Group Investment Report

December 31, 2005 Table of Contents

PAGE

The Importance of Diversification 3

Asset Classes 4

Investment Platform - Style Grid 5

Volatility Rating Overview 6

Fund Managers 8

Rates of Return Overview 10

How to Read Fund Descriptions 12

Funds Available

Asset Allocation 14

Guaranteed Interest Accounts and Money Market 25

Fixed Income 28

Balanced 34 Balanced Global Balanced

Canadian Equity 44 Canadian Large Cap Equity Canadian Small/Mid Cap Equity

U.S. Equity 58 U.S. Large Cap Equity

International/Global Equity 65

Investment Watch (i-Watch) 73

Statement of Investment Policies, Procedures and Goals 74

2 The Importance of Diversification

Diversification is the key to a well-balanced portfolio; it is perhaps the most important consideration when choosing where to invest your money.

Why should you diversify your investment portfolio?

Have you ever heard the saying “don’t put all your eggs in one basket?” If you apply that same philosophy to investing, it means don't invest all your money in one fund or market. It’s difficult to accurately predict how individual funds or markets will perform over time. A well-diversified portfolio offers you the opportunity to achieve better returns on your investments with less risk, helping you reach your long-term retirement savings goals.

When creating your investment portfolio, take these factors into consideration: asset class, volatility and fund managers.

To help ensure you are developing a diversified investment portfolio, ask yourself these questions:

1. Is my money invested in more than one asset class? of returns it has experienced over the time period under consideration. Although a fund’s historical volatility is not An asset class is an investment type defined by the necessarily an accurate indication of future volatility, it nature of securities held within a mutual or pooled fund. does provide some valuable insight into the level of risk For example, broad asset classes include Canadian Bond, associated with the fund. The Volatility Rating Canadian Equity, U.S. Equity and International/Global Overview on pages 6 – 7 show how different funds Equity. Predicting the best performing asset class (such as rank relative to the other funds in your plan. Canadian Bond, U.S. Equity) with any degree of success is extremely difficult. If you diversify your portfolio by 3. What are fund managers doing to ensure the fund asset class, you decrease the chance of losing a large I invest in is meeting its stated objectives? amount of your investment if an event in the market Fund managers typically differentiate themselves affects one asset class adversely. Refer to page 4 for through the application of distinct investment more information on Manulife asset classes. approaches and expertise, often known as fund manager style. Investing with more than one fund 2. How volatile are the funds I’m invested in? manager allows you to take advantage of managers’ Volatility is the fluctuation of a fund’s performance – up distinct approaches to investing. Diversifying by fund or down – based on its historical monthly track record. manager is a good way to ensure you are benefitting Where available, Manulife discloses the volatility of funds from the range of opportunities available to help your based on the last three years’ worth of performance retirement savings grow. The fund manager for each data. The greater a fund’s volatility, the greater the range fund is listed on the corresponding fund page.

Achieving the right balance between asset class, volatility and fund managers in your investment portfolio can help you reach your retirement savings goal.

3 Asset Classes

Each asset class is represented by a different colour. The fund pages in this Group Investment Report and on Manulife's website are colour- coded to reflect the asset class they represent.

ASSET ALLOCATION: A fund that invests in a diverse CANADIAN LARGE CAP EQUITY: A fund that invests range of asset classes, investor styles and fund primarily in shares of companies incorporated in managers with the goal of maximizing expected return Canada. While the fund may hold some shares of small while minimizing volatility for each investor profile. companies, it invests primarily in medium to large companies listed on Canadian stock exchanges. GUARANTEED INTEREST ACCOUNT: A fund that earns a fixed interest rate from the date of deposit until CANADIAN SMALL/MID CAP EQUITY: A fund that the date of maturity. The interest rate is determined on invests primarily in shares of small and medium the date of deposit and does not change. companies incorporated in Canada.

MONEY MARKET: A fund that invests in short-term U.S. LARGE CAP EQUITY: A fund that invests primarily securities. in shares of companies incorporated in the U.S. While the fund may hold some shares of small companies, the FIXED INCOME: A fund that invests in fixed income fund invests primarily in medium to large companies. securities that pay interest, such as corporate and government bonds. The interest rate earned is more INTERNATIONAL EQUITY: A fund that invests commonly referred to as a ‘coupon rate’ and is primarily in shares of companies incorporated outside expressed as a percentage. North America.

BALANCED: A fund that invests primarily in a GLOBAL EQUITY: A fund that invests in shares of combination of common and preferred stocks, bonds companies incorporated in one of the following three and short-term securities. A typical balanced fund geographic regions – Asia, Europe and the Americas. concentrates on capital preservation and growth while mitigating risk.

GLOBAL BALANCED: A fund that invests in a combination of common and preferred stocks, bonds and short-term securities worldwide with the goal of providing a balance between capital preservation and growth while minimizing excessive risk.

4 Investment Platform – Style Grid Index 7132 Manulife MFC Global Pooled Canadian Index Fund U.S. 8131 Manulife MFC Global Pooled Index Fund 8321 Manulife BGI International Equity Index Fund Index Canadian Bond Index Fund 4191 Manulife MFC Global Pooled Sector Rotator Top 7192 Manulife Canadian Large Cap Down Equity Fund (Zechner) 2101 Manulife Conservative Index Asset Allocation Fund Asset Index 2101 Manulife Conservative Allocation Fund Asset Index 2102 Manulife Moderate Allocation Fund Asset 2103 Manulife Balanced Index 2104 Manulife Growth Index Asset Allocation Fund 2105 Manulife Aggressive Index Asset Allocation Fund Sector Trading 4131 Manulife Canadian Bond Fund (MFC) Value Monthly 5132 Manulife Elliott & Page High Income Fund Income Growth Trimark 5181 Manulife Fund 7131 Manulife Canadian Large Cap Equity Fund (MFC) Value Canadian Fund Trimark 7181 Manulife 7351 Manulife Maxxum Dividend Growth Fund (Mackenzie) 7191 Manulife Canadian Small Cap Equity Fund (Tattersall) 8191 Manulife U.S. Equity Fund (Bernstein) 8261 Manulife Legg Mason U.S. Value Fund 8192 Manulife International Equity Fund (Templeton) Fund Trimark 8181 Manulife Passively Managed (Index) Passively Yield Enhancement Yield 4141 Manulife Fidelity Canadian Bond Fund Core/Blend 5162 Manulife Canadian Balanced Ethics Fund 5164 Manulife McLean Budden Balanced Fund 5171 Manulife SEAMARK Balanced Fund Fraser 5241 Manulife Jarislowsky Balanced Fund Wheeler Diversified 5301 Manulife Leith Fund Pooled 7141 Manulife Fidelity Canadian Large Cap Fund 7164 Manulife McLean Budden Canadian Equity Fund 7171 Manulife SEAMARK Canadian Equity Fund Fraser 7241 Manulife Jarislowsky Canadian Equity Fund America 8142 Manulife Fidelity Growth Fund Fraser 8241 Manulife Jarislowsky International Equity Fund 8141 Manulife Fidelity International Fund Portfolio 2001 Manulife Conservative Asset Allocation Fund Asset 2001 Manulife Conservative Allocation Fund Asset 2002 Manulife Moderate Allocation Fund Asset 2003 Manulife Balanced Allocation Fund Asset 2004 Manulife Growth Allocation Fund Asset Aggressive 2005 Manulife Short-term 3132 Manulife Canadian Money Market Rate Anticipation 4161 Manulife McLean Budden Fixed Income Fund 4171 Manulife SEAMARK Bond Fund Growth 5161 Manulife McLean Budden Balanced Growth Fund 5231 Manulife CI International Balanced Fund Canadian 7121 Manulife Elliott & Page Equity Fund 7161 Manulife McLean Budden Canadian Equity Growth Fund Growth 7122 Manulife Elliott & Page Opportunities Fund U.S. 8132 Manulife MFC Global Pooled Equity Fund 8171 Manulife SEAMARK U.S. Equity Fund 8172 Manulife SEAMARK International Equity Fund 8161 Manulife McLean Budden Global Equity Fund Actively Managed UITY UITY Q Q E CAP G MALL/MID S UITY Q E CAP G UITY Q ET ALLOCATION . LAR UITY S SS LOBAL BALANCED LOBAL E Q E A MONEY MARKET FIXED INCOME BALANCED G CANADIAN LAR CANADIAN CAP E U. E INTERNATIONAL G

6 A E S S T

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G H Volatility Rating Overview Rating Volatility 7131 Manulife Canadian Large Cap Value Equity Fund (MFC) 7164 Manulife McLean Budden Canadian Equity Fund 7132 Manulife MFC Global Pooled Canadian Index Fund 7171 Manulife SEAMARK Cana dian Equity Fund 7161 Manulife McLean Budden Canadian Equity Growth Fund

CAP EQUITY 7121 Manulife Elliott & Page Canadian Equity Fund

CANADIAN LARGE 7141 Manulife Fidelity Canadian Large Cap Fund

7192 Manulife Canadian Large Cap Top Down Equity Fund (Zechner) C 7191 Manulife Canadian Small Cap Equity Fund (Tattersall) 7122 Manulife Elliott & Page Growth Opportunities Fund CANADIAN CAP EQUITY L SMALL\ MID 8191 Manulife U.S. Equity Fund (Bernstein)

8132 Manulife MFC Global Pooled U.S. Equity Fund

8131 Manulife MFC Global Pooled U.S. Index Fund A 8142 Manulife Fidelity Growth America Fund

U.S. LARGE CAP EQUITY 8171 Manulife SEAMARK U.S. Equity Fund

S 8261 Manulife Legg Mason U.S. Value Fund

8321 Manulife BGI International Equity Index Fund 8241 Manulife Jarislowsky Fraser International Equity Fund

EQUITY 8172 Manulife SEAMARK International Equity Fund S 8192 Manulife International Equity Fund (Templeton) INTERNATIONAL INTERNATIONAL

8141 Manulife Fidelity International Portfolio Fund 8161 Manulife McLean Budden Global Equity Fund

8181 Manulife Trimark Fund GLOBAL EQUITY LOW Volatility Meter HIGH The volatility rating is based on the standard deviation of monthly returns of the fund or underlying funds over a three-year period as of December 31, 2005. Standard deviation is a measure of risk and indicates the degree to which the fund’s value has fluctuated. A fund with a high volatility has experienced more variability in month-to-month returns than a fund with low volatility. 7 Fund Managers

AIM Trimark Investments is one of Canada’s largest Elliott & Page Limited has one of the longest track investment management companies. AIM Trimark offers a records in money management in Canada. Founded in diversified suite of investment solutions to institutions, 1949, Elliott & Page is one of Canada’s oldest registered organizations, companies, high-net worth individuals and investment counsellors. Today the firm manages more than millions of investors in Canada and around the world. A $40 billion Cdn in assets, and ranks as one of the nation’s subsidiary of U.K.-based AMVESCAP PLC, which is among leading investment counselling firms. the world’s largest independent investment managers, AIM www.elliotandpage.com Trimark leverages the global expertise of several hundred AMVESCAP investment professionals worldwide. Fidelity Investments opened its Canadian operations www.aimtrimark.com in 1987 and has grown to become Canada's eighth largest mutual fund company, with more than $36 billion Sanford C. Bernstein, LLC (founded in 1967) was Cdn, as at June 30, 2005 in assets under management. acquired by Alliance Capital Management (founded in www.fidelity.ca 1971) to become AllianceBernstein in the year 2000. Both equity investment teams remain separate and distinct Franklin Templeton Investments Corp. is the entities. AllianceBernstein manages approximately $555 Canadian subsidiary of Franklin Resources, Inc., a global billion US in assets, including $342 billion US for investment management organization known as Franklin institutional clients around the world. Templeton Investments. Franklin Templeton Investments www.alliancebernstein.com Corp has assets under management of $540.2 billion Cdn, as of December 31, 2005. Barclays Global Investors (BGI) is one of the world's www.templeton.ca largest investment management firms and one of the world's largest providers of structured investment Founded in 1962 to serve private clients, Howson strategies including indexing, exchange traded funds Tattersall Investment Counsel (Howson Tattersall) has (ETFs), tactical asset allocation and quantitative active grown over the years to provide investment services to a products. BGI manages over $1.7 trillion Cdn for almost wide range of institutional investors for their pension 2700 clients in 47 countries around the world. From plans, endowments, foundations and corporate reserves. offices in Toronto and Montreal, BGI manages over In August 2003, Howson Tattersall merged with Lancet $56 billion Cdn of assets for 175 Canadian clients. These Asset Management, a subsidiary of the Canadian Medical clients include pension and savings plans, mutual fund Association (CMA). The merged firm which has its companies, governments, corporations, charitable headquarters in Toronto, Canada, continues to operate foundations & endowments and universities. under the trusted Howson Tattersall name and manages www.barclaysglobal.com over $7 billion Cdn in assets including the Saxon Mutual Funds. CI Investments was established in the early 1960s. In www.htic.ca 1994, CI Financial (then CI Fund Management Inc.) was listed on the TSX under the symbol (CIX) with assets under administration at the time of $3.7 billion Cdn. Since then, CI has grown quickly, launching new funds and products, and increasing the breadth and depth of product and portfolio management expertise available to its clients. Due to these new product launches, strong net sales and strategic acquisition, CI has grown to manage approximately $50 billion Cdn in assets as of June 30, 2005. www.cifunds.com

8 Jarislowsky Fraser Limited is a registered investment McLean Budden Limited is one of Canada's oldest counselling firm managing pension funds, pooled funds, investment counselling firms. From offices in Toronto, endowment funds, and corporate and private portfolios Montreal, Vancouver and Chicago, the firm manages over for clients in North America and Europe. The company $30 billion Cdn of pension, foundation and mutual fund was founded in 1955 as an investment research firm. In assets as well as personal wealth. the early 1960s, the firm began to use research material www.mcleanbudden.com to counsel private investors and, in 1966, extended its client base to include pension funds. Today, the firm MFC Global Investment Management has more manages investment funds on behalf of governments, than 100 years of experience managing the assets of The corporations, universities, institutions and labour unions Manufacturers Life Insurance Company and other clients. with assets exceeding $58.9 billion Cdn. In April 2004, it more than doubled its size through the www.jfl.ca merger of Manulife Financial and John Hancock Financial Services, Inc. Today it is a leading global investment Founded in 1972 and headquartered in Toronto, Legg manager, with over $240 billion Cdn ($206 billion US) in Mason Canada Inc. serves institutional and private clients assets under management as of September 30, 2005. from offices in Montreal, Toronto, Vancouver, and www.mfcglobal.com Waterloo. Legg Mason Canada serves the Canadian institutional and private client investment communities. SEAMARK Asset Management Ltd., based in Halifax, Currently, they manage $12.4 billion Cdn in assets. Nova Scotia, was founded in 1982 as Atlantic Canada's first www.leggmasoncanada.com full-service investment counsel firm. SEAMARK manages over $10 billion Cdn in assets on behalf of pensions, Leith Wheeler Investment Counsel Ltd. is a fully endowments, mutual funds and private clients. SEAMARK independent investment counsel firm based in Vancouver, has consistently been one of Canada's top performing B.C. Founded in 1982, it manages over $5 billion Cdn for investment management firms. clients including corporations, endowments and www.seamark.ca foundations. As well, they manage assets for multi- employer and union pension plans in private and public J. Zechner Associates Inc. manages money for sectors across Canada. pension funds, institutions, and mutual fund companies, www.leithwheeler.com family trust and endowments. The firm was founded in 1993 by John Zechner and is owned by its investment Mackenzie Financial Corporation is an integrated professionals. Total assets under management have grown financial services company, operating directly to over $2 billion Cdn. in North America and internationally through partner www.jzechner.com sub-advisor firms. Mackenzie offers more than 100 investment funds in Canada and the United States and manages more than $45 billion Cdn for over one million investors and their financial advisors. In addition Mackenzie and its subsidiaries offer an array of loan, deposit and other financial products and services and employ over 1,400 people. www.mackenziefinancial.com

9 Rates of Return Overview

Gross rates of return (%) as of December 31, 2005. Gross rates show rates before any management fees are deducted. ANNUALIZED RETURN ANNUAL RETURN2

Fund Year to 1 2 3 4 5 10 Page code Fund name date1 year year year year year year 2005 2004 2003 2002 2001 number ASSET ALLOCATION 2001 Manulife Conservative Asset Allocation Fund 7.8 7.8 7.5 8.2 6.4 6.1 n/a 7.8 7.3 9.5 1.1 4.9 15 2101 Manulife Conservative Index Asset Allocation Fund 7.2 7.2 6.9 7.2 5.9 5.5 n/a 7.2 6.6 7.9 2.1 3.7 16 2002 Manulife Moderate Asset Allocation Fund 9.7 9.7 9.2 10.3 7.1 6.2 n/a 9.7 8.8 12.6 -2.2 3.0 17 2102 Manulife Moderate Index Asset Allocation Fund 8.9 8.9 8.1 8.8 5.7 4.5 n/a 8.9 7.2 10.1 -3.0 0.0 18 2003 Manulife Balanced Asset Allocation Fund 11.5 11.5 10.9 12.5 7.7 6.5 n/a 11.5 10.2 15.9 -5.5 1.9 19 2103 Manulife Balanced Index Asset Allocation Fund 10.9 10.9 9.6 10.5 5.7 3.7 n/a 10.9 8.3 12.4 -7.4 -4.2 20 2004 Manulife Growth Asset Allocation Fund 13.6 13.6 12.8 15.1 8.7 7.2 n/a 13.6 12.0 19.9 -8.5 1.5 21 2104 Manulife Growth Index Asset Allocation Fund 14.8 14.8 12.5 13.9 7.1 3.9 n/a 14.8 10.3 16.7 -11.0 -7.9 22 2005 Manulife Aggressive Asset Allocation Fund 16.0 16.0 14.8 17.9 9.7 8.2 n/a 16.0 13.6 24.3 -11.5 2.2 23 2105 Manulife Aggressive Index Asset Allocation Fund 18.7 18.7 15.3 17.1 8.1 3.7 n/a 18.7 12.0 20.9 -15.0 -12.2 24 MONEY MARKET 3132 Manulife Canadian Money Market Fund (MFC) 2.8 2.8 2.6 2.7 2.7 3.2 n/a 2.8 2.4 3.0 2.8 5.2 27 Scotia Capital 91-Day Treasury Bill Index 2.6 2.6 2.4 2.6 2.6 3.0 3.8 2.6 2.3 2.9 2.5 4.7 FIXED INCOME 4131 Manulife Canadian Bond Fund (MFC)¥ 6.5 6.5 6.7 6.6 7.0 7.2 n/a 6.5 6.9 6.4 8.3 7.9 29 4141 Manulife Fidelity Canadian Bond Fund 7.1 7.1 7.2 7.4 7.8 7.9 8.0 7.1 7.3 7.7 9.0 8.2 30 4161 Manulife McLean Budden Fixed Income Fund 6.3 6.3 7.0 6.8 7.1 7.4 8.0 6.3 7.7 6.5 8.0 8.7 31 4171 Manulife SEAMARK Bond Fund 5.2 5.2 5.9 5.8 6.4 6.8 n/a 5.2 6.5 5.8 8.3 8.0 32 4191 Manulife MFC Global Pooled Canadian Bond Index Fund 6.4 6.4 6.7 6.8 7.3 7.4 n/a 6.4 7.1 6.8 9.0 8.1 33 Scotia Capital Universe Bond Index 6.5 6.5 6.8 6.8 7.3 7.4 7.7 6.5 7.1 6.7 8.7 8.1 BALANCED 5132 Manulife Elliott & Page Monthly High Income FundÞ 15.1 15.1 18.4 19.7 18.4 19.0 n/a 15.1 21.8 22.2 14.8 21.5 35 5161 Manulife McLean Budden Balanced Growth Fund 11.3 11.3 9.9 11.4 6.5 5.7 9.9 11.3 8.5 14.4 -6.9 2.8 36 5162 Manulife Canadian Balanced Ethics Fund 10.9 10.9 9.7 11.1 6.8 5.9 n/a 10.9 8.6 13.8 -5.1 2.7 37 5164 Manulife McLean Budden Balanced Fund 10.9 10.9 9.9 11.0 7.0 6.4 n/a 10.9 8.9 13.4 -4.4 4.4 38 5171 Manulife SEAMARK Balanced Fund 9.7 9.7 7.7 9.7 5.5 5.6 n/a 9.7 5.7 13.9 -6.1 5.8 39 5181 Manulife Trimark Income Growth Fund 6.8 6.8 11.2 12.3 10.1 11.2 10.9 6.8 15.8 14.5 3.8 15.6 40 5241 Manulife Jarislowsky Fraser Balanced Fund 11.3 11.3 10.4 10.3 7.7 7.0 n/a 11.3 9.6 10.1 0.2 4.3 41 5301 Manulife Leith Wheeler Diversified Pooled Fund 11.6 11.6 12.7 13.8 10.7 n/a n/a 11.6 13.9 16.1 2.0 n/a 42 Balanced Benchmark‡ 10.7 10.7 9.7 10.3 5.5 3.3 7.8 10.7 8.6 11.6 -7.9 -4.8 GLOBAL BALANCED 5231 Manulife CI International Balanced Fund 4.0 4.0 5.2 8.0 3.0 -0.9 7.5 4.0 6.4 13.9 -10.5 -15.3 43 Global Balanced Benchmark¢ 0.6 0.6 2.9 2.7 0.2 -1.1 4.9 0.6 5.2 2.5 -6.9 -6.2

1 Year to date (YTD) rates of return are not annualized. 2 The rates of return that a fund earned over a specific 12-month period. As an example: a one-year annual return as at June 2005 would measure performance from July 1, 2004 to June 30, 2005. ¥ On September 30, 2002, the underlying fund changed from Elliott & Page Pooled Bond to the Manulife Canadian Bond. Performance prior to this date was derived from the Elliott & Page Pooled Bond. Þ The Manulife Elliot & Page Monthly High Income Fund's primary objective is to provide investors with a steady flow of monthly income and capital growth. The fund invests .in a variety of equity securities, fixed income securities and income trusts. ‡ Comprised of 35% S&P/TSX Composite Index, 35% Scotia Capital Universe Bond Index (Total Return), 10% S&P 500 Index ($C), 10% MSCI EAFE Index ($C), and 10% 91-Day T-bills. ¢ Comprised of 60% MSCI World Index and 40% JP Morgan Government Bond Index. † On May 21, 2004, the underlying fund changed from the Elliott & Page Blue Chip fund to the Elliott & Page Canadian Equity Fund. Performance prior to this data was derived from the Elliott & Page Blue Chip Fund. § On September 30, 2002, the underlying fund changed from Elliot & Page Pooled Canadian Equity to Manulife Canadian Large Cap Value Equity. Performance prior to this date was derived from the Elliott & Page Pooled Canadian Equity. £ The non-shaded area represents the returns of a similarly managed fund for the period before the start date of the Manulife fund. ¤ On June 1, 2003, the underlying fund changed from the Elliott & Page Emerging Growth to Elliott & Page Growth Opportunities. Performance prior to this date was derived from the Elliott & Page Emerging Growth.

10 The investment mangement fees (IMFs) you pay appear on the secure member website at www.manulife.ca/GRO.

ANNUALIZED RETURN ANNUAL RETURN2

Fund Year to 1 2 3 4 5 10 Page code Fund name date1 year year year year year year 2005 2004 2003 2002 2001 number CANADIAN LARGE CAP EQUITY 7121 Manulife Elliott & Page Canadian Equity Fund† 24.5 24.5 20.4 20.6 10.8 6.2 n/a 24.5 16.5 20.9 -13.9 -10.5 45 7131 Manulife Canadian Large Cap Value Equity Fund (MFC)§ 24.3 24.3 22.6 23.7 15.8 11.3 n/a 24.3 20.9 26.0 -5.0 -5.2 46 7132 Manulife MFC Global Pooled Canadian Index Fund 24.2 24.2 19.2 21.6 12.0 6.5 n/a 24.2 14.5 26.6 -12.7 -12.7 47 7141 Manulife Fidelity Canadian Large Cap Fund 32.7 32.7 23.8 24.4 13.8 9.7 12.2 32.7 15.4 25.7 -12.9 -5.1 48 7161 Manulife McLean Budden Canadian Equity Growth Fund 22.9 22.9 17.2 21.6 11.4 9.3 14.5 22.9 11.8 30.7 -14.1 1.0 49 7164 Manulife McLean Budden Canadian Equity Fund 21.3 21.3 16.6 19.5 12.2 10.6 15.2 21.3 12.1 25.4 -7.1 4.7 50 7171 Manulife SEAMARK Canadian Equity Fund 19.9 19.9 14.9 18.7 12.0 11.1 n/a 19.9 10.1 26.6 -5.7 7.7 51 7181 Manulife Trimark Canadian Fund 11.3 11.3 11.3 15.2 8.7 8.2 10.5 11.3 11.2 23.4 -8.7 6.5 52 7192 Manulife Canadian Large Cap Top Down Equity Fund (Zechner) 17.3 17.3 17.2 22.1 9.0 n/a n/a 17.3 17.0 32.6 -22.5 n/a 53 7241 Manulife Jarislowsky Fraser Canadian Equity Fund 27.6 27.6 24.2 24.4 17.2 14.8 n/a 27.6 20.9 24.7 -1.9 5.5 54 7351 Manulife Maxxum Dividend Growth Fund (Mackenzie)£ 12.8 12.8 14.8 16.0 9.8 10.1 14.4 12.8 17.7 18.2 -6.8 11.5 55 S&P/TSX Composite Index 24.1 24.1 19.2 21.7 12.1 6.6 11.0 24.1 14.5 26.7 -12.4 -12.6 CANADIAN SMALL/MID CAP EQUITY 7122 Manulife Elliott & Page Growth Opportunities Fund¤ 22.3 22.3 22.2 26.0 18.3 14.0 n/a 22.3 22.1 34.1 -2.2 -1.7 56 7191 Manulife Canadian Small Cap Equity Fund (Tattersall) 15.5 15.5 16.6 22.3 16.8 18.3 n/a 15.5 17.8 34.6 1.5 24.7 57 BMO Nesbitt Burns Small Cap Index 19.7 19.7 16.9 24.9 17.9 14.8 11.3 19.7 14.1 42.7 -0.9 3.4 U.S. LARGE CAP EQUITY 8131 Manulife MFC Global Pooled U.S. Index Fund 1.3 1.3 2.1 2.9 -4.4 -4.9 n/a 1.3 2.9 4.6 -23.2 -7.1 59 8132 Manulife MFC Global Pooled U.S. Equity Fund 5.3 5.3 7.0 5.1 -4.7 -7.4 n/a 5.3 8.7 1.4 -28.9 -17.4 60 8142 Manulife Fidelity Growth America Fund 8.0 8.0 5.5 7.0 -1.2 -2.2 7.1 8.0 3.0 10.1 -22.1 -6.1 61 8171 Manulife SEAMARK U.S. Equity Fund 1.2 1.2 -1.0 3.6 -3.7 -2.2 n/a 1.2 -3.2 13.5 -22.8 4.2 62 8191 Manulife U.S. Equity Fund (Bernstein) 1.4 1.4 2.3 2.9 -2.7 -3.9 n/a 1.4 3.3 3.9 -17.7 -9.1 63 8261 Manulife Legg Mason U.S. Value Fund 4.0 4.0 4.4 8.7 1.1 0.6 n/a 4.0 4.8 17.9 -18.7 -2.7 64 S&P 500 Index ($ Cdn) 1.6 1.6 2.4 3.4 -3.9 -4.4 7.4 1.6 3.3 5.3 -22.7 -6.5 INTERNATIONAL EQUITY 8172 Manulife SEAMARK International Equity Fund 6.1 6.1 4.2 5.7 -0.8 -3.1 n/a 6.1 2.3 8.9 -18.0 -11.8 66 8192 Manulife International Equity Fund (Templeton) 9.8 9.8 12.1 13.3 4.4 1.7 n/a 9.8 14.4 15.6 -18.2 -8.0 67 8241 Manulife Jarislowsky Fraser International Equity Fund 5.0 5.0 5.4 5.8 0.1 -1.6 9.1 5.0 5.9 6.6 -15.1 -10.7 68 8321 Manulife BGI International Equity Index Fund 11.2 11.2 11.2 11.6 3.8 -0.6 4.3 11.2 11.2 13.2 -16.6 -16.3 69 MSCI EAFE Index ($ Cdn) 10.4 10.4 11.4 12.2 4.3 -0.2 4.5 10.4 12.4 13.9 -16.3 -16.4 GLOBAL EQUITY 8141 Manulife Fidelity International Portfolio Fund 11.8 11.8 9.3 10.7 2.8 0.6 8.7 11.8 6.9 13.5 -17.7 -7.9 70 8161 Manulife McLean Budden Global Equity Fund 5.7 5.7 5.6 6.6 -0.1 -1.4 n/a 5.7 5.5 8.5 -17.6 -6.6 71 8181 Manulife Trimark Fund 6.8 6.8 6.7 7.6 4.5 5.9 10.2 6.8 6.6 9.4 -4.1 11.7 72 MSCI World Index ($ Cdn) 6.6 6.6 7.0 7.8 0.0 -2.4 5.8 6.6 7.3 9.4 -20.2 -11.4

Manulife Return: These numbers represent the gross rates of return of the Manulife fund.

