
benchmark. Opportunities to extend the duration of the portfolio will be taken when market conditions are appropriate.
The corporate and provincial sectors maintained an overweight position relative to the benchmark. Provincial bonds
were the best performing sector during the quarter, while corporate bonds under-performed.
FUNDS THAT BUY UNITS OF THE MLI E&P INTERMEDIATE TERM BOND FUND
Fund Name
Maximis
Legal ID
Cdn Div System Code
State Street ID
FRI
Manulife Bond (MLI Bond)
S056
2056
SBND
NU3F
2056
Manulife Corporate Bond
S082
2082
154
NU3J
Manulife Canadian Bond
E092
2092
126/SCBF
NU4V
Cdn Bonds/NAL Inv. Bond
E093
2093
990
861
20