Additional Historical Information: In order to provide historic gross rates of return information, we have included the returns for each of the respective underlying funds.

11 How to Read Fund Descriptions

3 2 1 3 Volatility meter: You can use the volatility meter of each fund to help you GLOBAL EQUITY Code 8141 Volatility meter Manulife Fidelity International Portfolio Fund choose funds that suit your tolerance for risk. The volatility

Based on three−year standard deviation from Globe HySales meter is based on the standard deviation of monthly UNDERLYING FUND −> Fidelity International Portfolio−A 7 How the underlying fund is invested 8 Objective This fund invests primarily in equity securities of companies anywhere in the United Kingdom 9.70% world with the objective of achieving long−term capital growth. The fund is not subject Australia 2.90% to any geographic constraints with regard to the allocation of portfolio assets among returns of the fund or the underlying fund over a three- Canada 5.40% 4 Other 18.60% different markets. United States 41.70% Japan 14.70%9 Managed by Fidelity Investments Canada Ltd. Switzerland 3.20% year period where available. For any funds with less than a Germany 3.80%10 Fund managers Richard Habermann, BA, MBA. Inception date November 1987 Total assets $1,337.2 million 5 Top holdings within the underlying fund 11 12 three-year history, the rating was based on the next (As at December 31, 2005) BP PLC − Ericsson LM Telephone − Historical gross returns 13 longest available time period. Generally, the greater the Genentech Inc. − Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its GlaxoSmithKline PLC − inception in July 1997. To provide further historical information, the shaded area Goldman Sachs − represents the returns of the underlying fund for the period before the start date of the Manulife fund. return you hope to earn on your investments, the greater Monster Worldwide − MLI Fidelity Int’l Portfolio Novartis AG − Fidelity International Portfolio−A Peabody Energy Corp − 40% risk you must assume. A fund with high volatility has 27.7 27.8 14 23.7 Total SA − 19.4 20% 13.5 11.8 6.9 Univision Communication − −7.3 −7.9 −17.7 0% Total 10.10% experienced larger fluctuations of monthly returns than a −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 *Only full calendar year returns are shown. fund with low volatility. Investors expect the potential for Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross 15 6 Underlying fund commentary returns. (As at December 31, 2005) MLI Fidelity Int’l Portfolio higher return in exchange for assuming the higher risk of MSCI World ($ Cdn) Fidelity International Portfolio−A 16 Global equity markets performed well during the fourth $24,000 quarter of 2005, with the MSCI World index gaining 3.7% $22,000 $21,922* (all returns in Canadian−dollar terms). The Japanese equity more volatile investments. Volatility is ranked from lowest $20,000 market posted strong gains, advancing (+13%), followed by $18,000 the Asia ex−Japan region (+7.0%) and the U.S. (+2.9%). $17,129 The European equity market lagged the other regions but $16,000 still posted positive returns (+2.6%). Japanese equities to highest - the left side represents low volatility and the mirrored the strong gains of the previous quarter, surging to $14,000 a five−year high. Improving economic conditions and $12,000 earnings growth continued to attract overseas investors to $10,000 Japanese equities. The financials, industrials, and materials Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 right side represents high volatility. sectors performed particularly well with the latter sector *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could benefiting from rising gold prices, which broke through the be expected to vary. $500 US barrier in December. Weaker performance was seen in the energy and telecommunication−services sectors. Annual compound returns (As at December 31, 2005) Energy prices fell to more moderate levels due to a softening 17 in demand. The Fund rose 3.7% during the fourth quarter, This table shows the historical annual compound total return of the fund compared with trailing the return of its benchmark index slightly. Security the MSCI World ($ Cdn). 4 selection was the primary driver of relative returns, Manulife How the underlying fund is invested: particularly within the Japanese market. The largest Since inception 18 detractor from performance was being overweight the 1−year 2−year 3−year 5−year inception date underperforming energy sector. Lead portfolio manager, Dick Habermann, continues to MLI Fidelity Int’l Portfolio 11.77% 9.31% 10.69% 0.57% 5.57% Jul 1997 The pie chart depicts the mix of investments held by the observe differing levels of strength in global economies. MSCI World ($ Cdn) 6.58% 6.96% 7.78% −2.41% − Persistently high oil prices and strong raw material demand in China are continuing themes. Mr. Habermann is underweighted in the U.S. where continued interest rate underlying fund. hikes and sustained high energy prices have negatively Rate of return expectation impacted consumer sentiment. European stocks are also The fund seeks to achieve returns comparable to, or better than, the MSCI World Index ($ Cdn). 19 underweighted, despite improved corporate earnings, structural problems persist. Japan is overweight in the Fund and Mr. Habermann remains positive in his outlook for the Japanese market. 5 Top holdings:

Source: Bell Globemedia Publishing Inc. The primary security holdings based on the percentage weighting of the underlying fund’s net market value.

6 Fund commentary/Underlying fund commentary: These commentaries offer the fund managers' reviews of fund activity and/or performance over a specified time 1 Fund code: period. They include an outlook reflecting economic trends A specific code has been assigned to each fund. This code or conditions that may affect the fund. Commentaries makes it easier for you and Manulife to identify a specific appear in the format provided by the fund manager(s). fund. Use this code in all communications with Manulife. When you use Manulife’s secure website and telephone 7 Underlying fund: services to access your account, you will be able to identify The market-based investment options in your group plan funds using the fund codes. are fund-on-fund investments which invest in existing pooled or mutual funds (referred to as underlying funds). 2 Asset class: When a deposit is made into a Manulife fund, the deposit The fund pages in this Group Investment Report and on is used to purchase units of the corresponding underlying the website (www.manulife.ca/GRO) reflect the colour fund. For example, if you purchase units of the “Manulife of their asset classes. For more information on asset Trimark Canadian Fund,” this Manulife fund invests in classes, read page 5. units of the “Trimark Canadian Fund.” Due to the timing

12 of these transactions, each Manulife fund may contain a 14 Year by year returns: small cash component in addition to the underlying fund's The one-year return of the fund for each year specified, cash component. The goal of the fund-on-fund strategy is based upon calendar year from January to December. to produce returns on the Manulife fund that are similar to the returns on the underlying fund. 15 Overall past performance: The graph shows you how a $10,000 investment in a fund 8 Objective: would change in value for the specific number of years The fund’s primary investment goal(s) as determined by compared with a related broad-based index. the fund manager. 16 Index: 9 Managed by: The index shown represents a broad-based market view The fund management company that manages the and is not necessarily the fund’s specific benchmark. It underlying fund. should be used as a reference to compare funds against a broad asset class. The fund’s objective may differ from the 10 Fund managers: style of the index. The name of the lead fund manager(s) responsible for the investment decisions regarding the underlying fund. 17 Annual compound returns: The return for historical period specified, converted to an 11 Inception date: annualized rate. The date the underlying fund was made available for purchase by investors. 18 Manulife inception date: The first full month the fund was made available for 12 Total assets: investment by Manulife Group Savings and Retirement The total market value of all the assets invested in the Solutions. underlying fund as of the specified date. 19 Rate of return expectation: 13 Historical gross returns: The benchmark the fund manager expects to meet or Historical performance of the fund over a specified time exceed over the long-term. period. All performance histories are offered for illustrative purposes only and are not a guarantee of future performance. Unit values will fluctuate with the market value of the underlying fund’s assets. Gross returns are the rates of return earned before the deduction of investment management fees. An individual investing in the fund earns a net return after applicable management fees are charged. Management fees can vary by client depending on the products purchased. The returns shown here are returns for the Manulife fund and/or the underlying fund. Returns for individual plans will differ as investment management fees are applied.

13 Asset Allocation

Asset allocation funds are portfolios of underlying funds diversified by fund manager, asset class and investor style. Asset allocation funds are designed to make investing convenient. They provide fund participants with a balance of capital growth and preservation consistent with five investor styles ranging from conservative to aggressive. Asset allocation funds diversify by investing in a number of underlying funds so plan members do not need to manage these portfolios.

Manulife offers two types of asset allocation funds: five actively-managed asset allocation funds and five passively-managed index asset allocation funds. The actively-managed funds strive to out-perform a variety of benchmark index composites while the passively-managed portfolios are designed to track to the returns of these benchmark index composites. (Please note: The passively-managed index asset allocation funds do not track to the same benchmarks as their actively managed counterparts.)

The funds are re-balanced periodically to maintain their respective long-term target asset mixes which ensures each fund's underlying composition fulfills its objectives.

Asset Allocation FUND PAGE CODE NUMBER

Manulife Conservative Asset Allocation Fund 2001 15 Manulife Moderate Asset Allocation Fund 2002 17 Manulife Balanced Asset Allocation Fund 2003 19 Manulife Growth Asset Allocation Fund 2004 21 Manulife Aggressive Asset Allocation Fund 2005 23

Index Asset Allocation

Manulife Conservative Index Asset Allocation Fund 2101 16 Manulife Moderate Index Asset Allocation Fund 2102 18 Manulife Balanced Index Asset Allocation Fund 2103 20 Manulife Growth Index Asset Allocation Fund 2104 22 Manulife Aggressive Index Asset Allocation Fund 2105 24

14 ASSET ALLOCATION Code 2001 Volatility meter Manulife Conservative Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Conservative Asset Allocation Fund is managed to provide a high level of current income and capital preservation with some consideration given to How the fund is invested growth of capital. This fund is diversified by asset class and investment styles with the Bonds 70.20% objective of achieving superior risk−adjusted returns over the long term. The fund will US Equity 5.70% generally maintain 80% of its investments in bond funds and 20% in equity funds, Int’l Equity 3.00% though each segment may vary up to 10% from time to time. Canadian Equity 11.60% Managed by Manulife Financial Money Market 9.50% Fund managers Various (please refer to target allocation on this page). Inception date February 1999 Total assets $220.0 million Target allocation MLI Cdn Universe Bond (TAL) 28.70% MLI Cdn Bond (MFC) 24.00% Historical gross returns MLI Mortgage Backed Fund (MFC) 17.50% Gross rates of return are shown before investment management fees have been MLI Cdn Money Market (MFC) 9.50% deducted. The solid area represents the gross returns of the Manulife fund since its inception in February 1999. MLI U.S. Equity (Bernstein) 5.70% MLI Conservative Asset Allocation MLI Cdn Large Cap Val Equity (MFC) 5.10% 10.0% 9.5 MLI Cdn Large Cap Growth Eq (MB) 4.20% 8.1 7.3 7.8 MLI International Equ (Templeton) 3.00% 4.9 5.0% MLI Cdn Lg Cap Top Dn Eq (Zechner) 2.30% Total 100.00% 1.1 0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

$11,000 For the year, all of the Portfolio’s components added to performance. The largest single performance contribution $10,000 came from Canadian equities such as the MLI Canadian $9,000 Large Cap Value Equity Fund and the MLI Canadian Large Jan99 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Cap Growth Fund both of which had strong, double−digit *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could gains. Other contributors were Canadian bonds such as the be expected to vary. MLI Canadian Bond Fund and the MLI Canadian Universe Bond Fund with single−digit gains. Annual compound returns (As at December 31, 2005)

The consensus outlook is that the market will grow slowly, This table shows the historical annual compound total return of the fund compared with displaying single−digit positive returns. The Portfolio is well− the composite benchmark, as outlined in the Rate of return expectation below. positioned to offer capital protection in volatile markets as Manulife well as conservative upside potential when markets are Since inception positive. The Portfolio remains fully invested, weighted 1−year 2−year 3−year 5−year inception date primarily in a diversified portfolio of fixed income holdings with a smaller exposure to a broad range of domestic, U.S., MLI Conservative Asset 7.77% 7.54% 8.19% 6.07% 6.21% Feb 1999 Allocation and international equities and management styles. Blend: MLI Conservative 7.57% 6.84% 7.17% 5.19% − Asset Allocation

Rate of return expectation Over the long term, the fund attempts to outperform a benchmark portfolio that is comprised of the following: · 7% BARRA Value Total Return Index · 5% BARRA Growth Total Return Index · 5% S&P 500 Total Return Index ($ Cdn) · 3% MSCI EAFE Total Return Index ($ Cdn) · 53% Scotia Capital Universe Bond Total Return Index · 9% Scotia Capital 91−Day T−bill Total Return Index · 18% Scotia Capital Mortgage Total Return Index 15

Source: Bell Globemedia Publishing Inc. ASSET ALLOCATION Code 2101 Volatility meter Manulife Conservative Index Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Conservative Index Asset Allocation Fund is managed to provide a high level of current income and capital preservation with some consideration How the fund is invested given to growth of capital. This fund is expected to track the performance of a blend of Bonds 80.00% market indices that is diversified by asset class. It will generally maintain 80% of its investments in passively managed bond funds and 20% in passively managed equity Int’l Equity 3.00% funds though each segment may vary up to 10% from time to time. Canadian Equity 10.00% Managed by Manulife Financial US Equity 7.00% Fund managers Various (please refer to target allocation on this page). Inception date June 1999 Total assets $6.9 million Target allocation MFC Global Pooled Cdn Bond Index 55.00% MFC Global Pooled Short Term 25.00% Historical gross returns MFC Global Pooled Canadian Index 10.00% Gross rates of return are shown before investment management fees have been MFC Global Pooled U.S. Equity Index 7.00% deducted. The solid area represents the gross returns of the Manulife fund since its inception in June 1999. MLI BGI International Eq Index 3.00% MLI Conservative Index Asset Alloc Total 100.00% 7.9 8.0% 7.3 7.2 6.6 6.0%

4.0% 3.7 2.1 2.0%

0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Conservative Index Asset Alloc Blend: MLI Conservative Indx Asset Alloc $15,000 For the year, all of the Portfolio’s asset classes added to $14,579* $14,454 performance. The largest contribution to the Portfolio’s $14,000 performance came from Canadian large−cap equities with a

gain of 24.1% as measured by the S&P/TSX Composite $13,000 Index. To a lesser extent, positive performance by

international large−cap equities and U.S. large−cap equities, $12,000 also contributed to the Portfolio’s performance.

$11,000 The Portfolio was rebalanced in April, May, July, August, and September. The Fund was rebalanced so frequently $10,000 (primarily) to respond to the outperformance of the Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Canadian equities market and the fact that each *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could rebalancing did not move the Portfolio all the way back to be expected to vary. the target mix, but left the Portfolio overweight in Canadian equities. This was done to reduce transaction costs and Annual compound returns (As at December 31, 2005) exploit the momentum of the Canadian equities market. This table shows the historical annual compound total return of the fund compared with the composite benchmark, as outlined in the Rate of return expectation below. Manulife Since inception 1−year 2−year 3−year 5−year inception date MLI Conservative Index 7.19% 6.87% 7.21% 5.45% 5.90% Jun 1999 Asset Alloc Blend: MLI Conservative 7.00% 6.68% 7.06% 5.28% − Indx Asset Alloc

Rate of return expectation Over the long term, the fund attempts to track the performance of a benchmark portfolio that is comprised of the following: · 10% S&P/TSX Composite Total Return Index · 7% S&P 500 Total Return Index ($ Cdn) · 3% MSCI EAFE Total Return Index ($ Cdn) · 55% Scotia Capital Universe Bond Total Return Index · 25% Scotia Capital 91−Day T−bill Total Return Index

16 Source: Bell Globemedia Publishing Inc. ASSET ALLOCATION Code 2002 Volatility meter Manulife Moderate Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Moderate Asset Allocation Fund is managed to provide a balance between current income and growth of capital with a greater emphasis on How the fund is invested income and capital preservation. This fund is diversified by asset class and investment Bonds 59.80% styles with the objective of achieving superior risk−adjusted returns over the long term. The fund will generally maintain 60% of its investments in bond funds and 40% in equity Int’l Equity 5.10% funds, though each segment may vary up to 10% from time to time. Canadian Equity 25.80% Managed by Manulife Financial US Equity 9.30% Fund managers Various (please refer to target allocation on this page). Inception date February 1999 Total assets $323.3 million Target allocation MLI Cdn Universe Bond (TAL) 23.70% MLI Cdn Bond (MFC) 21.10% Historical gross returns MLI Mortgage Backed Fund (MFC) 15.00% Gross rates of return are shown before investment management fees have been MLI U.S. Equity (Bernstein) 9.30% deducted. The solid area represents the gross returns of the Manulife fund since its inception in February 1999. MLI Cdn Large Cap Val Equity (MFC) 8.80% MLI Moderate Asset Allocation MLI Cdn Large Cap Growth Eq (MB) 6.50% MLI International Equ (Templeton) 5.10% 15% 12.6 9.7 10% 8.8 MLI Cdn Small Cap Equ (Tattersall) 4.20% 7.5 5% MLI Cdn Lg Cap Top Dn Eq (Zechner) 3.80% 3.0 −2.2 0% MLI Growth Opportunities Fund (MFC) 2.50% −5 % Total 100.00% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

The consensus outlook is that the market will grow slowly, This table shows the historical annual compound total return of the fund compared with displaying single−digit positive returns. The Portfolio is well− the composite benchmark, as outlined in the Rate of return expectation below. positioned to offer capital protection in volatile markets as Manulife well as moderate upside potential when markets are Since inception positive. The Portfolio remains fully invested, with a slight 1−year 2−year 3−year 5−year inception date majority of the holdings in a diversified fixed income portfolio, while maintaining a comfortable exposure to a MLI Moderate Asset 9.68% 9.25% 10.35% 6.23% 6.63% Feb 1999 Allocation broad range of domestic, U.S., and international equities and management styles. Blend: MLI Moderate Asset 9.82% 8.36% 9.06% 4.59% − Allocation

Rate of return expectation Over the long term, the fund attempts to outperform a benchmark portfolio that is comprised of the following: · 13% BARRA Value Total Return Index · 9% BARRA Growth Total Return Index · 3% Nesbitt Burns Small Cap Index · 9% S&P 500 Total Return Index ($ Cdn) · 6% MSCI EAFE Total Return Index ($ Cdn) · 44% Scotia Capital Universe Bond Total Return Index · 3% Scotia Capital 91−Day T−bills Total Return Index · 13% Scotia Capital Mortgage Total Return Index 17 Source: Bell Globemedia Publishing Inc. ASSET ALLOCATION Code 2102 Volatility meter Manulife Moderate Index Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Moderate Index Asset Allocation Fund is managed to provide a balance between current income and growth of capital with a greater emphasis on How the fund is invested income and capital preservation. This fund is expected to track the performance of a Bonds 60.00% blend of market indices that is diversified by asset class. It will generally maintain 60% of its investments in passively managed bond funds and 40% in passively managed equity Int’l Equity 4.00% funds though each segment may vary up to 10% from time to time. Canadian Equity 21.00% Managed by Manulife Financial US Equity 15.00% Fund managers Various (please refer to target allocation on this page). Inception date June 1999 Total assets $9.6 million Target allocation MFC Global Pooled Cdn Bond Index 39.00% MFC Global Pooled Canadian Index 21.00% Historical gross returns MFC Global Pooled Short Term 21.00% Gross rates of return are shown before investment management fees have been MFC Global Pooled U.S. Equity Index 15.00% deducted. This solid area represents the gross returns of the Manulife fund since its inception in June 1999. MLI BGI International Eq Index 4.00% MLI Moderate Index Asset Allocation Total 100.00% 15% 10.1 10% 8.9 7.2 5.8 5% 0.0 −3.0 0%

−5 % 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Moderate Index Asset Allocation Blend: MLI Moderate Index Asset Alloc $15,000 For the year, all of the Portfolio’s asset classes added to $14,333* performance. The largest contribution to the Portfolio’s $14,000 $14,290 performance came from Canadian large−cap equities with a

gain of 24.1% as measured by the S&P/TSX Composite $13,000 Index. To a lesser extent, positive performance by

international large−cap equities and U.S. large−cap equities, $12,000 also contributed to the Portfolio’s performance.

$11,000 The Portfolio was rebalanced in April, May, July, August, and September. The Fund was rebalanced (primariy) to respond $10,000 to the outperformance of the Canadian equities market and Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 P the fact that each rebalancing did not move the ortfolio all *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could the way back to the target mix, but left the Portfolio be expected to vary. overweight in Canadian equities. This was done to reduce transaction costs and exploit the momentum of the Annual compound returns (As at December 31, 2005) Canadian equities market. This table shows the historical annual compound total return of the fund compared with the composite benchmark, as outlined in the Rate of return expectation below. Manulife Since inception 1−year 2−year 3−year 5−year inception date MLI Moderate Index Asset 8.95% 8.08% 8.76% 4.54% 5.62% Jun 1999 Allocation Blend: MLI Moderate Index 8.70% 7.79% 8.54% 4.37% − Asset Alloc

Rate of return expectation Over the long term, the fund attempts to track the performance of a benchmark portfolio that is comprised of the following: · 21% S&P/TSX Composite Total Return Index · 15% S&P 500 Total Return Index ($ Cdn) · 4% MSCI EAFE Total Return Index ($ Cdn) · 39% Scotia Capital Universe Bond Total Return Index · 21% Scotia Capital 91−Day T−bill Total Return Index

Source: Bell Globemedia Publishing Inc. ASSET ALLOCATION Code 2003 Volatility meter Manulife Balanced Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Balanced Asset Allocation Fund is managed to provide a balance between growth of capital and current income with a greater emphasis on How the fund is invested growth of capital. This fund is diversified by asset class and investment styles with the Int’l Equity 7.60% objective of achieving superior risk−adjusted returns over the long term. The fund will generally maintain 60% of its investments in equity funds and 40% in bond funds, Bonds 39.00% though each segment may vary up to 10% from time to time. Canadian Equity 39.30% Managed by Manulife Financial US Equity 14.10% Fund managers Various (please refer to target allocation on this page). Inception date February 1999 Total assets $1,239.0 million Target allocation MLI Cdn Universe Bond (TAL) 15.60% MLI U.S. Equity (Bernstein) 14.10% Historical gross returns MLI Cdn Bond (MFC) 13.60% Gross rates of return are shown before investment management fees have been MLI Cdn Large Cap Growth Eq (MB) 13.40% deducted. The solid area represents the gross returns of the Manulife fund since its inception in February 1999. MLI Cdn Large Cap Val Equity (MFC) 10.00% MLI Balanced Asset Allocation MLI Mortgage Backed Fund (MFC) 9.80% 20% MLI International Equ (Templeton) 7.60% 15.9 10.2 11.5 MLI Cdn Small Cap Equ (Tattersall) 6.00% 10% 8.8 1.9 −5.5 MLI Cdn Lg Cap Top Dn Eq (Zechner) 5.90% 0% MLI Growth Opportunities Fund (MFC) 4.00% −10% Total 100.00% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Fund commentary returns. (As at December 31, 2005) MLI Balanced Asset Allocation Blend: MLI Balanced Asset Allocation $17,000 $16,370* The economic and market fundamentals are sound and $16,000 valuation levels are reasonably attractive. Investor sentiment has been dampened by the increase in the price of oil and by $15,000 $14,236 the U.S. trade and budget deficits. On the positive side, $14,000 inflation remains tame, and earnings continue to grow at an $13,000 attractive rate, although that rate is decreasing. $12,000 For the year, all of the Portfolio’s components added to $11,000 performance. The largest single performance contribution $10,000 came from Canadian equities such as the MLI Canadian $9,000 Large Cap Value Equity Fund and the MLI Canadian Large Jan99 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Cap Growth Fund both of which had strong, double−digit *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could gains. Other contributors were Canadian bonds such as the be expected to vary. MLI Canadian Bond Fund and the MLI Canadian Universe Bond Fund with single−digit gains. Annual compound returns (As at December 31, 2005)

The consensus outlook is that the market will grow slowly, This table shows the historical annual compound total return of the fund compared with displaying single−digit positive returns. The Portfolio is well− the composite benchmark, as outlined in the Rate of return expectation below. positioned to offer relative value in volatile markets as well Manulife as upside potential when markets are positive. The Portfolio Since inception remains fully invested with a balanced exposure to a 1−year 2−year 3−year 5−year inception date diversified fixed income portfolio and a broad range of domestic, U.S., and international equities and management MLI Balanced Asset 11.49% 10.87% 12.51% 6.52% 7.39% Feb 1999 Allocation styles. Blend: MLI Balanced Asset 11.87% 9.94% 11.05% 3.95% − Allocation

Rate of return expectation Over the long term, the fund attempts to outperform a benchmark portfolio that is comprised of the following: · 18% BARRA Value Total Return Index · 14% BARRA Growth Total Return Index · 5% Nesbitt Burns Small Cap Total Return Index · 14% S&P 500 Total Return Index ($ Cdn) · 9% MSCI EAFE Total Return Index ($ Cdn) · 31% Scotia Capital Universe Bond Total Return Index · 1% Scotia Capital 91−Day T−bill Total Return Index · 8% Scotia Capital Mortgage Total Return Index 19 Source: Bell Globemedia Publishing Inc. ASSET ALLOCATION Code 2103 Volatility meter Manulife Balanced Index Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Balanced Index Asset Allocation Fund is managed to provide a balance between growth of capital and current income with a greater emphasis on How the fund is invested growth of capital. This fund is expected to track the performance of a blend of market Int’l Equity 12.00% indices that is diversified by asset class. It will generally maintain 60% of its investments in passively managed equity funds and 40% in passively managed bond funds though Canadian Equity 30.00% each segment may vary up to 10% from time to time. Bonds 40.00% Managed by Manulife Financial US Equity 18.00% Fund managers Various (please refer to target allocation on this page). Inception date June 1999 Total assets $41.6 million Target allocation MFC Global Pooled Canadian Index 30.00% MFC Global Pooled Cdn Bond Index 25.00% Historical gross returns MFC Global Pooled U.S. Equity Index 18.00% Gross rates of return are shown before investment management fees have been MFC Global Pooled Short Term 15.00% deducted. The solid area represents the gross returns of the Manulife fund since its inception in June 1999. MLI BGI International Eq Index 12.00% MLI Balanced Index Asset Alloc Total 100.00% 20%

12.4 10.9 10% 8.3 5.2 −4.2 −7.4 0%

−10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Balanced Index Asset Alloc Blend: MLI Balanced Index Asset Alloc $15,000 For the year, all of the Portfolio’s asset classes added to $14,180 performance. The largest contribution to the Portfolio’s $14,000 $14,094* performance came from Canadian large−cap equities with a gain of 24.1% as measured by the S&P/TSX Composite $13,000

Index. To a lesser extent, positive performance by $12,000 international large−cap equities and U.S. large−cap equities, also contributed to the Portfolio’s performance. $11,000

The Portfolio was rebalanced in April, May, July, August, and $10,000 September. The Fund was rebalanced so frequently $9,000 (primarily) to respond to the outperformance of the Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Canadian equities market and the fact that each *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could rebalancing did not move the Portfolio all the way back to be expected to vary. the target mix, but left the Portfolio overweight in Canadian equities. This was done to reduce transaction costs and Annual compound returns (As at December 31, 2005) exploit the momentum of the Canadian equities market. This table shows the historical annual compound total return of the fund compared with the composite benchmark, as outlined in the Rate of return expectation below. Manulife Since inception 1−year 2−year 3−year 5−year inception date MLI Balanced Index Asset 10.93% 9.62% 10.52% 3.67% 5.35% Jun 1999 Alloc Blend: MLI Balanced Index 10.66% 9.27% 10.36% 3.56% − Asset Alloc

Rate of return expectation Over the long term, the fund attempts to track the performance of a benchmark portfolio that is comprised of the following: · 30% S&P/TSX Composite Total Return Index · 18% S&P 500 Total Return Index ($ Cdn) · 12% MSCI EAFE Total Return Index ($ Cdn) · 25% Scotia Capital Universe Bond Total Return Index · 15% Scotia Capital 91−Day T−bill Total Return Index

Source: Bell Globemedia Publishing Inc. ASSET ALLOCATION Code 2004 Volatility meter Manulife Growth Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Growth Asset Allocation Fund is managed to provide long− term growth of capital with some consideration given to current income. This fund is How the fund is invested diversified by asset class and investment styles with the objective of achieving superior Canadian Equity 54.80% risk−adjusted returns over the long term. The fund will generally maintain 80% of its investments in equity funds and 20% in bond funds though each segment may vary up Int’l Equity 9.40% to 10% from time to time. Bonds 18.30% Managed by Manulife Financial US Equity 17.50% Fund managers Various (please refer to target allocation on this page). Inception date February 1999 Total assets $492.0 million Target allocation MLI Cdn Large Cap Growth Eq (MB) 18.80% MLI U.S. Equity (Bernstein) 17.50% Historical gross returns MLI Cdn Large Cap Val Equity (MFC) 12.00% Gross rates of return are shown before investment management fees have been MLI International Equ (Templeton) 9.40% deducted. The solid area represents the gross returns of the Manulife fund since its inception in February 1999. MLI Cdn Small Cap Equ (Tattersall) 9.20% MLI Growth Asset Allocation MLI Cdn Lg Cap Top Dn Eq (Zechner) 8.60% 19.9 MLI Cdn Universe Bond (TAL) 7.40% 20% 13.6 10.5 12.0 MLI Cdn Bond (MFC) 6.30% 10% 1.5 −8.5 MLI Growth Opportunities Fund (MFC) 6.20% 0% MLI Mortgage Backed Fund (MFC) 4.60% −10% Total 100.00% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

For the year, all of the Portfolio’s components added to $11,000 performance. The largest single performance contribution $10,000 came from Canadian equities such as the MLI Canadian $9,000 Large Cap Value Equity Fund and the MLI Canadian Large Jan99 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Cap Growth Fund both of which had strong, double− *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could digit gains. Other contributors were Canadian bonds such as be expected to vary. the MLI Canadian Bond Fund and the MLI Canadian Universe Bond Fund with single−digit gains. Annual compound returns (As at December 31, 2005)

The consensus outlook is that the market will grow slowly, This table shows the historical annual compound total return of the fund compared with displaying single−digit positive returns. The Portfolio is well− the composite benchmark, as outlined in the Rate of return expectation below. positioned to offer relative value in volatile markets as well Manulife as healthy growth potential in positive markets. The Since inception Portfolio remains fully invested, with a majority exposure to 1−year 2−year 3−year 5−year inception date equities, diversified by a broad range of domestic, U.S., and international equities and management styles. MLI Growth Asset 13.61% 12.82% 15.12% 7.22% 8.53% Feb 1999 Allocation Blend: MLI Growth Asset 15.15% 12.46% 14.46% 4.52% − Allocation

Rate of return expectation Over the long term, the fund attempts to outperform a benchmark portfolio that is comprised of the following: · 25% BARRA Value Total Return Index · 19% BARRA Growth Total Return Index · 11% Nesbitt Burns Small Cap Total Return Index · 15% S&P 500 Total Return Index ($ Cdn) · 10% MSCI EAFE Total Return Index ($ Cdn) · 17% Scotia Capital Universe Bond Total Return Index · 3% Scotia Capital Mortgage Total Return Index 21 Source: Bell Globemedia Publishing Inc. ASSET ALLOCATION Code 2104 Volatility meter Manulife Growth Index Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Growth Index Asset Allocation Fund is managed to provide long−term growth of capital with some consideration given to current income. This fund How the fund is invested is expected to track the performance of a blend of market indices that is diversified by Int’l Equity 12.00% asset class. It will generally maintain 80% of its investments in passively managed equity funds and 20% in passively managed bond funds though each segment may vary up to Bonds 20.00% 10% from time to time. Canadian Equity 50.00% Managed by Manulife Financial US Equity 18.00% Fund managers Various (please refer to target allocation on this page). Inception date June 1999 Total assets $25.2 million Target allocation MFC Global Pooled Canadian Index 50.00% MFC Global Pooled U.S. Equity Index 18.00% Historical gross returns MFC Global Pooled Cdn Bond Index 15.00% Gross rates of return are shown before investment management fees have been MLI BGI International Eq Index 12.00% deducted. The solid area represents the gross returns of the Manulife fund since its inception in June 1999. MFC Global Pooled Short Term 5.00% MLI Growth Index Asset Allocation Total 100.00% 20% 16.8 14.8 10.3 10% 4.4 −7.9 −11.0 0%

−10%

−20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Growth Index Asset Allocation Blend: MLI Growth Index Asset Allocation $15,000 $14,798 For the year, all of the Portfolio’s asset classes added to $14,709* performance. The largest contribution to the Portfolio’s $14,000 performance came from Canadian large−cap equities with a gain of 24.1% as measured by the S&P/TSX Composite $13,000

Index. To a lesser extent, positive performance by $12,000 international large−cap equities and U.S. large−cap equities, also contributed to the Portfolio’s performance. $11,000

The Portfolio was rebalanced in April, May, July, August, and $10,000 September. The Fund was rebalanced so frequently $9,000 (primarily) to respond to the outperformance of the Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Canadian equities market and the fact that each *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could rebalancing did not move the Portfolio all the way back to be expected to vary. the target mix, but left the Portfolio overweight in Canadian equities. This was done to reduce transaction costs and Annual compound returns (As at December 31, 2005) exploit the momentum of the Canadian equities market. This table shows the historical annual compound total return of the fund compared with the composite benchmark, as outlined in the Rate of return expectation below. Manulife Since inception 1−year 2−year 3−year 5−year inception date MLI Growth Index Asset 14.84% 12.53% 13.92% 3.91% 6.04% Jun 1999 Allocation Blend: MLI Growth Index 14.54% 11.98% 13.59% 3.72% − Asset Allocation

Rate of return expectation Over the long term, the fund attempts to track the performance of a benchmark portfolio that is comprised of the following: ·50% S&P/TSX Composite Total Return Index ·18% S&P 500 Total Return Index ($ Cdn) ·12% MSCI EAFE Total Return Index ($ Cdn) ·15% Scotia Capital Universe Bond Total Return Index · 5% Scotia Capital 91−Day T−bill Total Return Index

Source: Bell Globemedia Publishing Inc. ASSET ALLOCATION Code 2005 Volatility meter Manulife Aggressive Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Aggressive Asset Allocation Fund is managed to provide long− term growth of capital with no consideration given to current income. This fund is How the fund is invested diversified by asset class and investment styles with the objective of achieving superior Canadian Equity 73.50% risk−adjusted returns over the long term. This fund will generally maintain 100% of its investments in equity funds though each segment may vary up to 10% from time to time. US Equity 17.20% Managed by Manulife Financial Int’l Equity 9.30% Fund managers Various (please refer to target allocation on this page). Inception date February 1999 Total assets $289.2 million Target allocation MLI Cdn Large Cap Growth Eq (MB) 24.30% MLI U.S. Equity (Bernstein) 17.20% Historical gross returns MLI Cdn Large Cap Val Equity (MFC) 15.30% Gross rates of return are shown before investment management fees have been MLI Cdn Lg Cap Top Dn Eq (Zechner) 12.80% deducted. The solid area represents the gross returns of the Manulife fund since its inception in February 1999. MLI Cdn Small Cap Equ (Tattersall) 12.70% MLI Aggressive Asset Allocation MLI International Equ (Templeton) 9.30% MLI Growth Opportunities Fund (MFC) 8.40% 40% 24.3 20% 16.0 Total 100.00% 11.6 13.6 2.2 −11.5 0%

−20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Fund commentary returns. (As at December 31, 2005) MLI Aggressive Asset Allocation Blend: MLI Aggressive Asset Allocation $20,000 The economic and market fundamentals are sound and $18,895* valuation levels are reasonably attractive. Investor sentiment $18,000 has been dampened by the increase in the price of oil and by $16,000 the U.S. trade and budget deficits. On the positive side, $15,426 inflation remains tame and earnings continue to grow at an $14,000 attractive rate, although that rate is decreasing. $12,000 For the year, all of the Portfolio’s components added to performance. The largest single performance contribution $10,000 came from Canadian equities such as the MLI Canadian $8,000 Large Cap Value Equity Fund and the MLI Canadian Large Jan99 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Cap Growth Fund both of which had strong, double−digit *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could gains. Other contributors were Canadian bonds such as the be expected to vary. MLI Canadian Bond Fund and the MLI Canadian Universe Bond Fund with single−digit gains. Annual compound returns (As at December 31, 2005)

The consensus outlook is that the market will grow slowly, This table shows the historical annual compound total return of the fund compared with displaying single−digit positive returns. The Portfolio is well− the composite benchmark, as outlined in the Rate of return expectation below. positioned to offer relative value in volatile markets as well Manulife as significant upside potential in positive markets. The Since inception Portfolio remains fully invested and with a full exposure to 1−year 2−year 3−year 5−year inception date equities, diversified by a broad range of domestic, U.S., and international equities and management styles. MLI Aggressive Asset 15.95% 14.76% 17.86% 8.18% 9.64% Feb 1999 Allocation Blend: MLI Aggressive Asset 17.84% 14.41% 17.39% 4.46% − Allocation

Rate of return expectation Over the long term, the fund attempts to outperform a benchmark portfolio that is comprised of the following: · 31% BARRA Value Total Return Index · 20% BARRA Growth Total Return Index · 19% Nesbitt Burns Small Cap Total Return Index · 18% S&P 500 Total Return Index ($ Cdn) · 12% MSCI EAFE Total Return Index ($ Cdn)

Source: Bell Globemedia Publishing Inc. ASSET ALLOCATION Code 2105 Volatility meter Manulife Aggressive Index Asset Allocation Fund

Based on three−year standard deviation from Globe HySales

Objective The Manulife Aggressive Index Asset Allocation Fund is managed to provide long−term growth of capital with no consideration given to current income. This fund is How the fund is invested expected to track the performance of a blend of equity market indices that is diversified Canadian Equity 70.00% by geographic region. This fund will generally maintain 100 % of its investments in passively managed equity funds though each segment may vary up to 10% from time to US Equity 18.00% time.

Int’l Equity 12.00% Managed by Manulife Financial Fund managers Various (please refer to target allocation on this page). Inception date June 1999 Total assets $17.3 million Target allocation MFC Global Pooled Canadian Index 70.00% MFC Global Pooled U.S. Equity Index 18.00% Historical gross returns MLI BGI International Eq Index 12.00% Gross rates of return are shown before investment management fees have been Total 100.00% deducted. The solid area represents the gross returns of the Manulife fund since its inception in June 1999.

MLI Aggressive Index Asset Alloc

40%

20.9 20% 18.7 12.0 3.9 −12.2 −15.0 0%

−20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Aggressive Index Asset Alloc Blend: MLI Aggressive Index Asset Alloc $16,000 P $15,098 For the year, all of the ortfolio’s asset classes added to $15,000 performance. The largest contribution to the Portfolio’s $15,032* performance came from Canadian large−cap equities with a $14,000 gain of 24.1% as measured by the S&P/TSX Composite $13,000

Index. To a lesser extent, positive performance by $12,000 international large−cap equities and U.S. large−cap equities, also contributed to the Portfolio’s performance. $11,000 $10,000

The Portfolio was rebalanced in April, May, July, August, and $9,000 September. The Fund was rebalanced so frequently $8,000 (primarily) to respond to the outperformance of the Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Canadian equities market, and the fact that each *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could rebalancing did not move the Portfolio all the way back to be expected to vary. the target mix, but left the Portfolio overweight in Canadian equities. This was done to reduce transaction costs and Annual compound returns (As at December 31, 2005) exploit the momentum of the Canadian equities market. This table shows the historical annual compound total return of the fund compared with the composite benchmark, as outlined in the Rate of return expectation below. Manulife Since inception 1−year 2−year 3−year 5−year inception date MLI Aggressive Index Asset 18.70% 15.29% 17.14% 3.69% 6.39% Jun 1999 Alloc Blend: MLI Aggressive 18.27% 14.47% 16.63% 3.58% − Index Asset Alloc

Rate of return expectation Over the long term, the fund attempts to track the performance of a benchmark portfolio that is comprised of the following: · 70% S&P/TSX Composite Total Return Index · 18% S&P 500 Total Return Index ($ Cdn) · 12% MSCI EAFE Total Return Index ($ Cdn)

Source: Bell Globemedia Publishing Inc. Guaranteed Interest Accounts and Money Market

Guaranteed Interest Accounts (GIA)

Similar to guaranteed investment certificates (GICs) offered by banks and trust companies, these accounts guarantee an interest rate from the date of contribution until maturity. At maturity, original investments and interest earned will reinvest for the same term unless you provide Manulife with different instructions.

When contributions are invested in these accounts, they earn the current interest rate at the time of the deposit. That interest is credited to the account monthly and is compounded annually. Each contribution made to a GIA accumulates for the term selected at the guaranteed rate in effect on the date Manulife’s head office receives the contribution. The GIA operates on a compound interest basis which means the guaranteed interest rate applies to both principal and accumulated interest.

Manulife offers GIAs for these terms: daily interest, 1-year, 2-year, 3-year, 4-year, 5- year and 10-year.

Money Market

Money Market funds invest in high-quality, short-term fixed income securities. By investing in fixed income securities, these funds are essentially making a short-term loan to a government or corporation and earning interest on its principal. Money Market funds are typically managed to maintain liquidity, protect the initial investment and provide a moderate level of income. These funds are ideal for investors who want to preserve capital, who are saving for the short term or who want to maintain a cash reserve and are comfortable only with the very lowest levels of volatility.

Guaranteed Interest Accounts and Money Market Funds FUND PAGE CODE NUMBER

Manulife Daily Interest Account 1000 26 Manulife Guaranteed Interest Accounts 1001, 1002, 1003, 1004, 1005, 1010 26

Manulife Canadian Money Market Fund (MFC) 3132 27

25 GUARANTEED INTEREST ACCOUNTS Code 1000 VOLATILITY METER

Manulife Daily Interest Accounts

Volatility and risk HOW THE DAILY INTEREST ACCOUNT WORKS This account is backed by the general assets of Manulife Similar to a daily interest account at a bank or trust company, this account earns interest Financial. It has the lowest risk and lowest volatility, but daily at the current rate for that account. While Manulife always guarantees the principal earns the lowest rate of interest over the long term. and interest, the interest rate may change at any time. Consider this account as a short-term holding account Deposits begin earning interest when received by Manulife Financial's head office. As while you decide on your long-term investment strategy. Manulife Financial receives deposits, those funds begin to earn interest at a rate similar Once you have determined your investment strategy, you to a bank savings account. can transfer your funds at any time. HOW THE DAILY INTEREST ACCOUNT IS PROTECTED Manulife Financial is a founding member of Assuris. With Assuris, consumers may be entitled to protection against the loss of their savings and retirement incomes if a member financial institution becomes insolvent. You can call Assuris at 1-800-268-8099 for details about maximum coverage guarantees.

GUARANTEED INTEREST ACCOUNTS Codes 1001, 1002, 1003, 1004, 1005, 1010 VOLATILITY METER

Manulife Guaranteed Interest Accounts

Volatility and risk WHAT THESE ACCOUNTS OFFER These accounts offer good returns and excellent investment • Guaranteed returns when held to maturity security. Consider these accounts if you are an investor who • Principal and interest backed by the assets of Manulife Financial needs guaranteed security for your investment and can • Choice of 1, 2, 3, 4, 5 and 10-year terms commit to investments for a fixed period of time. There is Investment codes respectively (1001, 1002, 1003, 1004, 1005, 1010) no volatility associated with the return in this account and HOW THE GUARANTEED INTEREST ACCOUNT IS PROTECTED there is minimal risk as this is a guaranteed investment backed by the general assets of Manulife Financial. Manulife Financial is a founding member of Assuris. With Assuris, consumers may be entitled to protection against the loss of their savings and retirement incomes if a member financial institution becomes insolvent. You can call Assuris at 1-800-268-8099 for details about maximum coverage guarantees.

Sources : Manulife Financial

26 MONEY MARKET Code 3132 Volatility meter Manulife Canadian Money Market Fund (MFC)

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MLI Cdn Money Market (MFC) How the underlying fund is invested Objective The Manulife Canadian Money Market Fund is managed to achieve a consistent level of interest income while preserving capital and maintaining liquidity. This Cash 99.75% fund invests primarily in money market securities guaranteed by the Government of Canada, its provinces or municipalities, corporations and chartered banks.

Other 0.25% Managed by Manulife Financial Fund managers MFC Global Invest Mgmt (Tor)−Mgmt Team Inception date January 1999 Total assets $238.8 million Top holdings within the underlying fund (As at December 31, 2005) Short Term Investment 100.00% Total 100.00% Historical gross returns Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its inception in July 2002. To provide further historical information, the shaded area represents the returns of the underlying fund for the period before the start date of the Manulife fund.

MLI Canadian Money Market MLI Cdn Money Market (MFC)

5.7 6.0% 5.2 4.8 4.0% 2.8 3.0 2.8 2.4 2.0%

0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Canadian Money Market 91 Day Treasury Bill Index MLI Cdn Money Market (MFC) $12,996* During the first two−thirds of the year, the Bank of Canada $13,000 left interest rates unchanged with the overnight rate at $12,801 2.5%. In the second and third quarters, sentiment started to change with the futures market pricing in a possible rate $12,000 increase in September. A 25−basis−point increase took place on September 7, followed by another in October and a third in December bringing the overnight rate to 3.25% by year− $11,000 end.

The Federal Reserve has been tightening for the last $10,000 eighteen months, and while an end may be in sight, at least Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 one or two more increases seem likely. The Bank of Canada *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could also appears to be in a tightening mode, with a similar be expected to vary. number of increases expected. The Fund will continue to maintain an average term to maturity, between neutral and Annual compound returns (As at December 31, 2005) slightly longer, adding yield on weakness in the treasury bill curve and taking profits on strength. This table shows the historical annual compound total return of the fund compared with the 91 Day Treasury Bill Index. Manulife Since inception 1−year 2−year 3−year 5−year inception date MLI Canadian Money 2.80% 2.60% 2.74% − 2.78% Jul 2002 Market 91 Day Treasury Bill Index 2.58% 2.44% 2.60% 3.00% −

Rate of return expectation The fund is expected to outperform the SCM 91 Day T−bill Total Return Index over a moving three− year annualized period.

Source: Bell Globemedia Publishing Inc. Fixed Income

Fixed income funds invest in debt securities issued by corporations, as well as federal, provincial and municipal governments. By investing in bonds, the fund earns a specified amount of interest based on the coupon rate (interest rate) on the bonds. These funds are exposed to risks relating to the issuers' ability to repay the debt at maturity plus changes in interest rates.

Bond funds are appropriate for investors who have less tolerance for volatility and would like to emphasize preservation of capital.

Fixed Income FUND PAGE CODE NUMBER

Manulife Canadian Bond Fund (MFC) 4131 29

Manulife Fidelity Canadian Bond Fund 4141 30

Manulife McLean Budden Fixed Income Fund 4161 31

Manulife SEAMARK Bond Fund 4171 32

Manulife MFC Global Pooled Canadian Bond Index Fund 4191 33

28 FIXED INCOME Code 4131 Volatility meter Manulife Canadian Bond Fund (MFC)

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MLI Cdn Bond (MFC) How the underlying fund is invested Objective The Manulife Canadian Bond Fund is managed to maximize stable, long− Provincial Bonds 18.40% term growth through a combination of income and capital appreciation. This fund invests Municipal Bonds 0.16% primarily in securities guaranteed by the Government of Canada, its provinces or municipalities, corporations and chartered banks. Corporate Debentures 27.44% Federal Bonds 32.27% Managed by Manulife Financial Other 21.73% Fund managers MFC Global Invest Mgmt (Tor)−Mgmt Team

Inception date January 1999 Total assets $357.6 million Top holdings within the underlying fund (As at December 31, 2005) Gov’t of Canada, 4.50%, September 1, 2007 7.47% Gov’t of Canada, 5.75%, June 1, 2033 5.95% Historical gross returns Gov’t of Canada, 6.00%, June 1, 2011 4.13% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Province of Ontario, 5.60%, June 2, 2035 4.10% inception in September 1998. The underlying fund was changed on September 30, 2002 Gov’t of Canada, 8.00%, June 1, 2023 3.69% from the Elliott & Page Pooled Bond Fund to the Manulife Canadian Bond Fund. Gov’t of Canada, 4.50%, June 1, 2015 3.57% MLI Canadian Bond 9.9 10.0% Province of Quebec, 5.50%, December 1, 2014 3.12% 7.9 8.3 6.4 6.9 6.5 Canada Housing Trust, 3.55%, March 15, 2009 2.59% 5.0%

Province of Quebec, 6.25%, June 1, 2032 2.58% −3.1 0.0% Province of Ontario, 4.50%, March 8, 2015 2.06% −5 . 0 % Total 39.26% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Canadian Bond SC Universe Bond Total Return Index $16,000 $15,587 The Bank of Canada resumed tightening in September, bringing the rate to 3.25% by year−end. The yield curve for $15,000 $15,059* Government of Canada bonds flattened significantly: yields $14,000 on two−year bonds rose to 3.85% while yields on 30−year bonds fell to 4.04%. $13,000 $12,000 The Federal Reserve raised rates eight times in 2005, $11,000 bringing the rate to 4.25%. Longer−maturity Treasuries rallied considerably, with 30−year yields declining to 4.53 $10,000 partly due to a glut in global savings. Demand also $9,000 stemmed from the recycling of trade surpluses of Asian Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 exporting countries into U.S. Treasuries, demand from asset *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could liability matching activities, and tame core inflation numbers. be expected to vary. Fixed−income credit spreads in the U.S. widened; weakness was concentrated in the auto and auto part manufacturing Annual compound returns (As at December 31, 2005) sectors. Credit spreads in Canada were relatively unchanged. This table shows the historical annual compound total return of the fund compared with A flattening bias in yield curve positioning positively the SC Universe Bond Total Return Index. impacted portfolio returns while the contribution from Manulife duration was mixed. Since inception 1−year 2−year 3−year 5−year inception date The growth of the North American economy is expected to be slower in 2006. The housing market and its effect on MLI Canadian Bond 6.50% 6.68% 6.60% 7.19% 6.54% Sep 1998 consumers is expected to lead the slowdown. With core SC Universe Bond Total 6.46% 6.80% 6.77% 7.42% − inflation in the U.S. and Canada gradually declining, both Return Index central banks have hinted they will soon end their tightening cycles. The Fund managers are reviewing their yield curve and duration strategies to position the portfolio for the new Rate of return expectation environment. Over the long term, the fund is expected to outperform the SCM Universe Bond Total Return Index over a moving three−year annualized period by 0.5% per year.

29 Source: Bell Globemedia Publishing Inc. FIXED INCOME Code 4141 Volatility meter Manulife Fidelity Canadian Bond Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Fidelity Canadian Bond How the underlying fund is invested Objective This fund aims to provide a steady flow of income and invests primarily in Municipal Bonds 5.50% Canadian fixed income securities. It delivers enhanced return potential through a Federal Bonds 11.30% disciplined investment approach, which seeks to add value primarily through security selection and yield−curve strategies rather than interest rate anticipation. Corporate Debentures 28.40% Other 30.60% Managed by Fidelity Investments Canada Ltd. Provincial Bonds 24.20% Fund managers David Prothro, BA, MBA, CFA Inception date February 1988 Total assets $344.7 million Top holdings within the underlying fund (As at December 31, 2005) Province of Nova Scotia, 6.25%, June 1, 2011 5.88% Gov’t of Canada, 5.25%, June 1, 2012 2.92% Historical gross returns Gov’t of Canada, 8.00%, June 1, 2023 2.63% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Gov’t of Canada, 4.25%, December 1, 2021 2.55% inception in July 1997. To provide further historical information, the shaded area Province of Newfoundland, 6.15%, April 17, 2028 1.88% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Province of Manitoba, 7.75%, December 22, 1.87% 2025 MLI Fidelity Canadian Bond Fidelity Canadian Bond−A Province of New Brunswick, 5.88%, December 6, 1.78% 15% 2012 12.1 9.9 10.4 10% 9.1 8.2 9.0 Province of Quebec, 6.00%, October 1, 2029 1.75% 7.7 7.3 7.1 5% Canada Housing Trust, 3.75%, March 15, 2010 1.54% −0.8 0%

Province of Quebec, 5.25%, October 1, 2013 1.51% −5 % 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Total 24.31% *Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Fidelity Canadian Bond RBC CM Canadian Bond Market Index Fidelity Canadian Bond−A Canadian bonds, as measured by the RBC CM Canadian $22,000 $20,999* Bond Market index, rose 0.7% during the fourth quarter of $20,000 $20,651 2005. The Bank of Canada upheld its tightening stance by $18,000 raising its key overnight rate to 3.25% with 25−basis−point increases in October and December. The yield curve $16,000

continued to flatten during the three−month period, as $14,000 several strong economic indicators pushed shorter−dated yields higher. Decades−low unemployment, resilient retail $12,000 sales, and strong productivity growth − even in the $10,000 manufacturing sector − have been indicative of a solid $8,000 Canadian economy. The yield on the benchmark Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Government of Canada 10−year bond held steady as *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could headline inflation retreated along with gasoline prices. In the be expected to vary. corporate bond market, spreads remained tight. The Fund rose 0.5% in this environment to trail its benchmark index Annual compound returns (As at December 31, 2005) slightly. The Fund’s modest overweight exposure to provincial bonds, the best performer during the quarter, This table shows the historical annual compound total return of the fund compared with helped relative performance. the RBC CM Canadian Bond Market Index. Manulife The portfolio manager, David Prothro, continues to hold an Since inception ed overweight position in structured products at the expense 1−year 2−year 3−year 5−year inception date of corporate bonds. In the current market environment, Mr. Prothro prefers corporate bonds with shorter maturities. MLI Fidelity Canadian Bond 7.14% 7.23% 7.38% 7.87% 7.35% Jul 1997 Federal bonds remain underweight relative to the RBC CM Canadian Bond 6.50% 6.80% 6.74% 7.37% − benchmark index. A barbell strategy remains in place to take Market Index advantage of a flattening yield curve.

As spreads between corporate and government bonds Rate of return expectation remain very tight, Mr. Prothro is watchful of the Fund’s The fund seeks to achieve returns comparable to, or better than, the RBC CM Canadian Bond Market position in corporate bonds. Instead, the Fund has focused Index. on yield opportunities in the asset−backed and commercial− mortgage−backed securities markets for more attractive risk−return characteristics. If short−term rates continue to rise in 2006, bond markets will face a more challenging environment than they have in the past few years.

30 Source: Bell Globemedia Publishing Inc. FIXED INCOME Code 4161 Volatility meter Manulife McLean Budden Fixed Income Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MB Fixed Income How the underlying fund is invested Objective The McLean Budden Fixed Income Fund is managed for a balance of security Other 10.61% and growth over a period of at least four years. This fund provides moderate real rates of Municipal Bonds 0.54% return, primarily through income, by investing in a diversified portfolio of high quality Canadian debt securities such as bonds, debentures and T−bills. Corporate Debentures 29.46% Federal Bonds 37.37% Managed by McLean Budden Limited Provincial Bonds 22.02% Fund managers Cort Conover, CFA; Peter Kotsopoulos, CFA; Tony Magri, CFA, MBA; Paul Marcogliese, CFA and Cindy Nam Top holdings within the underlying fund Inception date January 1981 Total assets $3,276.3 million (As at December 31, 2005) Gov’t of Canada, 5.75%, June 1, 2029 9.17% Gov’t of Canada, 4.00%, September 1, 2010 5.62% Historical gross returns Gov’t of Canada, 8.00%, June 1, 2027 5.01% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Gov’t of Canada, 4.50%, June 1, 2015 4.58% inception in July 1997. To provide further historical information, the shaded area Gov’t of Canada, 5.25%, June 1, 2012 4.45% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Province of Ontario, 6.50%, March 8, 2029 4.30% MLI McLean Budden Fixed Income Gov’t of Canada, 4.25%, September 1, 2008 4.08% MB Fixed Income

Province of Quebec, 6.00%, October 1, 2012 3.01% 15% 12.6 11.3 12.6 11.8 10% 8.7 8.0 7.7 Province of Ontario, 4.50%, March 8, 2015 2.73% 6.5 6.3 Province of Ontario, 5.38%, December 2, 2012 2.58% 5% −2.1 0% Total 45.53% −5 % 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI McLean Budden Fixed Income SC Universe Bond Total Return Index MB Fixed Income The fourth quarter ended with a continued overweight $22,000 $20,906* position in long−term bonds that resulted in a duration that $20,000 $20,712 was 0.7 of a year longer than the Index, up 0.1 of a year $18,000 from the beginning of the period. Relative to the Index, mid−term bonds remained overweight by 8% throughout $16,000 the quarter resulting in an underweight position in short− $14,000 term bonds. There were no net changes in the provincial or corporate sector weights. New additions in the corporate $12,000 sector included Bank of Nova Scotia, CARDS II Trust Asset− $10,000 Backed Security (ABS), National Bank of Canada and $8,000 Manulife Bank, all with a 5−year term and a 7−year Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Enbridge Pipelines position. These were offset with sales of *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could various shorter dated bank and ABS paper. The U.S. pay be expected to vary. position was increased 1.5% to end the quarter at 7%. Annual compound returns (As at December 31, 2005) The Fund’s performance for the quarter was moderately ahead of the Index. The key contribution came from This table shows the historical annual compound total return of the fund compared with duration management as the Fund maintained a the SC Universe Bond Total Return Index. considerably longer duration than the Index during a period Manulife of declining yields for long−term bonds. The higher yields Since inception provided by the U.S. pay component also added value. 1−year 2−year 3−year 5−year inception date MLI McLean Budden Fixed 6.31% 6.99% 6.83% 7.44% 7.20% Jul 1997 Income SC Universe Bond Total 6.46% 6.80% 6.77% 7.42% − Return Index

Rate of return expectation Scotia Capital Universe Bond Index + 0.5% (annualized) over a moving four−year period.

31 Source: Bell Globemedia Publishing Inc. FIXED INCOME Code 4171 Volatility meter Manulife SEAMARK Bond Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> SEAMARK Pooled Canadian Bond How the underlying fund is invested Objective The SEAMARK Pooled Canadian Bond Fund is managed to preserve capital Municipal Bonds 8.11% while generating current income. The fund will seek to enhance returns through Other 6.15% moderate capital gains under appropriate market conditions while seeking to prevent capital losses under adverse conditions. The fund will invest primarily in Canadian dollar Federal Bonds 28.72% denominated fixed income investments. Corporate Debentures 34.84% Provincial Bonds 22.18% Managed by SEAMARK Asset Management Ltd. Fund managers Tom R. MacLaren, BBA, FCSI, CFA; Rob Weatherston, CFA; Remi Roger, CFA; and Heather Hurshman, MA. Top holdings within the underlying fund (As at December 31, 2005) Inception date June 1997 Total assets $72.3 million Province of Ontario, 6.50%, March 8, 2029 9.27% Gov’t of Canada, 5.00%, June 1, 2014 6.85% Historical gross returns Canada Housing Trust, 4.05%, March 15, 2011 5.72% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Province of British Columbia, 5.62%, August 17, 5.63% inception in August 1997. To provide further historical information, the shaded area 2028 represents the returns of the underlying fund for the period before the start date of the Canada Housing Trust, 3.75%, March 15, 2010 5.47% Manulife fund. Quebec Housing, 11.38%, September 6, 2010 5.35% MLI SEAMARK Bond Toronto Dominion Bank, 5.20%, September 4, 4.93% 15% 2012 10.6 10% 8.9 8.0 8.3 6.5 5.8 5.2 Citibank Canada, 4.78%, June 15, 2009 4.23% 5% −2.5 Royal Bank of Canada, 7.10%, January 25, 2015 4.12% 0%

Gov’t of Canada, 8.00%, June 1, 2023 4.01% −5 % 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Total 55.58% *Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI SEAMARK Bond SC Universe Bond Total Return Index SEAMARK Pooled Canadian Bond $19,000 The Canadian yield curve continued to flatten during the $18,034 quarter. The two-year bond yield increased 53 basis points $18,000 to 3.83%, while the 30-year bond yield declined 17 basis $17,000 $17,465* points to 4.04%. The rise in the front end of the yield curve $16,000 was driven by two rate hikes by the Bank of Canada (BoC), $15,000 increasing the Bank Rate to 3.50%. The decline in the $14,000 longer end of the yield curve reflects an expectation that $13,000 further rate hikes will dampen future growth prospects. $12,000

$11,000 The U.S. Federal Reserve (Fed) in December adopted a less $10,000 hawkish tone, indicating the end is in sight to the U.S. rate Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 tightening cycle. The BoC appears to have more work to *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could do. While inflation remains benign, tight labour markets be expected to vary. and capacity utilization make one or possibly two more BoC rate hikes likely in 2006. We therefore expect the short−end Annual compound returns (As at December 31, 2005) of the Canadian yield curve to continue to rise, while the longer end stabilizes near current levels. This table shows the historical annual compound total return of the fund compared with the SC Universe Bond Total Return Index. The Fund is positioned to take advantage of the anticipated Manulife upward rate adjustment. It is focused on high credit quality Since inception issues out of concern that credit spreads for lower quality 1−year 2−year 3−year 5−year inception date borrowers could widen from the current unusually narrow conditions. MLI SEAMARK Bond 5.24% 5.87% 5.84% 6.76% 6.39% Aug 1997 SC Universe Bond Total 6.46% 6.80% 6.77% 7.42% − Return Index

Rate of return expectation The fund’s performance is benchmarked against the Scotia Capital Universe Bond Index. Returns in excess of this benchmark, is an objective only, and is not guaranteed by any party.

32 Source: Bell Globemedia Publishing Inc. FIXED INCOME Code 4191 Volatility meter Manulife MFC Global Pooled Canadian Bond Index

Based on three−year standard deviation from Globe HySales Fund

UNDERLYING FUND −> MFC Global Pooled Cdn Bond Index How the underlying fund is invested Objective The MFC Global Pooled Canadian Bond Index Fund is managed to provide a Cash 0.06% rate of return based on the performance of the Scotia Capital Universe Bond Index. This Municipal Bonds 2.17% fund seeks to earn returns that replicate, as closely as possible, the Scotia Capital Universe Bond Index. This is a passively managed fund. To achieve its investment objective, the 29.56 Corporate Debentures % fund will invest directly in bonds and may use derivative instruments in order to replicate Federal Bonds 44.04% the securities of the Scotia Capital Universe Bond Index. Provincial Bonds 24.17% Managed by MFC Global Investment Management (Toronto) Fund managers MFC Global Invest Mgmt (Tor)−Mgmt Team Top holdings within the underlying fund (As at December 31, 2005) Inception date April 1999 Total assets $120.6 million Gov’t of Canada, 5.50%, June 1, 2010 8.10% Gov’t of Canada, 6.00%, June 1, 2008 4.83% Historical gross returns Gov’t of Canada, 5.50%, June 1, 2009 4.61% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Gov’t of Canada, 4.50%, September 1, 2007 4.28% inception in October 2001. To provide further historical information, the shaded area Gov’t of Canada, 5.75%, June 1, 2033 3.62% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Gov’t of Canada, 5.00%, June 1, 2014 2.78% MLI MFC Global Pooled Cdn Bond Indx Gov’t of Canada, 5.25%, June 1, 2013 2.49% MFC Global Pooled Cdn Bond Index

Gov’t of Canada, 9.00%, June 1, 2025 2.17% 15% Gov’t of Canada, 4.50%, June 1, 2015 1.85% 10.0 10% 8.1 9.0 6.8 7.1 6.4 Province of Quebec, 6.25%, June 1, 2032 1.64% 5% Total 36.37% 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI MFC Global Pooled Cdn Bond Indx SC Universe Bond Total Return Index MFC Global Pooled Cdn Bond Index $16,000 The Bank of Canada resumed tightening in September, $15,469 bringing the rate to 3.25% by year−end. The yield curve for $15,000 $15,269* Government of Canada bonds flattened significantly; yields $14,000 on two−year bonds rose to 3.85%, while yields on 30−year bonds fell to 4.04%. $13,000

$12,000 The Federal Reserve raised rates eight times in 2005, bringing the rate to 4.25%. Longer−maturity Treasuries $11,000 rallied considerably, with 30−year yields declining to 4.53 $10,000 partly due to a glut in global savings. Demand also $9,000 stemmed from the recycling of trade surpluses of Asian Mar99 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 exporting countries into U.S. Treasuries, demand from asset *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could liability matching activities, and tame core inflation numbers. be expected to vary. Fixed−income credit spreads in the U.S. widened; weakness was concentrated in the auto and auto part manufacturing Annual compound returns (As at December 31, 2005) sectors. Credit spreads in Canada were relatively unchanged. This table shows the historical annual compound total return of the fund compared with A flattening bias in yield curve positioning positively the SC Universe Bond Total Return Index. impacted portfolio returns, while the contribution from Manulife duration was mixed. Since inception 1−year 2−year 3−year 5−year inception date The growth of the North American economy is expected to be slower in 2006. The housing market and its effect on MLI MFC Global Pooled Cdn 6.40% 6.75% 6.76% − 7.06% Oct 2001 Bond Indx consumers is expected to lead the slowdown. With core inflation in the U.S. and Canada gradually declining, both SC Universe Bond Total 6.46% 6.80% 6.77% 7.42% − central banks have hinted they will soon end their tightening Return Index cycles. The Fund managers are reviewing their yield curve and duration strategies to position the portfolio for the new Rate of return expectation environment. Over the long term, the fund is expected to track the performance of the Scotia Capital Universe Bond Total Return Index.

Source: Bell Globemedia Publishing Inc. Balanced

Balanced funds typically aim to provide investors with a balance of capital growth and income. Balanced funds accomplish this by investing in a blend of equity and fixed income securities. Balanced fund managers typically set a long-term target for the mix of bonds and equities in the fund and may make moderate changes to the mix to reflect their outlook on which asset class represents the best opportunity.

Balanced funds are ideal for investors who seek a diversified portfolio with an average level of volatility and who do not want to manage the mix of asset classes on their own. Balanced funds are appropriate for investors who are looking for a mix of growth and income over the long-term and are comfortable with some short-term volatility in their investment returns.

Balanced FUND PAGE CODE NUMBER

Manulife Elliott & Page Monthly High Income Fund 5132 35

Manulife McLean Budden Balanced Growth Fund 5161 36

Manulife Canadian Balanced Ethics Fund 5162 37

Manulife McLean Budden Balanced Fund 5164 38

Manulife SEAMARK Balanced Fund 5171 39

Manulife Trimark Income Growth Fund 5181 40

Manulife Jarislowsky Fraser Balanced Fund 5241 41

Manulife Leith Wheeler Diversified Pooled Fund 5301 42

Global Balanced

Manulife CI International Balanced Fund 5231 43

34 BALANCED Code 5132 Volatility meter Manulife Elliott & Page Monthly High Income Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Elliott & Page Monthly High Income Fund How the underlying fund is invested Objective The Elliott & Page Monthly High Income Fund seeks to provide investors with Other 10.11% a steady flow of monthly income and capital growth through investments in Canadian Oil & Gas Income Trust 8.10% fixed income and large cap securities. The Fund may also invest in units or royalty trusts Non−Oil & Gas Income Trust 17.29% and real estate investment trusts. Stock 38.65% Bond 16.80% Managed by MFC Global Investment Management (Toronto) Cash 4.75% REIT 4.30% Fund managers Alan Wicks, CFA

Inception date September 1997 Total assets $3,435.9 million Top holdings within the underlying fund (As at December 31, 2005) E&P Money Fund − I (MFC) 9.42% BCE Inc. 4.00% Historical gross returns Petro−Canada 3.11% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its ARC Energy Trust 2.94% inception in December 2004. To provide further historical information, the shaded area TD Bank 2.76% represents the returns of the underlying fund for the period before the start date of the Manulife fund. BFI Canada Income Fund 2.51% MLI E&P Monthly High Income Bank of Nova Scotia 2.23% Elliott & Page Monthly High Income

Power Financial Corp. 1.95% 40% 30.6 21.5 22.2 21.8 Sun Life Financial Inc. 1.91% 20% 14.8 15.1 8.0 Brookfield Asset Management 1.90% −2.5 0% Total 32.73% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI E&P Monthly High Income Blend: 60% S&P/TSX, 40% Scotia Universe Elliott & Page Monthly High Income Every asset class posted positive returns in 2005. Income $40,000 trusts, as measured by the Scotia Capital Income Trust Index Overall, performed best, returning 29.40%. Canadian $30,000 $30,506* equities, as measured by the S&P/TSX Index, returned 24.13%. Bonds, as measured by the Scotia Capital Bond $20,000 Universe Overall, lagged returning 6.46%. Energy prices $17,876 dominated the news, with the price of oil increasing 40%. $10,000 The Fund managers’ decision to hold an underweight in energy, based on valuation, had the greatest impact on Fund $0 performance: the managers do not weight energy heavily, Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 not wanting to sacrifice future capital for a higher level of *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could current income. During the year, the Fund’s equity allocation be expected to vary. was increased to 39%, bonds and cash were increased to approximately 30%, and the income trust weighting was Annual compound returns (As at December 31, 2005) decreased to 31%. Equities appeared to be more attractively valued than income trusts. The risk profile of the Fund, This table shows the historical annual compound total return of the fund compared with however, was not changed significantly, and the asset mix the composite benchmark, as outlined in the Rate of return expectation below. remains 70% equities and income trusts and 30% cash and Manulife bonds, compared to 60% equities and 40% bonds for the Since inception benchmark. 1−year 2−year 3−year 5−year inception date The federal government’s announcement that it would leave MLI E&P Monthly High 15.09% − − − 17.18% Dec 2004 Income the tax treatment of income trusts unchanged and increase the dividend tax credit was positive for both income trusts Blend: 60% S&P/TSX, 40% 15.95% 13.43% 14.37% 6.96% − and dividend−paying stocks, and should remain so in 2006. Scotia Universe In September, the Bank of Canada began raising rates: continued increases and consequent changes in bond prices Rate of return expectation would prove to be negative for the portfolio, which is highly Over the long term, the fund is expected to outperform a benchmark portfolio that is comprised of: interest sensitive. The Fund managers will continue to seek · 60% S&P/TSX Composite Total Return Index securities that are undervalued and provide the best risk− · 40% Scotia Capital Universe Bond Index return profile.

35 Source: Bell Globemedia Publishing Inc. BALANCED Code 5161 Volatility meter Manulife McLean Budden Balanced Growth Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MB Balanced Growth How the underlying fund is invested Objective The McLean Budden Balanced Growth Fund is managed for a balance of International Equity 12.93% security and growth. This fund invests in Canadian and foreign equities and fixed income Cash 6.16% securities issued by Canadian governments and corporations. This fund provides superior Bond 34.37% real rates of return both through income and capital appreciation. Canadian Equity 31.73% Other 0.12% Managed by McLean Budden Limited United States Equity 14.69% Fund managers Tony Magri, CFA, MBA; Doug Andrews; Alan Daxner; John Ackerl, CFA, MBA; and Mary Hallward, BA, MBA Top holdings within the underlying fund Inception date January 1997 Total assets $2,226.6 million (As at December 31, 2005) MB Global Equity Growth 8.71% Gov’t of Canada, 5.75%, June 1, 2029 3.39% Historical gross returns Gov’t of Canada, 4.50%, June 1, 2015 1.96% Gross rates of return are before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Gov’t of Canada, 5.25%, June 1, 2012 1.90% inception in July 1997. To provide further historical information, the shaded area Talisman Energy 1.85% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Province of Ontario, 6.50%, March 8, 2029 1.72% MLI McLean Budden Balanced Growth Manulife Financial 1.65% MB Balanced Growth

Royal Bank of Canada 1.65% 30% 22.1 Bank of Nova Scotia 1.60% 20% 16.2 14.4 13.7 12.2 11.3 10% 6.5 8.5 TD Bank 1.60% 2.8 −6.9 0% Total 26.03% −10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI McLean Budden Balanced Growth Blend: MLI McLean Budden Balanced Growth MB Balanced Growth Most global equity markets generated positive returns $22,000 $20,504* during the quarter despite continued tightening by several $20,000 major central banks. The Bank of Canada and the U.S. $19,242 Federal Reserve increased overnight rates by 50 basis points $18,000 during the period, while the European Central Bank $16,000 announced its first interest rate increase in five years, moving the region’s benchmark rate off a six−decade low. $14,000

The Fund registered a solid 2.7% return for the quarter and $12,000 outpaced the benchmark with relatively favourable results $10,000 achieved in all underlying asset classes. Within the Canadian Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 equity component, strong stock selection in energy and *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could materials more than offset negative sector allocation during be expected to vary. the period. Globally, strong stock selection within energy, combined with an underweight position in this Annual compound returns (As at December 31, 2005) underperforming sector, drove relative results. The bond portfolio benefited from its long duration position as the This table shows the historical annual compound total return of the fund compared with yield curve continued to flatten during the period. The the composite benchmark, as outlined in the Rate of return expectation below. impact from asset mix was minimal during the quarter. Manulife Since inception Asset mix changes during the period were modest. The 1−year 2−year 3−year 5−year inception date Fund began the quarter targeting total equity content slightly higher than benchmark, while remaining MLI McLean Budden 11.30% 9.87% 11.36% 5.72% 7.64% Jul 1997 Balanced Growth underweight in bonds and overweight in cash. During the third quarter, when the adverse impact of hurricanes in the Blend: MLI McLean Budden 13.11% 11.37% 12.13% 5.09% − U.S. led to a spike in macroeconomic and inflation risks, cash Balanced Growth levels were raised. As subsequent economic data showed evidence of stabilization, the Fund’s targeted cash allocation Rate of return expectation was reduced by 1.0% with half of the proceeds used to Over a moving four−year period, the fund strives to outperform by 1% per year a benchmark portfolio increase the overweight position in foreign equities and the composed of the following: other half deployed into bonds. Relative to the benchmark, · 37% Scotia Capital Universe Bond Index the Fund closed out 2005 with an asset mix target that · 33% BMO/TSX Composite Cap 10% Index continued to favour global equities at the expense of · 25% MSCI World Index ($ Cdn) Canadian equities, while remaining underweight in bonds · 5% Scotia Capital 91−Day T−bill Index and modestly overweight in cash.

36 Source: Bell Globemedia Publishing Inc. BALANCED Code 5162 Volatility meter Manulife Canadian Balanced Ethics Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MB Select Balanced How the underlying fund is invested Objective The McLean Budden Select Balanced Fund is managed to provide a superior Cash 3.54% real rate of return through both income and capital appreciation. This fund invests in Canadian and global equities and fixed income securities issued by Canadian Canadian Equity 32.55% governments and corporations. The fund screens for tobacco, alcohol, and gaming Bond 36.36% companies. Companies must adhere to employment standards and may not derive more than 10% of their gross annual revenue from armaments. International Equity 27.55% Managed by McLean Budden Limited Fund managers McLean Budden − Mgmt. Team Top holdings within the underlying fund (As at December 31, 2005) Inception date September 2000 Total assets $57.4 million MB Select Fixed Income 36.36% MB Select Canadian Equity 32.55% Historical gross returns MB Select Global Equity 27.55% Gross rates of return are before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Total 96.46% inception in February 2001. To provide further historical information, the shaded area represents the returns of the underlying fund for the period before the start of the Manulife fund.

MLI Canadian Balanced Ethics MB Select Balanced

20% 13.8 10.9 10% 8.6 2.7 −5.1 0%

−10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Canadian Balanced Ethics Blend: MLI Canadian Balanced Ethics MB Select Balanced $13,000 Most global equity markets generated positive returns $12,627* during the quarter despite continued tightening by several $12,000 major central banks. The Bank of Canada and the U.S. $11,000 Federal Reserve increased overnight rates by 50 basis points $10,710 during the period, while the European Central Bank $10,000 announced its first interest rate increase in five years, moving the region’s benchmark rate off a six−decade low. $9,000

The Fund registered a solid 2.4% return for the quarter and $8,000 outpaced the benchmark with relatively strong results $7,000 achieved in all underlying asset classes. Within the Canadian Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 equity component, stock selection bolstered results as key *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could holdings, Dofasco and Placer Dome, were targets of be expected to vary. takeover offers. Globally, relatively weak results in telecommunication services were more than offset by strong Annual compound returns (As at December 31, 2005) stock selection in energy. The bond portfolio benefited from its long duration position as the yield curve continued to This table shows the historical annual compound total return of the fund compared with flatten during the period. The impact from asset mix was the composite benchmark, as outlined in the Rate of return expectation below. minimal during the quarter. Manulife Since inception Asset mix changes during the period were modest. The 1−year 2−year 3−year 5−year inception date Fund began the quarter targeting total equity content slightly higher than benchmark, while remaining MLI Canadian Balanced 10.88% 9.72% 11.07% − 5.58% Feb 2001 Ethics underweight in bonds and overweight in cash. During the third quarter, when the adverse impact of hurricanes in the Blend: MLI Canadian 10.99% 9.93% 10.58% 3.30% − U.S. led to a spike in macroeconomic and inflation risks, cash Balanced Ethics levels were raised. As subsequent economic data showed evidence of stabilization, the Fund’s targeted cash allocation Rate of return expectation was reduced by 1.0%, with half of the proceeds used to Over a moving four−year period, the fund strives to outperform by 1% per year a benchmark portfolio increase the overweight position in foreign equities and the composed of the following: other half deployed into bonds. Relative to the benchmark, · 33% S&P/TSX Composite Index the Fund closed out 2005 with an asset mix target that · 25% MSCI World Index ($ Cdn) continued to favour global equities at the expense of · 37% Scotia Capital Universe Bond Index Canadian equities, while remaining underweight in bonds · 5% Scotia 91−Day T−bill Index and modestly overweight in cash.

37 Source: Bell Globemedia Publishing Inc. BALANCED Code 5164 Volatility meter Manulife McLean Budden Balanced Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MB Balanced How the underlying fund is invested Objective The fund aims to provide a superior real rate of return through both income United States Equity 12.61% and capital appreciation by investing in a diversified portfolio of equity and fixed income Cash 5.26% assets. The Canadian equity component is managed on a 50/50 blend of growth and Bond 34.66% value styles. The foreign equities have a growth bias. Canadian Equity 32.07% Other 0.20% Managed by McLean Budden Limited International Equity 15.20% Fund managers Susan Shuter, Ted Thompson, Benoit Paradis, Hans Van Monsjou, Alan Daxner, Doug Andrews, Colin Sinclare, Roger Beachemin and John Ackerl Top holdings within the underlying fund Inception date March 1999 Total assets $1,450.6 million (As at December 31, 2005) Gov’t of Canada, 5.75%, June 1, 2029 3.25% Gov’t of Canada, 8.00%, June 1, 2027 1.87% Historical gross returns Royal Bank of Canada 1.68% Gross rates of return are before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Gov’t of Canada, 5.25%, June 1, 2012 1.62% inception in August 2004. To provide further historical information, the shaded area Province of Ontario, 6.50%, March 8, 2029 1.60% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Gov’t of Canada, 4.00%, September 1, 2010 1.56% MLI McLean Budden Balanced Bank of Nova Scotia 1.49% MB Balanced

EnCana Corp. 1.45% 15% 12.9 13.4 10.9 Manulife Financial 1.45% 10% 8.9 4.4 Gov’t of Canada, 4.25%, September 1, 2008 1.28% 5% −4.4 0% Total 17.25% −5 % 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI McLean Budden Balanced Blend: MLI McLean Budden Balanced MB Balanced Most global equity markets generated positive returns $18,000 during the quarter despite continued tightening by several $17,000 $17,070* major central banks. The Bank of Canada and the U.S. $16,000 $15,396 Federal Reserve increased overnight rates by 50 basis points $15,000 during the period, while the European Central Bank $14,000 announced its first interest rate increase in five years, moving the region’s benchmark rate off a six−decade low. $13,000 $12,000

The Fund registered a solid 2.5% return for the quarter and $11,000 outpaced the benchmark with relatively strong results $10,000 achieved in all underlying asset classes. Within the Canadian Mar99 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 equity component, stock selection bolstered results as key *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could holdings, Dofasco and Placer Dome, were targets of be expected to vary. takeover offers. Globally, relatively weak results in telecommunication services were more than offset by strong Annual compound returns (As at December 31, 2005) stock selection in energy. The bond portfolio benefited from its long duration position as the yield curve continued This table shows the historical annual compound total return of the fund compared with to flatten during the period. The impact from asset mix was the composite benchmark, as outlined in the Rate of return expectation below. minimal during the quarter. Manulife Since inception Asset mix changes during the period were modest. The 1−year 2−year 3−year 5−year inception date Fund began the quarter targeting total equity content slightly higher than benchmark, while remaining MLI McLean Budden 10.86% − − − 11.24% Aug 2004 Balanced in underweight bonds and overweight in cash. During the third quarter, when the adverse impact of hurricanes in the Blend: MLI McLean Budden 13.11% 11.37% 12.13% 5.09% − U.S. led to a spike in macroeconomic and inflation risks, cash Balanced levels were raised. As subsequent economic data showed evidence of stabilization, the Fund’s targeted cash allocation Rate of return expectation was reduced by 1.0%, with half of the proceeds used to The rate of return is expected to exceed the benchmark by 1%. The benchmark is composed of: increase the overweight position in foreign equities and the ·33% BMO/TSX Comp. Cap 10% other half deployed into bonds. Relative to the benchmark, ·25% MSCI World the Fund closed out 2005 with an asset mix target that ·37% SC Universe Bond continued to favour global equities at the expense of ·5% SC 91−Day T−Bills Canadian equities, while remaining underweight in bonds and modestly overweight in cash.

Source: Bell Globemedia Publishing Inc. BALANCED Code 5171 Volatility meter Manulife SEAMARK Balanced Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> SEAMARK Pooled Balanced How the underlying fund is invested Objective The SEAMARK Pooled Balanced Fund is managed to preserve capital and International Equity 7.90% minimize market value fluctuations while generating superior long−term returns through Cash 0.80% capital gains augmented by current income. The fundwill invest in fixed income and equity investments. Canadian Equity 35.61% Bond 35.34% Managed by SEAMARK Asset Management Ltd. United States Equity 20.35% Fund managers Peter Marshall, B.Comm.; Tom R. MacLaren, BBA, FCSI, CFA; George V. Loughery, CGA, CFA; and Lance Speck, CFA. Top holdings within the underlying fund Inception date June 1997 Total assets $1,037.4 million (As at December 31, 2005) Canada Housing Trust, 3.75%, March 15, 2010 4.37% TD Bank 5 3.30% Historical gross returns shown Gov’t of Canada, 4.50%, June 1, 2015 2.98% Gross rates of return are before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Alberta Municipal Finance, 5.85%, June 1, 2012 2.54% inception in August 1997. To provide further historical information, the shaded area Province of Ontario, 5.00%, March 8, 2014 2.32% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Thomson Corporation 2.20% MLI SEAMARK Balanced Royal Bank of Canada 2.19% 12 20% 16.9 16.6 Suncor Energy 2. % 13.9 9.5 9.7 2.02% 10% Petro-Canada 5.8 5.7 1.80 −6.1 Sun Life Financial Inc. % 0% Total 25.84% −10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI SEAMARK Balanced Blend: MLI SEAMARK Balanced SEAMARK Pooled Balanced North American markets recovered from a sharp October $22,000 $20,305* correction to finish modestly higher for the quarter. The $20,000 correction was driven by renewed concerns over U.S. $18,000 inflation and the level of future economic growth. Markets began recovering in late October as inflation and growth $16,000 $15,658 concerns eased, and the price per barrel of oil stabilized in $14,000 the high $50 US range. $12,000

$10,000 The Fund returned 1.04% for the quarter. Modest fixed F $8,000 income underperformance resulted from the und’s Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 defensive positioning with limited exposure to higher risk *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could bonds out of concern that credit spreads could widen be expected to vary. from current unusually narrow conditions. Annual compound returns (As at December 31, 2005) The Canadian stock market posted a 2.86% return for the quarter. The Fund was well positioned in general terms, but This table shows the historical annual compound total return of the fund compared with underperformed our expectations due to disappointing the composite benchmark, as outlined in the Rate of return expectation below. declines towards year end in the price of Quebecor World, Manulife Thomson, and BCE. Better performance came from our Since inception substantial materials and financials holdings as well as from 1−year 2−year 3−year 5−year inception date CN Rail and Gildan Activewear. MLI SEAMARK Balanced 9.65% 7.67% 9.72% 5.58% 8.20% Aug 1997 Financials and materials stocks were the S&P500’s best Blend: MLI SEAMARK 8.42% 8.08% 8.57% 2.62% − performers. The Fund’s de−emphasis on these two sectors, Balanced in the U.S., combined with a pullback by technology, health care and consumer holdings, that have generally done well this year, led the Fund’s U.S. equities to lag the index. The Rate of return expectation portfolio’s best performing stocks were in financials and The fund’s performance is benchmarked against a blend of: energy with JP Morgan and Citigroup both out−performing · 5% Scotia Capital 91−Day T−bills the S&P 500 Financials' index and Schlumberger, the world’s · 40% Scotia Capital Universe Bond Index largest oilfield services company, appreciating 15%. · 30% S&P/TSX Composite Total Return Index · 25% MSCI world (ex Canada) Index ($ Cdn)

Returns in excess of this benchmark, is an objective only, and is not guaranteed by any party.

Source: Bell Globemedia Publishing Inc. BALANCED Code 5181 Volatility meter Manulife Trimark Income Growth Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Trimark Income Growth How the underlying fund is invested Objective The Trimark Income Growth Fund seeks to generate capital growth and Cash 2.16% income over the long term. The fund invests primarily in Canadian equities, International Equity 5.35% fixed−income securities of Canadian issuers, both government and corporate, and foreign equities and fixed−income securities up to the maximum allowable foreign Canadian Equity 37.63% content limit. Bond 38.42% United States Equity 16.44% Managed by AIM Trimark Investments Fund managers Geoff MacDonald, BBA, MBA, CFA; Alfred Samson; Rex Chong, CFA, MBA; and Anthony Imbesi, CFA, BComm. Top holdings within the underlying fund (As at December 31, 2005) Inception date September 1987 Total assets $1,856.6 million Canada Govt 5.75%, June 1, 2029 5.11% Bank of Nova Scotia 3.53% Historical gross returns shown TD Bank 3.44% Gross rates of return are before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Gov’t of Canada, June 1, 2014 2.87% inception in October 1997. To provide further historical information, the shaded area BCE Inc. 2.70% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Loblaw Companies 2.29% MLI Trimark Income Growth IGM Financial 2.19% Trimark Income Growth − SC 19.9 20% 18.3 Onex Corporation 2.05% 15.6 15.8 12.8 14.5 CIBC 2.04% 10% 6.8 4.6 3.8 Canada Housing Trust, February 15, 2008 1.86% −1.2 0% Total 28.08% −10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005). MLI Trimark Income Growth Blend: 60% S&P/TSX, 40% Scotia Universe Trimark Income Growth − SC Ross Stores Inc. and The Bank of Nova Scotia were major $28,000 $27,215* contributors to the Fund’s performance in the fourth $26,000 quarter of 2005. Earlier this year, Ross Stores had problems $24,000 $23,847 with new inventory management systems that adversely $22,000 affected results. The stock did well in the fourth quarter, as $20,000 $18,000 strong same−store−sales results are an indication that these $16,000 problems are being resolved. The Bank of Nova Scotia has $14,000 tremendous growth prospects embedded in its Mexican $12,000 subsidiaryrepresenting a competitive advantage for the $10,000 bank versus its industry peers. $8,000 Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05

As yields continue to rise, the portfolio management team is *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could maintaining the Fund’s modified duration at approximately be expected to vary. 0.5 years shorter than the benchmark Scotia Capital Universe Bond Index. Recently, the declining attractiveness of Annual compound returns (As at December 31, 2005) corporate spreads has been such that the Fund’s corporate weighting has been reduced slightly, although it remains This table shows the historical annual compound total return of the fund compared with slightly higher than the benchmark index at 30% versus the composite benchmark, as outlined in the Rate of return expectation below. 26%, respectively. Manulife Since inception The Fund has underperformed in the short term due to an 1−year 2−year 3−year 5−year inception date absence of energy holdings. The Trimark discipline involves investing in businesses with strong opportunities for growth MLI Trimark Income Growth 6.84% 11.22% 12.31% 11.20% 9.44% Oct 1997 at attractive prices. Investing in a business only at a discount Blend: 60% S&P/TSX, 40% 15.95% 13.43% 14.37% 6.96% − to its true economic value is a key risk management Scotia Universe mechanism for the Fund. At the beginning of 1999, the Fund had made significant investments in energy companies that generated strong returns for the Fund from 1999 to Rate of return expectation 2004. Valuations of energy businesses are now very To be the top of its respective category over the long term, while striving to outperform a benchmark expensive and the team has moved capital into new portfolio composed of: businesses that it believes will significantly outperform · 60% S&P/TSX Composite Index energy stocks over the next three to five years. · 40% Scotia Capital Universe Bond Index

40 Source: Bell Globemedia Publishing Inc. BALANCED Code 5241 Volatility meter Manulife Jarislowsky Fraser Balanced Fund (Available

Based on three−year standard deviation from Globe HySales to Registered Plans Only)

UNDERLYING FUND −> JF Balanced How the underlying fund is invested Objective The Jarislowsky Fraser Balanced Fund is a diversified portfolio consisting of International Equity 11.00% fixed income assets, North American equities and International equities. It seeks to add Cash 7.90% value through longer−term asset mix positioning and stock selection rather than short− term trading. The portfolio’s volatility is kept to a minimum by implementing only Bond 35.10% incremental asset mix changes and buying large cap, blue−chip equity holdings and high Canadian Equity 33.60% quality, non−cyclical bonds. United States Equity 12.40% Managed by Jarislowsky Fraser Ltd. Fund managers Jarislowsky Fraser − Mgmt. Team Top holdings within the underlying fund (As at December 31, 2005) Inception date April 1997 Total assets $3,762.6 million Bank of Nova Scotia 2.30% Nexen 2.20% Historical gross returns Royal Bank of Canada 2.10% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Manulife Financial 2.00% inception in October 2001. To provide further historical information, the shaded area Talisman Energy 2.00% represents the returns of the underlying fund for the period before the start date of the Manulife fund. TD Bank 1.90% MLI JF Balanced Shell Canada 1.60% JF Balanced

Canadian Tire Corporation 1.20% 20% 17.9 Imperial Oil 1.20% 15% 11.0 11.3 10.1 9.6 TransCanada Corp. 1.20% 10% 7.6 5% 4.3 Total 17.70% 0.2 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI JF Balanced Blend: MLI JF Balanced JF Balanced $24,000 Raw material prices soared as supply shortages materialized $22,758* with the start of the rebuilding of New Orleans and $22,000 surrounding areas following the devastating hurricanes. On $20,510 $20,000 the other hand, the price of oil slipped below $60 US/barrel for the first time since mid−summer in response to early $18,000 signs of slowing demand. Around the world, in recent years, $16,000 the real strength in equities has been in smaller companies. Starved for yield as interest rates declined, investors moved $14,000 down the capitalization spectrum in search of greater $12,000 capital gains. $10,000 Mar97 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05

On the equity side, strong performance continued to mainly *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could come from sectors where we were underexposed. This be expected to vary. included stocks that had smaller capitalization or a cyclical element, a trend that has continued for several years. The Annual compound returns (As at December 31, 2005) extended rally in the energy sector also came to an end. In addition, this year’s strong run in the Japanese stock market This table shows the historical annual compound total return of the fund compared with has hampered relative performance in the EAFE portfolio. the composite benchmark, as outlined in the Rate of return expectation below. Manulife An inverted yield curve has historically been the harbinger of Since inception recession. We do not necessarily anticipate such an 1−year 2−year 3−year 5−year inception date outcome at this point in time. However, it is likely that high energy prices, a slowing real estate market, low savings MLI JF Balanced 11.26% 10.43% 10.34% − 8.36% Oct 2001 rates, and high borrowing levels will eventually lead to a Blend: MLI JF Balanced 12.64% 11.01% 11.77% 5.76% − slowdown in the global economy. It is only a matter of time before the more cyclical companies begin to suffer earnings setbacks. At that time, money will flow out of the high beta stocks in those sectors and into the more defensive, higher− Rate of return expectation quality areas that we favour such as consumer staples and Benchmark changed as at July 1, 2005. Over the long term, this fund is expected to outperform a health care companies. Our philosophy points us towards benchmark comprised of the following: companies that are able to continue to grow earnings in a · 30% S&P/TSX Composite Index, predictable manner no matter what direction the economy · 13% S&P 500 Index ($Cdn), is heading. · 10% MSCI EAFE Index ($Cdn), · 40% Scotia Capital Universe Bond Index, · 7% Scotia Capital 91−Day T−Bill Index

41 Source: Bell Globemedia Publishing Inc. BALANCED Code 5301 Volatility meter Manulife Leith Wheeler Diversified Pooled Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Leith Wheeler Diversified Pool How the underlying fund is invested Objective The objective of the Leith Wheeler Diversified Pooled Fund seeks to provide United States Equity 11.22% investors with a relatively stable, superior long−term rate of return through a balanced Cash 4.48% portfolio of common shares and fixed income securities. Bond 35.07% Managed by Leith Wheeler Inv Counsel Ltd. Canadian Equity 34.51% Fund managers Leith Wheeler Inv. Counsel − Mgmt. Team International Equity 14.72% Inception date February 2001 Total assets $133.1 million Top holdings within the underlying fund (As at December 31, 2005) Leith Wheeler International Fund 14.72% Nexen 3.22% Historical gross returns TD Bank 3.07% Gross rates of return are before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Manulife Financial 2.96% inception in October 2003. To provide further historical information, the shaded area Canada Housing Trust 5.1%, September 15, 2007 2.59% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Gov’t of Canada, June 1, 2011 2.47%

Gov’t of Canada, June 1, 2033 2.35% MLI Leith Wheeler Diversified Leith Wheeler Diversified Pool Gov’t of Canada, June 1, 2013 2.24% 20% Province of Ontario, March 8, 2033 2.10% 16.1 15% 13.9 Canada Housing Trust, March 15, 2010 1.90% 11.6 10% Total 37.62% 5% 2.0 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 *Only full calendar year returns are shown. Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Leith Wheeler Diversified Blend: MLI Leith Wheeler Diversified Leith Wheeler Diversified Pool For the third successive year, the Canadian equity market $16,000 $15,957* produced double-digit gains resulting in a three-year total $15,000 market return of almost 22% per annum. International $14,000 equity performance was also very strong in 2005 with the $13,000 $12,889 market gaining 10% for the year. In comparison, the U.S. $12,000 equity market appreciated 4.9% in $U.S. terms; however, this increase was offset by a decline in the value of the U.S. $11,000 dollar versus the Loonie resulting in a relatively flat year for $10,000 U.S. equities. $9,000

$8,000 Long-term interest rates continued to fall over the course of Feb01 Dec01 Dec02 Dec03 Dec04 Dec05 the fourth quarter and the year. Overall, declining long term *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could rates had a positive impact on the portfolio. be expected to vary.

In this market environment, we are pleased by the absolute Annual compound returns (As at December 31, 2005) return achieved by the portfolio in 2005 with the fund returning 11.4% for the year. This table shows the historical annual compound total return of the fund compared with the composite benchmark, as outlined in the Rate of return expectation below. F Over this time frame, the Diversified und has been Manulife ed in overweight Canadian equity and has benefited from this Since inception period of exceptional strength. Part of our overweighting in 1−year 2−year 3−year 5−year inception date Canadian equities has been funded by underweighting the much weaker U.S. equity market. While the U.S. dollar MLI Leith Wheeler 11.60% 12.74% − − 14.81% Oct 2003 Diversified appreciated against most of the world’s major currencies in 2005 (Yen, Euro and Sterling), it continued to decline relative Blend: MLI Leith Wheeler 12.54% 10.80% 11.66% 4.60% − to the Canadian dollar. Diversified

We now find that the increase in the valuation of many of Rate of return expectation the companies in our Canadian equity portfolio has reduced The fund’s performance is benchmarked against a blend of: their expected return forecasts. This has resulted in a · 35% S&P/TSX Composite Index reduction in the Canadian equity weighting of the portfolio · 12.5% S&P 500 Index ($ Cdn) to a more neutral position. However, we are expecting · 12.5% MSCI EAFE Index ($ Cdn) reasonable returns, particularily in comparison to bonds, · 35% Scotia Capital Universe Bond Index from the stocks we continue to hold. · 5% Scotia Capital 91−Day T−bill Index

42 Source: Bell Globemedia Publishing Inc. GLOBAL BALANCED Code 5231 Volatility meter Manulife CI International Balanced Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> CI International Balanced How the underlying fund is invested Objective The CI International Balanced Fund is managed to provide maximum long− Cash 8.10% term total return. The fund invests primarily in equities, equity−related securities and fixed income securities of issuers located throughout the world. The fund is not limited United States Equity 27.11% to how much it invests in a country or asset class or keeps invested in each asset class. International Equity 42.68% This will vary according to market conditions.

Bond 22.12% Managed by CI Investments Inc. Fund managers William Sterling, PhD, Robert Beckwitt, BA and Greg Gigliotti Top holdings within the underlying fund Inception date October 1994 Total assets $525.0 million (As at December 31, 2005) Government of France, 4.00%, April 25, 2009 1.90% Government of Netherlands, 3.00%, January 15, 1.83% Historical gross returns 2010 Gross rates of return are before investment management fees have been Canada Housing Trust, 5.10%, September 15, 1.75% deducted. The solid area represents the gross returns of the Manulife fund since its 2007 inception in February 2001. To provide further historical information, the shaded area represents the returns of the underlying fund for the period before the start date of the Republic of Germany, 5.00%, January 4, 2012 1.73% Manulife fund. Note: Gross returns have been estimated as net return plus management Microsoft 1.46% expense ratio. Federal Home Loan Bank, 3.63%, June 20, 2007 1.15% MLI CI International Balanced CI International Balanced General Electric 1.13% 40% Government of Mexico, 10.00%, December 5, 1.12% 22.9 18.8 22.6 2024 20% 16.2 13.9 4.0 6.4 4.0 −15.3 −10.5 Everest Re Group 1.05% 0% Samsung Electronics 0.99% −20% Total 14.11% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 *Only full calendar year returns are shown. Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI CI International Balanced Blend: MLI CI International Balanced CI International Balanced International equity markets were a mixed picture in 2005, $22,000 $20,506* with the emerging markets and Japan providing strong $20,000 returns. However, the strength of the Canadian dollar $18,000 against the U.S. dollar and especially against the Euro and Yen reduced returns for Canadian investors on foreign $16,000 $15,964 securities. $14,000

Looking ahead, we anticipate another year of global $12,000 economic growth, which should create a constructive $10,000 backdrop for equity markets − even as the composition of $8,000 growth and relative market performance is likely to shift. Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 We would not be surprised to see foreign markets continue *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could to outpace the U.S. market in 2006. Valuations remain be expected to vary. more attractive in many foreign markets. Even though interest rates may rise this year in Europe and Japan, Annual compound returns (As at December 31, 2005) monetary policy in those regions is likely to remain more accommodative. This table shows the historical annual compound total return of the fund compared with the composite benchmark, as outlined in the Rate of return expectation below. Markets in Europe and non−Japan Asia are trading at an Manulife attractive 12 to 13 times earnings, while many emerging Since inception market stocks still trade on single−digit multiples. With 1−year 2−year 3−year 5−year inception date government bond yields still quite low in most nations, comparisons of bond yields to equity earnings yields still MLI CI International 3.97% 5.15% 8.00% − −0.44% Feb 2001 Balanced suggest that equities on average are still more than 40% undervalued relative to bonds. Accordingly, we continue to Blend: MLI CI International 0.57% 2.87% 2.75% −1.08% − favour equities in the Fund, which maintained a target of Balanced 70% equities and 30% fixed income. Rate of return expectation In the Fund, holdings in the consumer discretionary, energy, Over the long term, the fund is expected to outperform a benchmark portfolio that is comprised of: financial and health−care sectors added the most relative · 60% MSCI World Index ($ Cdn) value over the quarter. An overweight allocation to · 40% JP Morgan Government Bond Index consumer discretionary stocks and underweight allocation to energy stocks also helped performance. Geographically, the Fund’s holdings outperformed the benchmark’s regional constituents in all regions, and exposure to emerging market stocks was also beneficial to relative performance. 43 Source: Bell Globemedia Publishing Inc. Canadian Equity

Canadian Equity funds typically aim to achieve long-term capital growth by investing in a diversified portfolio of shares issued by Canadian companies. Some Canadian Equity funds invest a portion of their assets in shares of foreign companies. A share represents an ownership stake in a company; therefore, how the fund performs depends on the success of the company holdings within the fund. A fund's performance can also be affected by factors such as currency exchange rates and economic and political trends.

Canadian Large Cap Equity funds are ideal for investors who have a long-term focus, prefer to invest in Canadian companies, and are comfortable accepting some degree of volatility.

Canadian Small/Mid Cap Equity funds are suitable for investors who have a long- term focus, prefer to invest in Canadian companies, and are comfortable accepting a higher degree of volatility.

Canadian Large Cap Equity FUND PAGE CODE NUMBER

Manulife Elliott & Page Canadian Equity Fund 7121 45

Manulife Canadian Large Cap Value Equity Fund (MFC) 7131 46

Manulife MFC Global Pooled Canadian Index Fund 7132 47

Manulife Fidelity Canadian Large Cap Fund 7141 48

Manulife McLean Budden Canadian Equity Growth Fund 7161 49

Manulife McLean Budden Canadian Equity Fund 7164 50

Manulife SEAMARK Canadian Equity Fund 7171 51

Manulife Trimark Canadian Fund 7181 52

Manulife Canadian Large Cap Top Down Equity Fund (Zechner) 7192 53

Manulife Jarislowsky Fraser Canadian Equity Fund 7241 54

Manulife Maxxum Dividend Growth Fund (Mackenzie) 7351 55

Canadian Small/Mid Cap Equity

Manulife Elliott & Page Growth Opportunities Fund 7122 56

Manulife Canadian Small Cap Equity Fund (Tattersall) 7191 57

44 CANADIAN LARGE CAP EQUITY Code 7121 Volatility meter Manulife Elliott & Page Canadian Equity Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Elliott & Page Canadian Equity − Class A How the underlying fund is invested Objective The Elliott & Page Canadian Equity Fund seeks to provide long−term capital Cash 0.50% growth. The fund invests primarily in equity securities of large, established Canadian Industrials 6.90% companies and Canadian securities that offer potential for capital growth. Other 10.14% Energy 25.35% Financials 26.52% Managed by MFC Global Investment Management (Toronto) Materials 18.91% Consumer Discretionary 6.70% Fund managers Shauna Sexsmith, BA, CFA Information Technology 4.98% Inception date February 1994 Total assets $250.4 million Top holdings within the underlying fund (As at December 31, 2005) Royal Bank of Canada 5.25% Manulife Financial 4.65% Historical gross returns EnCana Corp. 4.45% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its TD Bank 4.44% inception in August 1997. Underlying fund was changed on May 21, 2004 from the Bank of Nova Scotia 3.72% Elliott & Page Blue Chip Fund to the Elliott & Page Canadian Equity Fund. Talisman Energy 3.46% MLI Elliott & Page Canadian Equity Elliott & Page Canadian Equity−Cl A Falconbridge 3.29% 60% 49.9 Shell Canada 3.22% 40% 19.7 20.9 24.5 TELUS 3.10% 20% 14.2 16.5 7.7 8.5 −10.5 −13.9 Canadian National Railway 3.03% 0% −20% Total 38.61% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Elliott & Page Canadian Equity S&P/TSX Total Return Elliott & Page Canadian Equity−Cl A The Canadian stock market generated a gain of 2.9% in the $40,000 fourth quarter, finishing the year with a total gain of 24.2%. $31,707* Market performance was evenly split over the quarter with $30,000 five sectors posting positive gains and five sectors posting $26,850 negative gains. Materials led all sectors with a gain of 10%, $20,000 followed by financials (+7.7%) and utilities (+5.9%). consumer staples (−7.2%), telecommunications (−6.2%) and energy (−2.1%) lagged. The stock market began the $10,000 quarter with a pullback in October that spread across all sectors, but rebounded strongly in November and December $0 as the economy, employment and consumer confidence Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 remained strong. *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could be expected to vary. During the quarter the Fund initiated several positions in U.S. equities to compliment the portfolio strategy. The Fund Annual compound returns (As at December 31, 2005) now holds high-quality U.S. growth stocks in the industrial, consumer discretionary, consumer staples and health care This table shows the historical annual compound total return of the fund compared with sectors. The Fund remains invested in nine out of ten the S&P/TSX Total Return. sectors with overweight positions in energy, materials, Manulife industrials and consumers (staples and discretionary) and Since inception underweight financials, utilities, health care and technology. 1−year 2−year 3−year 5−year inception date While it appears that we may be headed toward another MLI Elliott & Page Canadian 24.50% 20.41% 20.57% 6.21% 10.44% Aug 1997 Equity minority government, the event itself is unlikely to impact the market to any significant degree. With Canada in an S&P/TSX Total Return 24.13% 19.21% 21.66% 6.63% − enviable position among G7 nations as the only member with a government surplus, of greater interest is how much the new government will flow back to Canadians and in Rate of return expectation what form. Over the near−term, we are likely to see Over the long term, the fund is expected to outperform the S&P/TSX Composite Index. continued interest rate hikes in Canada; continued strong global demand for our energy and commodities, which will keep upward pressure on our dollar; and a moderately strong economy with low unemployment.

45 Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7131 Volatility meter Manulife Canadian Large Cap Value Equity Fund (MFC)

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MLI Cdn Large Cap Val Equity (MFC) How the underlying fund is invested Objective The Fund is managed to achieve above average long−term capital growth, Information Technology 4.84% primarily through investment in common shares of listed Canadian companies with Other 9.42% relatively large market capitalization. Cash 8.46% Energy 18.24% Financials 33.61% Managed by Manulife Financial Materials 13.68% Consumer Discretionary 6.62% Fund managers MFC Global Invest Mgmt (Tor)−Mgmt Team Telecommunication Services 5.13% Inception date January 1999 Total assets $480.5 million Top holdings within the underlying fund (As at December 31, 2005) Petro−Canada 4.98% TD Bank 4.49% Historical gross returns Royal Bank of Canada 3.86% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Talisman Energy 3.86% inception in July 1997. The underlying fund was changed on September 30, 2002 from BCE Inc. 3.76% the Elliott & Page Pooled Canadian Equity Fund to the Manulife Canadian Large Cap Value Equity Fund. Bank of Nova Scotia 3.68% MLI Canadian Large Cap Value Equity Power Corp of Canada 3.46% 30% 26.0 24.3 Power Financial Corp. 3.44% 20.9 20% Sun Life Financial Inc. 3.33% 10.4 10% 6.4 Husky Energy 3.17% −5.3 −5.2 −5.0 0% Total 38.03% −10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Canadian Large Cap Value Equity S&P/TSX Total Return $22,000 The past year was strong for Canadian investors and the $20,020* $20,000 S&P/TSX Composite Index returned 24.13%. Energy, $19,502 returning 63.43%, utilities, returning 38.29%, and $18,000 financials, returning 23.93%, were the best−performing sectors; the laggards were health care, returning −2.65% $16,000 and information technology, returning −15.77%. Energy $14,000 prices dominated the news in 2005, as the price of oil $12,000 increased 40%. The energy sector was by far the top− performing sector of the stock market, accounting for more $10,000 than half of the year’s gain on the S&P/TSX Index. $8,000 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05

The Fund managers’ decision to hold an underweight in *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could energy, based on valuation, had the greatest impact on be expected to vary. Fund performance. The Fund’s turnover remains low, and few changes were made to the portfolio during the year. Annual compound returns (As at December 31, 2005) The most significant change was the addition of income trusts. During the year, Precision Drilling converted from an This table shows the historical annual compound total return of the fund compared with equity to an income trust, thus becoming the first income the S&P/TSX Total Return. trust held by the portfolio. The risk profile of the Fund has Manulife not changed significantly, and the asset mix, relative to the Since inception S&P/TSX Index, remains unchanged at 90% in equities and 1−year 2−year 3−year 5−year inception date 10% in cash. MLI Canadian Large Cap 24.31% 22.57% 23.71% 11.26% 7.25% Jul 1997 Value Equity Standard & Poor announced in September that it would include income trust units in the S&P/TSX Composite Index S&P/TSX Total Return 24.13% 19.21% 21.66% 6.63% − in two steps, after the close on December 16, 2005, and on March 17, 2006. This move increases the Fund’s investment universe and should provide greater investment Rate of return expectation opportunities in 2006. The addition of 72 trusts to the TSX The fund is expected to outperform the S&P/TSX Composite Total Return Index over moving Index will boost the energy sector’s weighting to three−year annualized period by 1.5% per year. approximately 30% of the TSX Index. It is unlikely that the Fund would ever overweight the energy sector, unless valuations became extremely compelling. The Fund will continue to purchase good−quality companies at attractive valuations and sell companies that become overpriced.

46 Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7132 Volatility meter Manulife MFC Global Pooled Canadian Index Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MFC Global Pooled Canadian Index How the underlying fund is invested Objective The MFC Global Pooled Canadian Index Fund seeks to achieve investment Cash 1.32% results that approximate the total return of the S&P/TSX Composite Index, one of the Consumer Discretionary 6.40% most watched indexes of the Canadian Equity Market. Other 7.60% Energy 25.76% Financials 31.72% Managed by MFC Global Investment Management (Toronto) Materials 16.82% Industrials 5.99% Fund managers MFC Global Invest Mgmt (Tor)−Mgmt Team Information Technology 4.39% Inception date January 1998 Total assets $129.8 million Top holdings within the underlying fund (As at December 31, 2005) Royal Bank of Canada 5.14% Manulife Financial 4.73% Historical gross returns Bank of Nova Scotia 4.00% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its EnCana Corp. 3.95% inception in January 1998.

TD Bank 3.81% MLI MFC Global Pooled Cdn Index

Suncor Energy 2.94% 40% 30.9 Bank of Montreal 2.85% 26.6 24.2 20% 14.5 Canadian Natural Resources 2.71% 7.9 0.4 −12.7 −12.7 0% Sun Life Financial Inc. 2.38%

BCE Inc. 2.26% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Total 34.77% *Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI MFC Global Pooled Cdn Index S&P/TSX Total Return $20,000 $19,464* For the calendar year ending December 31, the S&P/TSX $19,193 Composite Index advanced 24.13%. Almost all of the ten $18,000 sectors increased over the course of the year, save for $16,000 information technology, health care, and consumer staples, returning −15.77%, −2.65%, and −1.09%, respectively. The $14,000 best−performing sectors were energy, utilities, and financials, returning 63.43%, 38.29%, and 23.93% $12,000 respectively. $10,000 Given the large weightings in the S&P/TSX Index for energy, $8,000 financials, and materials, it is not surprising that the market Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 did so well, as these were among the best performers for *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could the year. For example, the energy, mining, banks, and be expected to vary. insurance sectors all rose in excess of 20% in 2005. Annual compound returns (As at December 31, 2005) The Canadian economy continues to grow at a steady pace, evidenced by real GDP growth rising at a 3.2% year−over− This table shows the historical annual compound total return of the fund compared with year rate in October. The labour market finished 2005 with the S&P/TSX Total Return. the unemployment rate at 6.5% which, while an increase, Manulife still represents multi−decade lows. The new housing market Since inception finished strong despite short−term interest rate hikes and 1−year 2−year 3−year 5−year inception date rising home prices. MLI MFC Global Pooled Cdn 24.22% 19.23% 21.64% 6.53% 8.68% Jan 1998 Index Headline inflation slowed to an annual pace of 2% in November from 2.6% in October. The core rate, however, S&P/TSX Total Return 24.13% 19.21% 21.66% 6.63% − came in a tick ahead of market expectations. An above− consensus core rate of 1.6% does not sound alarm bells, but the threat of tight labour markets and rising inflation Rate of return expectation expectations warrant further action by the Bank of Canada. Over the long term, the fund is expected to track the performance of the S&P/TSX Composite Index.

Canada’s international trade surplus stood at $7.2 billion in October. Higher natural gas prices helped push the value of total exports up by 1% to $40 billion and imports rose by 1.2% to $33 billion. This trade report shows that the Canadian economy has carried forward momentum from the third quarter into the fourth.

47 Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7141 Volatility meter Manulife Fidelity Canadian Large Cap Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Fidelity Canadian Large Cap How the underlying fund is invested Objective The Fidelity Canadian Large Cap Fund aims to achieve long−term capital Cash 1.30% growth by investing primarily in equity securities of Canadian companies with a focus on Information Technology 5.00% large companies. The portfolio manager searches for investment opportunities by using Other 7.40% Energy 30.50% Fidelity’s traditional bottom−up investment style, selecting securities for the fund on a Financials 32.40% stock−by−stock basis. Materials 14.20% Consumer Discretionary 4.90% Managed by Fidelity Investments Canada Ltd. Telecommunication Services 4.30% Fund managers Doug Lober Top holdings within the underlying fund Inception date February 1988 Total assets $73.1 million (As at December 31, 2005) Bank of Montreal − Canadian National Railway − Historical gross returns Canadian Natural Resources − Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its EnCana Corp. − inception in July 1997. To provide further historical information, the shaded area Imperial Oil − represents the returns of the underlying fund for the period before the start date of the Manulife fund. Research In Motion − MLI Fidelity Cdn Large Cap Sun Life Financial − Fidelity Canadian Large Cap−A

TD Bank − 40% 36.0 32.7 25.7 21.2 24.5 TELUS − 20% 15.4 5.8 Talisman Energy − −9.1 −5.1 −12.9 0% Total 44.60% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Fidelity Cdn Large Cap S&P/TSX Total Return Fidelity Canadian Large Cap−A The Canadian equity market, as represented by the S&P/TSX $30,000 $29,904* Composite Index, posted a modest gain of 2.4% over the $26,850 quarter, bringing the year-to-date total return to 21.9%. $25,000 Materials rose 9.4% as prices of precious metals such as gold and copper rallied in response to indications that $20,000 constrained resource supply would be insufficient to meet $15,000 global demand, particularly from China and India. Financials gained 7.1% as the banks continued to report strong $10,000 earnings in a slow rising interest rate environment. The industrials and utilities sectors both gained during the quarter $5,000 as investors purchased dividend stocks following the late Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 November government announcement of an increase in the *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could dividend tax credit. Energy fell for the first time this year by be expected to vary. −2.4% as global oil and gas supply improved for the first time since the hurricanes and prices subsequently retreated Annual compound returns (As at December 31, 2005) to lower levels. As corporate spending on research and development remained constrained, the healthcare and tech This table shows the historical annual compound total return of the fund compared with sectors lagged in performance during the quarter, and the S&P/TSX Total Return. ended the year down −3.5% and −15.8% respectively. The Manulife Canadian dollar remained near its high of $86 US, while the Since inception Bank of Canada kept a hawkish stance on inflation by 1−year 2−year 3−year 5−year inception date tightening the lending rate by 50 basis points during the quarter. The Fund rose 1.8% for the quarter ending MLI Fidelity Cdn Large Cap 32.73% 23.75% 24.39% 9.73% 11.03% Jul 1997 December 30, compared to benchmark at 2.9%, bringing S&P/TSX Total Return 24.13% 19.21% 21.66% 6.63% − the one−year total return to 28.7%. Large cap stocks have outperformed the broader market recently. Doug Lober believes this will likely continue as investors seek sector leadership, the earnings growth and Rate of return expectation consistant dividend yield. With Bank of Canada’s tightening Over the long term, the fund is expected to outperform the S&P/TSX Composite Index. stance on interest rates and potential uncertainty in consumer spending, he remains focused on companies that can exceed estimates while trading at reasonable valuations, and willing to concentrate on fewer quality names rather than general broad market exposure.

48 Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7161 Volatility meter Manulife McLean Budden Canadian Equity Growth

Based on three−year standard deviation from Globe HySales Fund

UNDERLYING FUND −> MB Canadian Equity Growth How the underlying fund is invested Objective The McLean Budden Canadian Equity Growth Fund is managed for a balance Cash 2.00% of security and growth over a period of at least four years. This stock fund invests in a Consumer Discretionary 11.44% diversified portfolio of Canadian stocks and convertible securities. The fund was Information Technology 11.00% Energy 19.65% developed to provide superior rates of return, primarily through capital appreciation, by Financials 25.54% investing in a diversified portfolio of Canadian equities. Materials 13.74% Other 9.72% Managed by McLean Budden Limited Industrials 6.91% Fund managers Bill Giblin; Bruce Murray; Mary Hallward, BA, MBA; Doug Andrews; John Durfy; and Miranda Hubbs Top holdings within the underlying fund (As at December 31, 2005) Inception date September 1980 Total assets $2,422.5 million Talisman Energy 6.30% TD Bank 5.11% Historical gross returns Royal Bank of Canada 5.06% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Bank of Nova Scotia 4.96% inception in July 1997. In order to provide further historical information, the shaded area Manulife Financial 4.85% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Magna International 4.18% MLI McLean Budden Cdn Equity Growth Research In Motion 3.94% MB Canadian Equity Growth

Cameco Corp. 3.93% 60% 41.9 40% Canadian National Railway 3.85% 26.6 30.7 18.6 18.3 22.9 Canadian Natural Resources 3.83% 20% 11.8 −2.6 1.0 −14.1 0% Total 46.01% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI McLean Budden Cdn Equity Growth BMO/TSX Composite Cap 10% Index Total MB Canadian Equity Growth $40,000 The Fund increased its commitment to information $35,900* technology during the quarter. The Index’s inclusion of $33,726 income trusts (at half weight), in December resulted in a $30,000 change in the weight of a number of sectors, most notably energy (increased) and financials (decreased). The remaining $20,000 weight in income trusts will be added mid−March 2006. At the Fund level, these moves resulted in an increase in the underweight position in energy. Fund activity saw energy $10,000 holdings, Canadian Natural Resources, Cameco and Talisman, reduced following strong price gains while there $0 was buying in EnCana. In industrials, the elimination of Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Canadian Pacific Railway more than offset additions to *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could Canadian National Railway and Finning. Materials saw some be expected to vary. buying in Novelis, while Dofasco was reduced on a sharp jump in value, as it was the target of two suitors, Arcelor Annual compound returns (As at December 31, 2005) and ThyssenKrupp. Thomson and Magna were increased in consumer discretionary, while the only activity in health care This table shows the historical annual compound total return of the fund compared with was a reduction in Biovail as the stock rallied strongly on the BMO/TSX Composite Cap 10% Index Total. news of the U.S. Food and Drug Administration’s approval Manulife of its pain relief medication Tramadol ER. In financials, Since inception Manulife was increased. Information technology holding 1−year 2−year 3−year 5−year inception date Research In Motion was increased while ATI Technologies was reduced. The Fund continues to favour information MLI McLean Budden Cdn 22.90% 17.23% 21.56% 9.28% 10.50% Jul 1997 Equity Growth technology while maintaining a relatively low exposure to materials, financials and energy. BMO/TSX Composite Cap 24.13% 19.20% 21.66% 7.57% − 10% Index Total The Fund posted a solid absolute return and outperformed the Index for the quarter due to good stock selection in Rate of return expectation energy (Cameco) and materials (Dofasco and Alcan), which This fund is expected to outperform the BMO/TSX Composite Cap 10% Index over a moving more than offset weak results in consumer discretionary four−year annualzed period by 1.5% per year. (Thomson and Magna). Sector allocation had a modestly negative impact with a high commitment to consumer staples combined with low exposure to financials the most notable factors.

49 Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7164 Volatility meter Manulife McLean Budden Canadian Equity Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MB Canadian Equity How the underlying fund is invested Objective The Fund aims to provide superior real rate of return primarily through Cash 3.72% capital appreciation, by investing in a diversified portfolio of Canadian equities. Security Other 12.37% selections will emphasize companies which are undervalued or have prospects for above Consumer Discretionary 7.94% Energy 17.64% average earnings growth. Financials 27.36% Materials 16.96% Managed by McLean Budden Limited Industrials 7.08% Information Technology 6.93% Fund managers Benoit Paradis; Hans Van Monsjou, BComm, CFA; Doug Andrews; Alan Daxner; Colin Sinclare; Susan Shuter, CFA, MBA; Ted Thompson; John Ackerl, CFA, MBA; and Roger Beachemin. Top holdings within the underlying fund (As at December 31, 2005) Inception date March 1998 Total assets $2,465.0 million Royal Bank of Canada 5.37% Bank of Nova Scotia 4.57% Historical gross returns Manulife Financial 4.31% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its EnCana Corp. 4.26% inception in April 2003. In order to provide further historical information, the shaded Canadian National Railway 3.64% area represents the returns of the underlying fund for the period before the start date of the Manulife fund. Alcan Inc. 3.58% MLI McLean Budden Canadian Equity TD Bank 3.54% MB Canadian Equity

CIBC 3.43% 30% 25.4 23.6 23.8 21.3 Magna International 2.87% 20% 12.1 Talisman Energy 2.84% 10% 4.7 −7.1 0% Total 38.41% −10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI McLean Budden Canadian Equity S&P/TSX Total Return MB Canadian Equity $24,000 The Fund increased its commitment to materials during the $22,681* quarter while the S&P/TSX Composite Index’s reclassification $22,000 of Rogers Communications from consumer discretionary to $20,000 $18,000 telecommunication services had little impact on the Fund’s $16,947 relative exposure to the two sectors. The Index’s inclusion of $16,000 income trusts (at half weight), in December resulted in a $14,000 change in the weight of a number of sectors, most notably $12,000 energy (increased) and financials (decreased). The remaining $10,000

weight in income trusts will be added mid−March 2006. At $8,000 the Fund level, these moves resulted in an increase in the $6,000 underweight position in energy. Other Fund activity saw Mar98 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Canadian Natural Resources, Cameco and Talisman all *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could reduced within energy. In industrials, buying in Canadian be expected to vary. National Railway, Finning and Quebecor World was offset by reductions in Canadian Pacific Railway. The materials sector Annual compound returns (As at December 31, 2005) was increased as buying in Inco, NOVA Chemicals and Novelis offset trimming in Placer Dome and Dofasco, each This table shows the historical annual compound total return of the fund compared with experiencing a sharp jump on takeover offers. Consumer the S&P/TSX Total Return. staples holdings, George Weston and Shoppers Drug Mart, Manulife were reduced. MDS was a new addition to health care. In Since inception financials, there was an increase in Manulife. In information 1−year 2−year 3−year 5−year inception date technology, additions to Research In Motion more than offset the elimination of GEAC following its acquisition by a MLI McLean Budden 21.34% 16.65% − − 23.59% Apr 2003 Canadian Equity private equity firm, and a reduction in ATI Technologies. Finally, there was some buying in TELUS within S&P/TSX Total Return 24.13% 19.21% 21.66% 6.63% − telecommunication services. The Fund continues to favour information technology and remains significantly underweight the energy sector and to a lesser extent Rate of return expectation financials. The gross rate of return over a full economic cycle is expected to exceed the S&P/TSX Composite Index.

Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7171 Volatility meter Manulife SEAMARK Canadian Equity Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> SEAMARK Pooled Canadian Equity How the underlying fund is invested Objective The SEAMARK Pooled Canadian Equity Fund is managed to preserve and Consumer Discretionary 15.44% enhance capital through long−term capital gains with some current dividend income. The Cash 1.14% fund will invest primarily in Canadian equity securities. Industrials 8.58% Energy 17.74% Financials 28.84% Managed by SEAMARK Asset Management Ltd. Materials 16.72% Other 7.28% Fund managers Peter Marshall, B.Comm; George V. Loughery, CGA, CFA; and Telecommunication Services 4.26% Chad King, CA, CFA.

Inception date June 1997 Total assets $196.5 million Top holdings within the underlying fund (As at December 31, 2005) TD Bank n 8.74% Royal Bank of Canada 7.39% Historical gross returns Petro−Canada 5.58% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Thomson Corporation 5.31% inception in August 1997. To provide further historical information, the shaded area Alcan Inc. 4.62% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Suncor Energy 4.56% MLI SEAMARK Canadian Equity BCE Inc. 4.26% 30% 27.4 26.6 Sun Life Financial Inc. 4.24% 22.4 19.9 20% Great−West Lifeco 4.20% 10.1 10% 7.7 Bank of Montreal 4.14% −5.5 −5.7 0% Total 53.04% −10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI SEAMARK Canadian Equity S&P/TSX Total Return SEAMARK Pooled Canadian Equity This quarter, for the first time in 2005, the energy sector did $26,000 $25,434* not lead the market, giving way to the materials and $24,000 financial sectors. The Fund was well positioned in general $22,000 terms, but underperformed our expectations for the quarter $20,000 $20,131 due to disappointing declines towards year end in the stock $18,000 price of Quebecor World, Thomson, and BCE. Better $16,000 performance came from our substantial materials and $14,000 financial holdings, as well as from CN Rail, Gildan $12,000

Activewear, and CHC Helicopter. $10,000 $8,000 Strong demand from Asia drove base metals higher. Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Aluminum and zinc surged over 20%, benefiting Alcan and *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could Teck Cominco. Newmont Mining performed well as gold be expected to vary. continued to climb. We also saw increased M&A activity, a potential harbinger of more gains to come, as Barrick Gold Annual compound returns (As at December 31, 2005) purchased Placer Dome to form the world’s largest gold producer. This table shows the historical annual compound total return of the fund compared with the S&P/TSX Total Return. Banks and life insurance companies reported good financial Manulife results, benefiting from strong consumer demand for credit Since inception and investment products, low levels of loan losses, and good 1−year 2−year 3−year 5−year inception date expense management. Major Fund holdings TD Bank, Royal Bank and Bank of Montreal all exceeded the financials MLI SEAMARK Canadian 19.92% 14.88% 18.67% 11.14% 11.00% Aug 1997 Equity sector return. S&P/TSX Total Return 24.13% 19.21% 21.66% 6.63% − The outlook for the Canadian market remains generally positive, with strong corporate earnings environment supported by good economic growth. This could be Rate of return expectation tempered by renewed strength from the Canadian dollar, The fund’s performance is benchmarked against the S&P/TSX Composite Total Return Index. Returns rising interest rates, or unforeseen geopolitical events. in excess of this benchmark, is an objective only, and is not guaranteed by any party.

Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7181 Volatility meter Manulife Trimark Canadian Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Trimark Canadian − SC How the underlying fund is invested Objective The Trimark Canadian Fund seeks to provide strong capital growth with a Cash 1.93% high degree of reliability over the long term; it invests primarily in common shares of Other 13.33% Canadian companies. Materials 9.21% Consumer Discretionary 18.09% Financials 28.90% Managed by AIM Trimark Investments Consumer Staples 13.34% Industrials 9.03% Fund managers Ian Hardacre, CFA, MBA Telecommunication Services 6.17% Inception date September 1981 Total assets $1,320.4 million Top holdings within the underlying fund (As at December 31, 2005) Bank of Nova Scotia 4.97% TD Bank 4.97% Historical gross returns Thomson Corporation 4.22% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its BCE Inc. 3.42% inception in October 1997. To provide further historical information, the shaded area Power Corp of Canada 3.25% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Royal Bank of Canada 3.23% MLI Trimark Canadian Molson Coors Canada 2.81% Trimark Canadian − SC

Barrick Gold Corp. 2.69% 30% 28.1 23.4 Toromont Industries 2.66% 20% 18.3 18.1 11.2 11.3 Petro−Canada 2.58% 10% 4.8 6.5 −3.6 −8.7 0% Total 34.80% −10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005). MLI Trimark Canadian S&P/TSX Total Return Trimark Canadian − SC Kinross Gold Corp. and The Toronto−Dominion Bank were $28,000 $26,850 major contributors to the Fund’s performance in the fourth $26,000 $26,133* quarter. Kinross’ stock benefited from higher gold prices in $24,000 the quarter, as well as optimism over the company’s new $22,000 CEO. Strategic moves made by TD Bank’s management $20,000 $18,000 earlier this year - such as TD Waterhouse’s merger with $16,000 Ameritrade and TD Bank North’s acquisition of Hudson $14,000 United Bancorp, a regional bank in northeastern United $12,000 States - have brought attention to the bank’s growth $10,000 strategy. $8,000 Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05

The Fund’s management team views the increased *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could concentration of the Canadian market as increasingly risky be expected to vary. for investors. Energy alone now represents over 25% of the S&P/TSX Composite Index. To have 25% of the Fund’s assets Annual compound returns (As at December 31, 2005) in a relatively narrow and volatile sector that has already experienced huge returns would expose unitholders to the This table shows the historical annual compound total return of the fund compared with possibility of significant capital loss. The Fund is a the S&P/TSX Total Return. concentrated portfolio, but is well−diversified by business Manulife line and is well−positioned to offer better downside Since inception protection than funds that more closely mimic the S&P/TSX 1−year 2−year 3−year 5−year inception date Composite Index. The Fund is further diversified through foreign investments that provide exposure to sectors under− MLI Trimark Canadian 11.31% 11.27% 15.16% 8.24% 8.00% Oct 1997 represented in Canada. S&P/TSX Total Return 24.13% 19.21% 21.66% 6.63% −

Rate of return expectation To be the top of its respective category over the long−term, while striving to outerform the S&P/TSX Composite Total Return Index.

52 Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7192 Volatility meter Manulife Canadian Large Cap Top Down Equity Fund

Based on three−year standard deviation from Globe HySales (Zechner)

UNDERLYING FUND −> MLI Cdn Lg Cap Top Dn Eq (Zechner) How the underlying fund is invested Objective The fund is managed to achieve above average long−term capital growth, Telecommunication Services 8.69% primarily through investment in common shares of listed Canadian companies with Energy 11.75% relatively large market capitalization. The fund employs a mix of growth and sector Consumer Discretionary 11.10% Cash 14.14% rotation and is driven by top−down sector themes while also incorporating bottom−up Financials 22.78% security selection. This fund has the ability to shift completely out of sectors as well as Other 13.22% carry very large weights (up to 400% of TSX weight in some cases) in attractive sectors. Materials 9.39% Industrials 8.93% Managed by Manulife Financial Fund managers J. Zechner Associates − Mgmt. Team Top holdings within the underlying fund (As at December 31, 2005) Inception date July 2001 Total assets $166.6 million TD Bank 4.81% Royal Bank of Canada 4.57% Historical gross returns BCE Inc. 4.45% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its TELUS 4.23% inception in October 2001.

Rogers Communications 3.78% MLI Cdn Large Cap Top Down Equity

Manulife Financial 3.32% 40% 32.6

Sun Life Financial Inc. 3.04% 20% 17.0 17.3 −22.5 Petro−Canada 2.98% 0%

Falconbridge 2.22% −20%

Nortel Networks Corp. 2.13% −40% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Total 35.53% *Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Cdn Large Cap Top Down Equity S&P/TSX Total Return MLI Cdn Lg Cap Top Dn Eq (Zechner) For the fourth quarter of 2005 the SP/TSX composite index $16,000 $15,798 was up by 2.87%. Sector performance was mixed with five $15,000 $14,660* sectors up and five sectors down. The basic materials sector $14,000 was the big winner with a 9.44% quarterly gain on a $13,000 14.75% increase in the gold sub−sector. Financials were $12,000 $11,000 also strong while telecom, staples, health care and energy $10,000 lagged the market as they all fell during the quarter. $9,000 $8,000 With a return of 2.83% the Fund performance was right in $7,000 line with the market averages for the quarter. The Fund had $6,000 a relatively high cash position as many stocks reached our Dec01 Dec02 Dec03 Dec04 Dec05 short−term price targets. Value was added by being *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could underweight energy stocks and overweight golds during the be expected to vary. quarter and through strong stock picking in financials and basic materials. Annual compound returns (As at December 31, 2005)

Within the stock market we still have a defensive posture This table shows the historical annual compound total return of the fund compared with with overweight sector positions in consumer staples, the S&P/TSX Total Return. telecom and health care. We also remain overweight in Manulife technology as the companies are still growing and Since inception generating cash while valuations look more attractive than 1−year 2−year 3−year 5−year inception date they have since the early 1990s. The largest ’alpha generating’ names in the portfolio for the year ahead MLI Cdn Large Cap Top 17.35% 17.16% 22.11% − 14.13% Oct 2001 Down Equity include Rogers and Telus in wireless communications, mid− sized gold stocks such as Glamis, Goldcorp, Agnico and S&P/TSX Total Return 24.13% 19.21% 21.66% 6.63% − Lamgold as well as the travel stocks which, in our view, should benefit from a rising Canadian dollar and falling oil prices. Our stock strategy is premised on the view that Rate of return expectation global economic growth is in the process of slowing down The fund is expected to outperform the S&P/TSX Composite Total Return Index over moving three− due to the combined impact of record debt levels and rising year annualized period by 1.5% per year. interest rates. Commoditiy prices are being artificially sustained at high levels due to an influx of financial investors into those markets. Commodity prices could fall sharply as these funds ultimately move elsewhere. With over 30% of the Canadian market in energy, this index could be extremely volatile and we expect it to be lower by year−end. 53 Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7241 Volatility meter Manulife Jarislowsky Fraser Canadian Equity Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> JF Canadian Equity How the underlying fund is invested Objective Jarislowsky Fraser’s equity style emphasizes buying long−term growth at a Cash 1.70% reasonable price. Internal resources are primarily relied on to generate investment ideas. Consumer Staples 7.70% Each year, the investment professionals contact and interview more than 200 Canadian Consumer Discretionary 7.70% Energy 31.30% companies. The portfolio focuses on industry leaders with strong balance sheets and Financials 32.00% cash flow as well as depth and quality at the management level. Materials 4.80% Other 10.10% Managed by Jarislowsky Fraser Ltd. Industrials 4.70% Fund managers Jarislowsky Fraser − Mgmt. Team Top holdings within the underlying fund Inception date April 1997 Total assets $3,864.2 million (As at December 31, 2005) Bank of Nova Scotia 6.90% Nexen 6.40% Historical gross returns Royal Bank of Canada 6.30% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Manulife Financial 5.90% inception in October 2001. To provide further historical information, the shaded area Talisman Energy 5.90% represents the returns of the underlying fund for the period before the start date of the Manulife fund. TD Bank 5.50% MLI JF Canadian Equity Jarislowsky Special Equity Fund 5.30% JF Canadian Equity

Shell Canada 4.60% 40% 31.5 25.5 24.7 27.6 20.9 Imperial Oil 3.50% 20% 11.4 5.5 Great−West Lifeco 3.40% −1.9 0% Total 53.70% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI JF Canadian Equity S&P/TSX Total Return JF Canadian Equity Raw material prices soared as supply shortages materialized, $50,000 with the start of the rebuilding of New Orleans and $44,825* surrounding areas following the devastating hurricanes. On $40,000 the other hand, the price of oil slipped below $60 US/barrel for the first time since mid−summer in response to early $30,000 signs of slowing demand. In Canada, cyclical stocks $22,254 $20,000 extended their year−long rally as investors focused on several high profile takeover situations in the fourth quarter. $10,000 The rally in gold stocks was also a major factor in the fourth quarter and year as a whole. $0 Mar97 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05

After an extended period of strong performance, our *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could Canadian equity portfolios lagged the S&P/TSX index during be expected to vary. the fourth quarter. Our overweight position in high quality, large capitalization oil and gas companies has helped Annual compound returns (As at December 31, 2005) generate substantial outperformance over the past few years. However, these same stocks were caught in the This table shows the historical annual compound total return of the fund compared with downward revaluation of the sector as a whole, during the the S&P/TSX Total Return. sudden decline in the price of oil in October. Manulife Since inception An inverted yield curve has historically been the harbinger of 1−year 2−year 3−year 5−year inception date recession. We do not necessarily anticipate such an outcome at this point in time. However, it is likely that high MLI JF Canadian Equity 27.60% 24.20% 24.35% − 18.32% Oct 2001 energy prices, a slowing real estate market, low savings S&P/TSX Total Return 24.13% 19.21% 21.66% 6.63% − rates, and high borrowing levels will eventually lead to a slowdown in the global economy. It is only a matter of time before the more cyclical companies begin to suffer earnings setbacks. At that time, money will flow out of the high beta Rate of return expectation stocks in those sectors and into the more defensive, higher Over the long term, this fund is expected to outperform the S&P/TSX Composite Index. quality areas that we favour. Our philosophy points us towards companies that are able to continue to grow earnings in a predictable manner, no matter what direction the economy is heading.

54 Source: Bell Globemedia Publishing Inc. CANADIAN LARGE CAP EQUITY Code 7351 Volatility meter Manulife Maxxum Dividend Growth Fund (Mackenzie)

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Mackenzie Maxxum Dividend Growth How the underlying fund is invested Objective The Manulife Maxxum Dividend Growth Fund, managed by Mackenzie Other 8.09% Financial, seeks a satisfactory return from a balance between long−term growth securities Industrials 2.41% and current income securities. This fund is a conservative Canadian equity fund with a Consumer Staples 7.68% Consumer Discretionary 15.71% bias towards stocks currently offering an attractive dividend yield. The fund will also invest Financials 41.64% in growth companies and low−yielding stocks that exhibit good long−term potential for Cash 14.24% capital gains. Information Technology 2.78% Energy 7.45% Managed by Mackenzie Financial Corporation Fund managers Bill Procter, MBA Top holdings within the underlying fund (As at December 31, 2005) Inception date May 1975 Total assets $1,255.6 million Manulife Financial 5.71% TD Bank 5.23% Historical gross returns Ensign Energy Services 5.00% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Citigroup 4.51% inception in January 2005. To provide further historical information, the shaded area Bank of Nova Scotia 4.04% represents the returns of the underlying fund for the period before the start date of the Manulife fund. CIBC 3.35% MLI Maxxum Dividend Growth (Mack) TJX Companies 3.13% Mackenzie Maxxum Dividend Growth

Yellow Pages Income Fund 2.92% 40% 33.6 29.2 32.0 Magna International 2.68% 20% 18.2 17.7 11.5 12.8 Reitmans (Canada) 2.61% 1.8 2.2 −6.8 0% Total 39.18% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Maxxum Dividend Growth (Mack) S&P/TSX 60 Total Return Index Mackenzie Maxxum Dividend Growth The Mackenzie Maxxum Dividend Growth Fund returned $40,000 $37,324* 5.1% for the six−month period ending Dec 31, 2005, well short of the S&P/TSX Composite Index (TSX) of 14.8%. The shortfall relative to the broad Canadian market was primarily $30,000 $30,251 due to the Fund’s very low exposure to the resource sectors. The two other factors were a cash position of approximately 15% and the foreign holdings, accounting for 18% of the $20,000 Fund which mirrored the performance of the U.S. market.

Not surprising, the best performers were energy stocks, led $10,000 by Ensign Energy Services (+59%) followed by Talisman Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Energy (+35%). However, as mentioned, the Fund’s total *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could exposure to oil and gas stocks was very low at only 8% be expected to vary. compared to the Canadian benchmark of 27%. Annual compound returns (As at December 31, 2005) The largest industry exposure at 37% remains financial services which has been a core part of the portfolio for many This table shows the historical annual compound total return of the fund compared with years. The group once again delivered solid performance, the S&P/TSX 60 Total Return Index. led by Royal Bank (+21%) and Manulife Financial (+18%). Manulife The only disappointment in the group was Fairfax (−13%) Since inception which was negatively impacted by Hurricane Katrina. 1−year 2−year 3−year 5−year inception date Global growth is likely to moderate this year, in response to MLI Maxxum Dividend 12.78% − − − 12.78% Jan 2005 Growth (Mack) a mid−cycle U.S. consumer−led slowdown but a recession should be avoided and inflation is benign. The exceptional S&P/TSX 60 Total Return 26.29% 19.90% 21.75% 5.74% − gains experienced this year in Canada are unlikely to be Index repeated but equity prices should make further gains given reasonable valuation levels, low interest rates and sustained Rate of return expectation global economic growth. As well, given the U.S. has Over the long term, the fund is expected to outperform the S&P/TSX 60 Index. underperformed Canada for the last four consecutive years, one could certainly argue for a reversal of fortunes which would assist the Fund’s relative performance. As always, the Maxxum team continues to search for high quality, attractively valued dividend−paying stocks.

55 Source: Bell Globemedia Publishing Inc. CANADIAN SMALL/MID CAP EQUITY Code 7122 Volatility meter Manulife Elliott & Page Growth Opportunities Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Elliott & Page Growth Opportunities Fund How the underlying fund is invested Objective The Elliott & Page Growth Opportunities Fund seeks long−term capital Cash 1.28% growth. The fund invests primarily in high−quality securities and convertible instruments Financials 6.16% of small and mid cap Canadian companies. Industrials 11.29% Energy 23.69% Materials 27.45% Managed by MFC Global Investment Management (Toronto) Other 19.80% Consumer Discretionary 5.27% Fund managers Ted Whitehead, B.Comm, CFA Health Care 5.06% Inception date November 1998 Total assets $730.8 million Top holdings within the underlying fund (As at December 31, 2005) E&P Money Fund − I (MFC) 9.35% Teck Cominco Ltd. 2.33% Historical gross returns Mullen Group Income Fund 2.18% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Yamana Gold Inc. 2.14% inception in August 1997. The underlying fund was changed on June 1, 2003 from the Geac Computer Corporation 2.11% Elliott & Page Emerging Growth Fund to the Elliott & Page Growth Opportunities Fund. Real Resources 2.10% MLI E&P Growth Opportunities Trican Well Service 2.00% 40% 34.1 Penn West Energy Trust 1.97% 24.7 22.1 22.3 Trinidad Energy Services 1.79% 20%

−12.3 −1.6 −1.7 −2.2 Russel Metals 1.77% 0% Total 27.74% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI E&P Growth Opportunities BMO Nesbitt Burns Cdn Small Cap Index $28,000 $27,315 It was an exceptional year for the markets, commodities, $26,000 $25,346* and the currency. The S&P/TSX Composite Index climbed $24,000 over 24.13%, nearing record levels not seen since 2000. $22,000 Meanwhile, the Nesbitt Burns Small Cap Index (NBSCI) rose 19.68 % and closed the year at an all−time high. A record $20,000 crude price of $70.85 a barrel was reached on August 30, $18,000 the day after Hurricane Katrina hit. Incessant investor $16,000 demand drove gold to $541 an ounce, its highest price since $14,000

January 1981. Meanwhile, commodities such as copper, $12,000 zinc, and silver continued their uptrends, driving the $10,000 Canadian dollar to its highest level since January 1992. Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could Strong gains for the Elliot & Page Growth Opportunities be expected to vary. Fund were driven by strength in the resources and interest− sensitive sectors. The energy, financials, and materials sectors Annual compound returns (As at December 31, 2005) appreciated significantly in the NBSCI, rising 62.1%, 31.2%, and 18.9%, respectively. This table shows the historical annual compound total return of the fund compared with the BMO Nesbitt Burns Cdn Small Cap Index. In 2006, material changes will be made to the Fund, due to Manulife the adoption of a new benchmark. Effective January 1, the Since inception Fund will be using the blended NBSCI, which will include 1−year 2−year 3−year 5−year inception date income trusts representing nearly one−third of the benchmark. Sectors with significant adjustments include MLI E&P Growth 22.29% 22.18% 26.04% 13.99% 8.74% Aug 1997 Opportunities energy, materials, and financials. The energy and financial sector weightings will increase by approximately 4% each, BMO Nesbitt Burns Cdn 19.68% 16.87% 24.92% 14.85% − while the materials sector weighting will decline by nearly Small Cap Index 8%. Rate of return expectation The Fund managers are optimistic about the beginning of Over the long term, the fund is expected to outperform the Nesbitt Burns Canadian Small Cap Index. 2006. Near−term momentum remains positive, the period is seasonally strong, inflation remains benign, valuations remain reasonable, and it appears that the Fed could be near the end of its tightening phase, with the real estate market cooling.

56 Source: Bell Globemedia Publishing Inc. CANADIAN SMALL/MID CAP EQUITY Code 7191 Volatility meter Manulife Canadian Small Cap Equity Fund (Tattersall)

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MLI Cdn Small Cap Equ (Tattersall) How the underlying fund is invested Objective The fund is managed to achieve above average long−term capital growth, Information Technology 3.04% primarily through investment in common shares of listed Canadian companies with Energy 10.67% relatively small market capitalization. The manager uses a value−oriented investment Cash 12.70% Industrials 18.26% style to select stocks that will, as a group, out perform market averages over time. Materials 22.56% Other 15.92% Managed by Manulife Financial Consumer Discretionary 9.91% Financials 6.94% Fund managers Howson Tattersall − Mgmt. Team Inception date January 1999 Total assets $287.7 million Top holdings within the underlying fund (As at December 31, 2005) Lundin Mining 3.34% Gentry Resources 2.87% Historical gross returns NQL Energy Services 2.32% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since GSI Group 2.06% January 1999. To provide further historical information, the shaded area represents the Martinrea International 2.01% returns of the underlying fund for the period before the start date of the Manulife fund. Enerflex Systems 1.99% MLI Canadian Small Cap Equity Intertape Polymer Group 1.99% 40% Aur Resources 1.96% 34.6 30% Canadian Hydro Developers 1.88% 24.7 17.8 20% 15.5 Total 20.42% 9.4 10% 9.0 1.5 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Canadian Small Cap Equity BMO Nesbitt Burns Cdn Small Cap Index $28,000 $27,651* The Canadian equity markets were able to achieve a modest $26,000 $25,788 gain during the fourth quarter. A decline in the price of oil $24,000 and uncertainty over the federal election outcome $22,000 presumably sent investors to the sidelines, in spite of $20,000 reassuring words from the Finance Minister about income $18,000 trusts and lower taxes on dividend income. $16,000 $14,000 The portfolio increased by 4.4% for the quarter − about in $12,000 line with the index − but lagged for the year with a gain of $10,000 only 12.5%. Our performance was restrained by a growing $8,000 underexposure to the energy sector, minimal exposure to Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 income trusts, several problem stocks in the industrial *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could products category, plus our ongoing preference for microcap be expected to vary. names. Buying and selling were about in line with E&P Small Cap Value during the quarter, and the cash reserve increased Annual compound returns (As at December 31, 2005) from 1% to 10% as of December 31. This table shows the historical annual compound total return of the fund compared with As the fixation with energy stocks and income trusts begins the BMO Nesbitt Burns Cdn Small Cap Index. to wane, we are hoping for improved relative performance Manulife u from the f nd. We recognize that the price of oil will likely Since inception remain high by historical standards, but the recent 1−year 2−year 3−year 5−year inception date escalation in the price of energy will lead to conservation, alternative sources and increased production from existing MLI Canadian Small Cap 15.51% 16.65% 22.34% 18.31% 15.64% Jan 1999 Equity wells. This will have a moderating effect on the price of oil, but we are not convinced that this possibility is included in BMO Nesbitt Burns Cdn 19.68% 16.87% 24.92% 14.85% − the price of many oil stocks. So, we expect to replace our Small Cap Index sale candidates in the energy sector of the portfolio, but not increase the exposure significantly. Rate of return expectation The fund is expected to outperform the NB Small Cap (Weighted) Total Return Index over moving three−year annualized period by 2.0% per year.

57 Source: Bell Globemedia Publishing Inc. U.S. Equity

U.S. Equity funds are a form of foreign equity and invest in shares of U.S. companies.

These types of funds typically aim to achieve long-term capital growth by investing in shares of companies based in the United States. A share represents an ownership stake in a company; therefore, how the fund performs depends on the success of the company holdings within the fund. The fund’s performance can also be affected by such factors as currency exchange rates and economic and political trends.

These funds are ideal for investors who have a long-term focus, want to include U.S. holdings in their portfolios, and are comfortable with a higher-than-average level of volatility.

U.S. Equity funds can vary greatly depending on such factors as the size and types of companies in which they invest and the criteria the manager uses to decide the best companies to invest in.

U.S. Large Cap Equity FUND PAGE CODE NUMBER

Manulife MFC Global Pooled U.S. Index Fund 8131 59

Manulife MFC Global Pooled U.S. Equity Fund 8132 60

Manulife Fidelity Growth America Fund 8142 61

Manulife SEAMARK U.S. Equity Fund 8171 62

Manulife U.S. Equity Fund (Bernstein) 8191 63

Manulife Legg Mason U.S. Value Fund 8261 64

58 U.S. LARGE CAP EQUITY Code 8131 Volatility meter Manulife MFC Global Pooled U.S. Index Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MFC Global Pooled U.S. Equity Index How the underlying fund is invested Objective The Fund aims to achieve investment results that approximate the total Cash 4.32% return of the S&P 500 Stock Index, one of the most well−regarded benchmarks for the Consumer Discretionary 11.80% U.S. equity market. This is a passively managed fund. To achieve its investment objective, Health Care 12.24% Other 15.30% the fund will invest directly in common shares and may use derivative instruments such as Financials 20.77% futures in order to replicate the returns of the S&P 500 Stock Index. The fund may also Information Technology 15.12% invest a portion of its funds in cash. Industrials 11.30% Energy 9.15% Managed by MFC Global Investment Management (Toronto) Fund managers MFC Global Invest Mgmt (Tor)−Mgmt Team Top holdings within the underlying fund (As at December 31, 2005) Inception date January 1998 Total assets $98.4 million General Electric 3.23% Exxon Mobil 3.05% Historical gross returns Citigroup 2.14% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Microsoft 2.09% inception in January 1998.

Procter & Gamble 1.69% MLI MFC Global Pooled U.S. Index

Bank of America 1.62% 50% 40.9 Johnson & Johnson 1.56% 14.0 4.6 −6.0 −7.1 −23.2 2.9 1.3 American International Group 1.54% 0% Pfizer 1.50%

Altria Group Inc. 1.36% −50% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Total 19.78% *Only full calendar year returns are shown.

Financial markets performed largely as expected in 2005. $16,000 The S&P 500 generated a modest 4.91% (U.S.) total return, small and mid cap stocks outperformed large cap while $15,000 growth and value performed in line with each other. The $14,000

Fed continued to tighten and earnings growth moderated. $13,000 Energy prices dominated the news as oil rose 40% to close $12,000 $11,856 the year at $61 per barrel. As a result, the energy sector $11,738* was by far the top−performing sector of the stock market. $11,000 $10,000 While GDP growth seems likely to moderate as we move $9,000 further into 2006, there is plenty of positive economic news. Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Payroll employment is growing, consumer sentiment is *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could strong, wages are growing, business investment is strong, be expected to vary. and inflation remains well behaved. Annual compound returns (As at December 31, 2005) In 2006, some of the bearish factors that held back stocks in 2005 may improve. Above normal energy inventories may This table shows the historical annual compound total return of the fund compared with cause oil prices to moderate; the second year of the the S&P 500 Composite Total Return Idx($Cdn). Presidential cycle is somewhat better for stocks; the Fed will Manulife likely soon end its policy of tightening; and the deterioration Since inception of both the trade and budget deficits may moderate. 1−year 2−year 3−year 5−year inception date In each of the past two years, the stock market provided MLI MFC Global Pooled U.S. 1.31% 2.11% 2.92% −4.91% 2.02% Jan 1998 Index positive but modest returns as strong earnings growth was offset by a declining P/E ratio. For the coming year, there S&P 500 Composite Total 1.61% 2.43% 3.37% −4.40% − appears to be a good chance for both strong earnings Return Idx($Cdn) growth and an increase in the market’s valuation, thereby resulting in only the second year of positive double−digit Rate of return expectation returns since 1999. Over the long term, the fund is expected track the performance of the S&P 500 Total Return Index ($ Cdn).

59 Source: Bell Globemedia Publishing Inc. U.S. LARGE CAP EQUITY Code 8132 Volatility meter Manulife MFC Global Pooled U.S. Equity Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MFC Global Pooled U.S. Equity How the underlying fund is invested Objective The MFC Global Pooled U.S. Equity Fund is managed for aggressive growth Health Care 12.02% over a period of at least four years. The fund is invested broadly, principally in large and Consumer Discretionary 12.11% mid−capitalization stocks. Information Technology 18.08% Financials 22.85% Managed by MFC Global Investment Management (Toronto) Other 17.01% Industrials 9.07% Fund managers MFC Global Invest Mgmt (Tor)−Mgmt Team Energy 8.86% Inception date January 1998 Total assets $9.5 million Top holdings within the underlying fund (As at December 31, 2005) Bank of America 3.69% Microsoft 2.82% Historical gross returns Citigroup 2.65% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Medtronic Inc. 2.63% inception in September 1998. To provide further historical information, the shaded area Wachovia 2.61% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Fannie Mae 2.60% MLI MFC Global Pooled U.S. Equity Johnson & Johnson 2.51% MFC Global Pooled U.S. Equity

ConocoPhillips 2.43% 50% 44.3 General Electric 2.40% 19.4 11.4 8.7 5.3 −17.4 −28.9 1.4 Pepsico Inc. 2.17% 0% Total 26.51% −50% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI MFC Global Pooled U.S. Equity S&P 500 Composite Total Return Idx($Cdn) MFC Global Pooled U.S. Equity Financial markets performed largely as expected in 2005. $22,000 The S&P 500 generated a modest 4.91% (U.S.) total return, $20,000 small and mid cap stocks outperformed large cap while $18,000 growth and value performed in line with each other. The Fed continued to tighten and earnings growth moderated. $16,000

Energy prices dominated the news as oil rose 40% to close $14,000 the year at $61 per barrel. As a result, the energy sector $12,635* $12,000 was by far the top−performing sector of the stock market. $11,856 $10,000 While GDP growth seems likely to moderate as we move $8,000 further into 2006, there is plenty of positive economic news. Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Payroll employment is growing, consumer sentiment is *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could strong, wages are growing, business investment is strong, be expected to vary. and inflation remains well behaved. Annual compound returns (As at December 31, 2005) In 2006, some of the bearish factors that held back stocks in 2005 may improve. Above normal energy inventories may This table shows the historical annual compound total return of the fund compared with cause oil prices to moderate; the second year of the the S&P 500 Composite Total Return Idx($Cdn). Presidential cycle is somewhat better for stocks; the Fed will Manulife likely soon end its policy of tightening; and the deterioration Since inception of both the trade and budget deficits may moderate. 1−year 2−year 3−year 5−year inception date In each of the past two years, the stock market provided MLI MFC Global Pooled U.S. 5.32% 6.99% 5.08% −7.39% 1.72% Sep 1998 Equity positive but modest returns as strong earnings growth was offset by a declining P/E ratio. For the coming year, there S&P 500 Composite Total 1.61% 2.43% 3.37% −4.40% − appears to be a good chance for both strong earnings Return Idx($Cdn) growth and an increase in the market’s valuation, thereby resulting in only the second year of positive double−digit Rate of return expectation returns since 1999. Over the long term, the fund is expected to outperform the S&P 500 Total Return Index ($ Cdn).

60 Source: Bell Globemedia Publishing Inc. U.S. LARGE CAP EQUITY Code 8142 Volatility meter Manulife Fidelity Growth America Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Fidelity Growth America−A How the underlying fund is invested Objective The Fund seeks to achieve long−term capital growth by investing primarily in Cash 0.40% equity securities of U.S. companies. The fund may invest in small, medium and large Consumer Discretionary 13.60% companies. The portfolio manager searches for investment opportunities by using Financials 11.70% Energy 18.30% Fidelity’s traditional bottom−up investment style, selecting securities for the fund on a Information Technology 24.80% stock−by−stock basis. Other 13.90% Health Care 10.10% Managed by Fidelity Investments Canada Ltd. Consumer Staples 7.20% Fund managers John Power Top holdings within the underlying fund Inception date September 1990 Total assets $143.7 million (As at December 31, 2005) BJ Services − Exxon Mobil − Historical gross returns Genentech Inc. − Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its KLA−Tencor − inception in July 1997. To provide further historical information, the shaded area Liz Claiborne − represents the returns of the underlying fund for the period before the start date of the Manulife fund. Noble Corp. − MLI Fidelity Growth America Peabody Energy Corp − Fidelity Growth America−A

Sprint Nextel Corp. − 40% 36.8 21.9 24.5 20% 16.2 Texas Instruments − 10.1 8.0 −8.0 −6.1 −22.1 3.0 UnitedHealth Group − 0% −20% Total 25.10% −40% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Fidelity Growth America S&P 500 Composite Total Return Idx($Cdn) Fidelity Growth America−A U.S. equity markets, as represented by the S&P 500 index $28,000 rose 2.9% in Canadian−dollar terms during the fourth $26,000 quarter of 2005. The markets rose as energy prices $24,000 moderated, allowing U.S. consumer to continue to be the $22,000 engine of economic growth. The market rallied towards $20,000 $19,551 year−end on speculation that the U.S. Federal Reserve will $18,000 $18,679* soon end their tightening cycle. In the fourth quarter, the $16,000 Fund gained 1.6%, underperforming its benchmark by $14,000

1.3% and effective stock selection in the energy and $12,000 industrials sectors was the greatest contributor to the $10,000 Fund’s return, while an unfavourable overweight position Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 in the energy sector and an unfavourable underweight *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could position in the financials sector were the greatest be expected to vary. detractors from the Fund’s return. At the end of the period, the Fund’s largest overweight Annual compound returns (As at December 31, 2005) positions, relative to its benchmark index, were in the information technology and energy sectors respectively. This table shows the historical annual compound total return of the fund compared with The most notable change in exposure occurred within the the S&P 500 Composite Total Return Idx($Cdn). telecommunication services sector, which was modified from Manulife a modest underweight to a modest overweight position. The Since inception Fund’s largest underweight positions at the end of the 1−year 2−year 3−year 5−year inception date period were in the financials and industrials sector respectively. MLI Fidelity Growth America 8.03% 5.46% 6.99% −2.18% 3.76% Jul 1997 The portfolio manager, John Power, believes the long−term S&P 500 Composite Total 1.61% 2.43% 3.37% −4.40% − outlook for U.S. energy companies is extremely positive, as Return Idx($Cdn) continued supply constraints coupled with steadily increasing global demand will serve to keep energy prices at historically high levels. His notable overweight position within the Rate of return expectation information technology sector is based on his belief that The fund seeks to achieve returns comparable to, or better than, the S&P 500 Total Return Index corporations are poised to increase their technology ($ Cdn). spending. Within this sector, he favours the semiconductor industry. Conversely, he has taken a very selective approach to the industrial and financial sectors, which he believes have less favourable growth prospects and may, in many instances, be overvalued.

61 Source: Bell Globemedia Publishing Inc. U.S. LARGE CAP EQUITY Code 8171 Volatility meter Manulife SEAMARK U.S. Equity Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> SEAMARK Pooled U.S. Equity How the underlying fund is invested Objective The SEAMARK Pooled U.S. Equity Fund is managed to preserve and enhance Cash 2.07% capital through long−term capital gains with some current dividend income. The fund will Financials 11.97% invest primarily in U.S. equity securities. Industrials 11.50% Consumer Discretionary 26.22% Information Technology 23.78% Managed by SEAMARK Asset Management Ltd. Other sectors 3.05% Other 2.09% Fund managers Peter Marshall, B.Comm; George V. Loughery, CGA, CFA; and Health Care 19.32% Lance Speck, CFA.

Inception date June 1997 Total assets $140.6 million Top holdings within the underlying fund (As at December 31, 2005) Citigroup 4.05% General Electric 4.00% Historical gross returns Amgen 3.93% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Time Warner Inc. 3.86% inception in August 1997. To provide further historical information, the shaded area Comcast Corp. 3.42% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Agilent Technologies Inc. 3.20% MLI SEAMARK U.S. Equity Cisco Systems 3.11% 40% 32.2 33.5 McGraw−Hill Companies 3.00% 20% 12.8 13.5 4.2 Biomet Inc. 2.99% −22.8 −3.2 1.2 0% Wyeth 2.95% −20% Total 34.51% −40% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December, 31 2005) MLI SEAMARK U.S. Equity S&P 500 Composite Total Return Idx($Cdn) SEAMARK Pooled U.S. Equity The S&P 500 recovered from a sharp correction in October $24,000 to finish modestly higher for the quarter. The correction was $22,000 driven by renewed concerns over U.S. inflation and the level $20,000 of future economic growth. $19,000* $18,000

The Fund returned 1.78% (U.S.$), for the quarter, with the $16,000 best performing stocks in financials and energy. JP Morgan and Bank of America both out−performed the S&P 500 $14,000 $13,565 Financials index and Schlumberger, the world’s largest $12,000 oilfield services company, appreciated 15%. Record cash $10,000 flows for oil companies, maturing oilfields and future Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 development from more remote and less conventional *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could sources, bode well for Schlumberger going forward. As in be expected to vary. Canada, financials and materials stocks were the S&P 500’s best performers. A pullback by technology, health care and Annual compound returns (As at December 31, 2005) consumer holdings, that have generally done well this year, led the Fund to lag the index. This table shows the historical annual compound total return of the fund compared with the S&P 500 Composite Total Return Idx($Cdn). Heading into 2006, the Fund is focused on health care, Manulife media and entertainment, and technology. In health care, Since inception earnings growth for pharmaceutical companies is set to re− 1−year 2−year 3−year 5−year inception date accelerate as revenue losses from patent expirations subside and companies continue to restructure their cost bases. In MLI SEAMARK U.S. Equity 1.19% −1.02% 3.61% −2.19% 6.58% Aug 1997 media & entertainment, companies such as Viacom and S&P 500 Composite Total 1.61% 2.43% 3.37% −4.40% − Time Warner continue to restructure in order to unlock Return Idx($Cdn) shareholder value. With increasing demand for content and historically low valuations these stocks provide solid value. In technology, we like the prospects for Teradyne and Applied Rate of return expectation Materials, two semiconductor equipment stocks which were The fund’s performance is benchmarked against the S&P 500 Total Return Index ($ Cdn). Returns in weak in 2005 as the semiconductor industry struggled with excess of this benchmark, is an objective only, and is not guaranteed by any party. excess inventory and manufacturing capacity. With excess inventory worked off and a transition underway to faster and more complex chips, these companies should benefit from increased industry spending.

62 Source: Bell Globemedia Publishing Inc. U.S. LARGE CAP EQUITY Code 8191 Volatility meter Manulife U.S. Equity Fund (Bernstein)

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MLI U.S. Equity (Bernstein) How the underlying fund is invested Objective The fund is managed to achieve long−term capital appreciation, primarily Consumer Discretionary 13.29% through investments in equity securities of large, well−capitalized U.S. corporations. The Consumer Staples 12.40% manager’s approach is research based and value−oriented. Other 16.22% Financials 24.94% Managed by Manulife Financial Information Technology 13.60% Industrials 10.49% Fund managers Alliance Bernstein Inv Mgmt.−Mgmt. Team Energy 9.06% Inception date January 1999 Total assets $318.9 million Top holdings within the underlying fund (As at December 31, 2005) General Electric 3.72% Citigroup 2.72% Historical gross returns Exxon Mobil 2.70% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Microsoft 2.63% inception in October 2001. To provide further historical information, the shaded area Procter & Gamble 2.08% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Bank of America 2.05% MLI U.S. Equity Altria Group Inc. 1.93% MLI U.S. Equity (Bernstein)

Intel 1.87% 40% 22.6 Pfizer 1.58% 20% 3.9 3.3 IBM 1.57% −12.6 −9.1 −17.7 1.4 0% Total 22.85% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI U.S. Equity S&P 500 Composite Total Return Idx($Cdn) MLI U.S. Equity (Bernstein) The S&P 500 increased 2.8% for the quarter as increased $14,000 hopes that the Federal Reserve is nearing the end of its rate $13,000 tightening cycle offset concerns of an economic slowdown $12,000 in 2006. Positive economic data provided an additional boost to U.S. and global equity markets. Specifically, reports $11,000 indicated that economic growth, retail sales excluding $10,000 automobiles and consumer confidence were all higher. Growth stocks outperformed their value counterparts as the $9,000 $8,741* $8,610 Russell 1000 Growth Index rose 3.7% compared to a 1.9% $8,000 increase for the Russell 1000 Value Index. Cyclically sensitive $7,000 stocks gained, including industrial resources and Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 transportation stocks. In contrast, energy shares fell as oil *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could prices retreated from their recent highs. be expected to vary.

Within the U.S. equity market, valuation differences Annual compound returns (As at December 31, 2005) between attractively−priced and expensive stocks are unusually compressed and the value opportunity remains This table shows the historical annual compound total return of the fund compared with below average. A central tenet of our strategy is to keep the the S&P 500 Composite Total Return Idx($Cdn). risks in the portfolio proportional to the value opportunity Manulife we identify. We continue to use our large, bottom−up Since inception research effort to uncover value opportunities that do exist 1−year 2−year 3−year 5−year inception date among individual stocks. MLI U.S. Equity 1.38% 2.35% 2.86% − −0.33% Oct 2001 S&P 500 Composite Total 1.61% 2.43% 3.37% −4.40% − Return Idx($Cdn)

Rate of return expectation The fund is expected to outperform the S&P 500 Total Return Index ($ Cdn) over moving three−year annualized period by 1.5% per year.

63 Source: Bell Globemedia Publishing Inc. U.S. LARGE CAP EQUITY Code 8261 Volatility meter Manulife Legg Mason U.S. Value Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Legg Mason U.S. Value Pool How the underlying fund is invested Objective The Legg Mason U.S. Value Fund is managed to invest primarily in common Financials 16.20% shares of companies based in the United States that the portfolio advisor views as Telecommunication Services 9.90% undervalued and that offer potential for above average total returns in the form of capital Health Care 17.60% gains over a longer−term. A portion of the fund may invest in large foreign companies Consumer Discretionary 26.30% traded on non−U.S. exchanges. Information Technology 16.70% Industrials 7.50% Managed by Legg Mason Canada Inc. Other 5.80% Fund managers Bill Miller, CFA and Mary Chris Gay Top holdings within the underlying fund Inception date May 2000 Total assets $626.8 million (As at December 31, 2005) Sprint Nextel 6.44% UnitedHealth Group 5.69% Historical gross returns Amazon.com 5.58% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Tyco International 5.52% inception in October 2001. To provide further historical information, the shaded area Google 4.38% represents the returns of the underlying fund for the period before the start date of the Manulife fund. AES Corp. 4.16% MLI Legg Mason U.S. Value JP Morgan Chase & Co 3.80% Legg Mason U.S. Value Pool

eBay 3.42% 20% 17.9

10% Aetna 3.28% 4.8 4.0 −2.7 −18.7 Qwest Communications Intl. 3.21% 0% −10% Total 45.48% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Legg Mason U.S. Value S&P 500 Composite Total Return Idx($Cdn) Legg Mason U.S. Value Pool The Fund’s fundamental investment objective is investments $10,000 primarily in equity securities of companies based in the $9,087* United States that the portfolio advisors view as undervalued $9,000 and that offer potential for above average total returns in the form of capital gains over a longer term. A portion of $8,000 the fund may invest in large foreign companies traded on $7,259 $7,000 non−U.S. exchanges.

$6,000 The major U.S. equity market indices posted respectable returns for the fourth quarter of 2005, primarily driven by $5,000 strong returns in November. A powerful rally in both Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 F absolute and relative terms led this und’s manager to the *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could fifteenth consecutive calendar year of outperformance be expected to vary. relative to the S&P 500 Index. Holdings in the electronic commerce sector rallied strongly. Google (+31.1%) posted Annual compound returns (As at December 31, 2005) stronger−than−expected quarterly results, Expedia (+21.0%) responded to strong revenue and profit growth along This table shows the historical annual compound total return of the fund compared with with a turnaround at its Hotels.com subsidiary, while Yahoo the S&P 500 Composite Total Return Idx($Cdn). (+15.8%) saw its differentiation strategy bear fruit. The Manulife long−term growth potential for the managed care industry Since inception was recognized in steady performance by these holdings. 1−year 2−year 3−year 5−year inception date Substantial cost savings from the repurchase of Qwest’s high−coupon bonds was rewarded with a nearly 40% MLI Legg Mason U.S. Value 4.03% 4.43% 8.73% − 2.67% Oct 2001 advance in that stock in the quarter. S&P 500 Composite Total 1.61% 2.43% 3.37% −4.40% − Return Idx($Cdn) Stocks have advanced by less than their underlying earnings growth rate for the last two years, resulting in a compression of valuations. An optimistic economic outlook and the Rate of return expectation anticipated end to Federal Reserve Board tightening should Over the long−term, the fund is expected to outperform the S&P 500 Index ($ Cdn). allow for some multiple expansion in 2006. Combined with profit growth of roughly 10%, and a couple of points of dividend yield, this should result in returns in the 12% to 15% range for the year. We think large−capitalization will outperform small caps, on a combination of more attractive valuation and superior cash flow generation, and also that growth stocks will outperform value stocks. 64 Source: Bell Globemedia Publishing Inc. International/Global Equity

International Equity funds invest in shares of non-North American companies.

Global Equity funds typically aim to achieve long-term capital growth by investing in shares of companies in Asia, Europe and the Americas.

A share represents an ownership stake in a company; therefore, how the fund performs depends on the success of the company holdings within the fund. The fund’s performance can also be affected by such factors as currency exchange rates and economic and political trends around the world.

International/Global Equity funds are ideal for investors who have a long-term focus, want to include foreign holdings in their portfolio, and are comfortable with a higher degree of volatility.

These funds vary greatly depending on such factors as the size and types of companies in which they invest, the countries or regions in which they invest, and the criteria the fund manager uses to decide the best companies to invest in.

International Equity FUND PAGE CODE NUMBER

Manulife SEAMARK International Equity Fund 8172 66

Manulife International Equity Fund (Templeton) 8192 67

Manulife Jarislowsky Fraser International Equity Fund 8241 68

Manulife BGI International Equity Index Fund 8321 69

Global Equity

Manulife Fidelity International Portfolio Fund 8141 70

Manulife McLean Budden Global Equity Fund 8161 71

Manulife Trimark Fund 8181 72

65 INTERNATIONAL EQUITY Code 8172 Volatility meter Manulife SEAMARK International Equity Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> SEAMARK Pooled International Equity How the underlying fund is invested Objective The SEAMARK International Equity Fund is managed to preserve and Mexico 9.05% enhance capital through long−term, capital gains with some dividend income. The fund Spain 4.93% invests primarily in the equity securities of companies domiciled outside of Canada and Japan 7.99% Other 20.90% the United States. United Kingdom 35.67% Switzerland 10.43% Managed by SEAMARK Asset Management Ltd. Netherlands 5.68% Germany 5.35% Fund managers Peter Marshall, B.Comm; George V. Loughery, CGA, CFA; and Lance Speck, CFA. Top holdings within the underlying fund Inception date June 1997 Total assets $63.8 million (As at December 31, 2005) Telefonica SA 4.93% Royal Bank Scotland Group PLC 4.55% Historical gross returns Barclays Bank PLC 4.43% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Pearson PLC 4.32% inception in August 1997. To provide further historical information, the shaded area Nestle 4.24% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Nokia 4.10% MLI SEAMARK International Equity Cemex 4.00% 60% XL Capital 3.89% 41.8 40% 38.0 Canon Inc. 3.47% 20% 14.3 8.9 6.1 Rio Tinto 3.28% −11.8 −18.0 2.3 0% Total 41.21% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI SEAMARK International Equity MSCI EAFE ($ Cdn) SEAMARK Pooled International Equity Stock selection, rather than country allocation, remains the $24,000 key focus of the International Equity Fund as we believe this $22,000 a better source of value added over longer periods of time. $20,000 $19,886* The Fund outperformed the index during the quarter $18,000 despite a low exposure to Japan, which was the strongest $16,000 performing global market during the period. $14,000 $12,977 $12,000 From its low at the end of July, the Japanese market has $10,000

gained more than 36%. Such a macro driven move of an $8,000 equity market is rare and should not be considered $6,000 sustainable or even stable. Fundamentals are indeed on the Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 mend in Japan but they have not improved nearly as much *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could as the market has appreciated in the past three months. The be expected to vary. health of most Japanese companies continues to lag their global peers. Annual compound returns (As at December 31, 2005)

Looking out into 2006 we expect the market to reward This table shows the historical annual compound total return of the fund compared with companies that deliver steady growth over time without a the MSCI EAFE ($ Cdn). reliance on a strong upward trend in commodity prices. The Manulife - portfolio is well positioned to benefit from current strength Since inception in base metal prices through our holdings in BHP Billiton and 1−year 2−year 3−year 5−year inception date Rio Tinto. As the commodity cycle continues, there may be an opportunity to capture these gains. MLI SEAMARK 6.13% 4.17% 5.74% −3.10% 7.92% Aug 1997 International Equity MSCI EAFE ($ Cdn) 10.45% 11.42% 12.23% −0.22% −

Rate of return expectation The fund’s performance is benchmarked against the MSCI EAFE Index ($ Cdn). Returns in excess of this benchmark, is an objective only, and is not guaranteed by any party.

66 Source: Bell Globemedia Publishing Inc. INTERNATIONAL EQUITY Code 8192 Volatility meter Manulife International Equity Fund (Templeton)

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MLI International Equ (Templeton) How the underlying fund is invested Objective The fund is managed to achieve long−term capital appreciation, primarily Switzerland 4.99% through investments in equity securities of companies outside Canada and the United Netherlands 9.13% States. Franklin Templeton’s investment philosophy is based on identifying undervalued France 7.29% United Kingdom 22.99% companies that, over time, may produce the greatest share price returns with minimum Other 30.68% risk. Bottom up analysis and a worldwide network of experienced research professionals Japan 13.28% are used to identify undervalued stocks. Korea 5.99% Hong Kong 5.65% Managed by Manulife Financial Fund managers Franklin Templeton Mgmt − Mgmt. Team Top holdings within the underlying fund (As at December 31, 2005) Inception date January 1999 Total assets $350.8 million Kookmin Bank 1.94% BAE Systems Canada 1.91% Historical gross returns Nomura Holdings Inc. 1.88% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Cheung Kong Hld 1.64% inception in October 2001. To provide further historical information, the shaded area Samsung Electronics 1.61% represents the returns of the underlying fund for the period before the start date of the Manulife fund. UBS AG 1.58% MLI International Equity ING Groep NV 1.54% MLI International Equ (Templeton) 19.8 CI Master LP 1.53% 20% 15.6 14.4 9.8 10% Accor Sa Adr 1.51% 3.7 −8.0 −18.2 Securitas AB B 1.50% 0% −10% Total 16.64% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI International Equity MSCI EAFE ($ Cdn) MLI International Equ (Templeton) $14,000 In a year marked by record−breaking energy prices, the $13,569* fourth quarter posted a good performance. During that $13,000 same period, the European Central Bank raised rates 25 $12,000 basis points to 2.25% for the first time in 29 months due to $11,000 excess liquidity concerns and the more solid footing of the $10,619 $10,000 economy. Crude oil prices declined slightly while natural gas became the topic of a bitter dispute between Moscow and $9,000 Kiev over Russian natural gas exports transiting through $8,000 Ukraine. $7,000

$6,000 Meanwhile corporate profit growth in the U.S., Japan, and Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Germany was very strong. Stock market performance, *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could particularly in the non−U.S. markets, continued to reflect the be expected to vary. good news. Foreign investors helped push the Nikkei Index beyond the 15 000 mark with an inflow of capital into Annual compound returns (As at December 31, 2005) Japanese equities. However, only a select group of Japanese companies have met our valuation parameters for stock This table shows the historical annual compound total return of the fund compared with selection, and as such we have added them to our bargain the MSCI EAFE ($ Cdn). list. Manulife We have found increasing value in the global Since inception telecommunications industry, particularly in Europe. Over the 1−year 2−year 3−year 5−year inception date past several years, telecom companies have focused on MLI International Equity 9.85% 12.12% 13.27% − 6.55% Oct 2001 cutting costs, repairing balance sheets, and growing cash flow and are now returning cash to shareholders. Indeed, MSCI EAFE ($ Cdn) 10.45% 11.42% 12.23% −0.22% − the dividend yield for many telecommunications stocks is now more attractive than European utility stocks, a phenomenon not seen in the past ten plus years. Rate of return expectation We believe that the broad−based economic expansion The fund is expected to outperform the MSCI EAFE Total Return Index ($ Cdn) over moving three−year should continue over the foreseeable future. In our view, annualized period by 2.0% per year. populating our portfolios with stocks that we consider undervalued is the correct approach to address our clients’ investment needs.

67 Source: Bell Globemedia Publishing Inc. INTERNATIONAL EQUITY Code 8241 Volatility meter Manulife Jarislowsky Fraser International Equity Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> JF International Equity How the underlying fund is invested Objective The Jarislowsky Fraser International Equity Fund focuses on the large Other 60.00% capitalization multinationals, which have demonstrated global leadership in their sector and which have a minimum of $1 billion US of market capitalization. These companies United Kingdom 25.30% have consistent growth records and high returns on invested capital and dominant market positions. Japan 14.70% Managed by Jarislowsky Fraser Ltd. Fund managers Jarislowsky Fraser − Mgmt. Team Top holdings within the underlying fund Inception date April 1995 Total assets $2,477.0 million (As at December 31, 2005) ING Groep NV 3.80% AXA 3.60% Historical gross returns Total SA 3.60% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Reed Elsevier NV 3.10% inception in October 2001. To provide further historical information, the shaded area Banco Santander S A 3.00% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Fresenius Med Care Hlds Pfd 3.00% MLI JF International Equity Nestle 2.90% JF International Equity

Royal Bank of Scotland Group 2.90% 40% 34.8 27.7 20.1 Air Liquide(L) 2.80% 20% 15.1 9.1 6.6 5.9 5.0 HSBC Holdings PLC 2.80% −10.7 −15.1 0% Total 31.50% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI JF International Equity MSCI EAFE ($ Cdn) JF International Equity World economies remain unbalanced with the heavily $26,000 indebted American consumer on the demand side and the $24,000 Chinese producer on the supply side. With a U.S. current $22,000 $22,294* account deficit nearing $800 billion (70% of the world’s $20,000 external deficits), the state of disequilibrium in the world is $18,000 increasingly precarious. So far, those imbalances have been $16,000 $15,381 sustained by Asia’s huge savings surplus as well as the oil $14,000 exporting countries. The year 2006 could be the time when $12,000

U.S. consumption finally slows. The effects would be felt $10,000 worldwide with lesser developed economies hurting the $8,000 most. Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could The Jarislowsky Fraser International Equity Fund returned be expected to vary. 2.3% compared with 4.8 % for the MSCI EAFE Index ($ Cdn) for the fourth quarter of 2005. Annual compound returns (As at December 31, 2005)

We believe it will be problematic for value and cyclical stocks This table shows the historical annual compound total return of the fund compared with to extend their 2005 rally into 2006 as it will be difficult to the MSCI EAFE ($ Cdn). sustain the same level of earnings growth. Another Manulife characteristic of our portfolio is its greater exposure to large Since inception capitalization stocks than the MSCI EAFE Index. Large 1−year 2−year 3−year 5−year inception date capitalization stocks have significantly underperformed the Index over the last few years and are currently inexpensive MLI JF International Equity 4.97% 5.43% 5.81% − 1.26% Oct 2001 relative to small capitalization stocks. The expected slowing MSCI EAFE ($ Cdn) 10.45% 11.42% 12.23% −0.22% − in earnings momentum for the overall market should therefore bode well for the relative outperformance of large capitalization stocks and our portfolio. Rate of return expectation Over the long term, this fund is expected to outperform the MSCI EAFE Index ($ Cdn).

68 Source: Bell Globemedia Publishing Inc. INTERNATIONAL EQUITY Code 8321 Volatility meter Manulife BGI International Equity Index Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> BGI Daily EAFE Equity Index How the underlying fund is invested Objective The BGICL Daily EAFE Equity Index Fund’s objective is to match the returns of Netherlands 4.90% the MSCI EAFE Index ("index") as closely as possible. BGICL uses an indexing approach, Switzerland 6.86% where they own assets to match those of the index, in about the same names, weights, France 8.95% United Kingdom 22.78% sectors, and countries. The index currently contains over 1000 of the world’s largest Japan 25.65% publicly traded firms, in 21 countries that are in the developed markets outside North Other 18.94% America. This fund is considered foreign in registered plans. Germany 6.71% Australia 5.21% Managed by Barclays Global Investors Canada Ltd. Fund managers Rajiv Silgardo Top holdings within the underlying fund (As at December 31, 2005) Inception date April 1999 Total assets $288.1 million BP PLC 2.18% HSBC Holdings PLC 1.77% Historical gross returns Toyota Motor Corporation 1.47% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its GlaxoSmithKline PLC 1.44% inception in November 2003. To provide further historical information, the shaded area Total SA 1.37% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Vodafone Group PLC 1.33% MLI BGI International Eq Index Royal Dutch Shell PLC 1.21% BGI Daily EAFE Equity Index

Novartis AG 1.19% 20% 13.2 11.2 11.2 Nestle SA 1.18% 10% −10.8 −16.3 −16.6 Roche Holdings 1.03% 0% −10% Total 14.17% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI BGI International Eq Index MSCI EAFE ($ Cdn) BGI Daily EAFE Equity Index Continental Europe seems to be experiencing a recovery $13,000 with solid gains in France, Germany and Switzerland. $12,000 Business confidence has returned across the region, $11,000 unemployment has begun to fall and corporate earnings are $10,614 better than expected. Consumer spending tends to lag due $10,000 $9,962* to the cumbersome labour laws in Europe, but as $9,000 unemployment slowly decreases, spending will improve. $8,000

In the UK, consumer spending picked up in the fourth $7,000 quarter, but is expected to be sluggish going forward. Some $6,000 of the reasons include large consumer debt burdens, low Mar99 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 unemployment and weak productivity growth. Other non− *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could Continental countries such as Norway continue to see rising be expected to vary. equity markets as demand for oil (Norway) and financial services (Switzerland) continue to increase. Annual compound returns (As at December 31, 2005)

Over the past six months, foreigners’ net investment in This table shows the historical annual compound total return of the fund compared with Japanese equities have surged to the strongest level in more the MSCI EAFE ($ Cdn). than a decade, helping to explain why Japan’s stock market Manulife has leapt almost 40% since its low back in April. An upturn Since inception in consumer spending and hiring has kindled hopes that 1−year 2−year 3−year 5−year inception date this time Japan’s recovery may be sustained, while its export−dominated stock market is expected to benefit from MLI BGI International Eq 11.25% 11.24% − − 13.29% Nov 2003 Index the global upswing. MSCI EAFE ($ Cdn) 10.45% 11.42% 12.23% −0.22% −

Rate of return expectation Over the long term, this fund is expected to track the return and risk profile of the MSCI EAFE Index ($ Cdn).

69 Source: Bell Globemedia Publishing Inc. GLOBAL EQUITY Code 8141 Volatility meter Manulife Fidelity International Portfolio Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Fidelity International Portfolio−A How the underlying fund is invested Objective This fund invests primarily in equity securities of companies anywhere in the United Kingdom 9.70% world with the objective of achieving long−term capital growth. The fund is not subject Australia 2.90% to any geographic constraints with regard to the allocation of portfolio assets among Canada 5.40% Other 18.60% different markets. United States 41.70% Japan 14.70% Managed by Fidelity Investments Canada Ltd. Switzerland 3.20% Germany 3.80% Fund managers Richard Habermann, BA, MBA. Inception date November 1987 Total assets $1,337.2 million Top holdings within the underlying fund (As at December 31, 2005) BP PLC − Ericsson LM Telephone − Historical gross returns Genentech Inc. − Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its GlaxoSmithKline PLC − inception in July 1997. To provide further historical information, the shaded area Goldman Sachs − represents the returns of the underlying fund for the period before the start date of the Manulife fund. Monster Worldwide − MLI Fidelity Int’l Portfolio Novartis AG − Fidelity International Portfolio−A

Peabody Energy Corp − 40% 27.7 27.8 23.7 Total SA − 19.4 20% 13.5 11.8 6.9 Univision Communication − −7.3 −7.9 −17.7 0% Total 10.10% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI Fidelity Int’l Portfolio MSCI World ($ Cdn) Fidelity International Portfolio−A Global equity markets performed well during the fourth $24,000 quarter of 2005, with the MSCI World index gaining 3.7% $22,000 $21,922* (all returns in Canadian−dollar terms). The Japanese equity $20,000 market posted strong gains, advancing (+13%), followed by $18,000 the Asia ex−Japan region (+7.0%) and the U.S. (+2.9%). $17,129 The European equity market lagged the other regions but $16,000 still posted positive returns (+2.6%). Japanese equities mirrored the strong gains of the previous quarter, surging to $14,000 a five−year high. Improving economic conditions and $12,000 earnings growth continued to attract overseas investors to $10,000 Japanese equities. The financials, industrials, and materials Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 sectors performed particularly well with the latter sector *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could benefiting from rising gold prices, which broke through the be expected to vary. $500 US barrier in December. Weaker performance was seen in the energy and telecommunication−services sectors. Annual compound returns (As at December 31, 2005) Energy prices fell to more moderate levels due to a softening in demand. The Fund rose 3.7% during the fourth quarter, This table shows the historical annual compound total return of the fund compared with trailing the return of its benchmark index slightly. Security the MSCI World ($ Cdn). selection was the primary driver of relative returns, Manulife particularly within the Japanese market. The largest Since inception detractor from performance was being overweight the 1−year 2−year 3−year 5−year inception date underperforming energy sector. Lead portfolio manager, Dick Habermann, continues to MLI Fidelity Int’l Portfolio 11.77% 9.31% 10.69% 0.57% 5.57% Jul 1997 observe differing levels of strength in global economies. MSCI World ($ Cdn) 6.58% 6.96% 7.78% −2.41% − Persistently high oil prices and strong raw material demand in China are continuing themes. Mr. Habermann is underweighted in the U.S. where continued interest rate hikes and sustained high energy prices have negatively Rate of return expectation impacted consumer sentiment. European stocks are also The fund seeks to achieve returns comparable to, or better than, the MSCI World Index ($ Cdn). underweighted, despite improved corporate earnings, structural problems persist. Japan is overweight in the Fund and Mr. Habermann remains positive in his outlook for the Japanese market.

Source: Bell Globemedia Publishing Inc. GLOBAL EQUITY Code 8161 Volatility meter Manulife McLean Budden Global Equity Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> MB Global Equity How the underlying fund is invested Objective The McLean Budden Global Equity Fund is managed to provide a superior Japan 10.27% rate of return, primarily through capital appreciation. The fund invests in a diversified Sweden 2.18% portfolio of 60−80 non−Canadian equities. Security selections emphasize large companies Germany 7.25% Other 14.44% with prospects for above average earnings growth. United States 43.85% United Kingdom 13.22% Managed by McLean Budden Limited France 3.61% Switzerland 5.18% Fund managers Mary Hallward, BA, MBA; Bruce Murray; Bill Giblin; Brian Dawson, BA, CFA; Bruce MacNabb; and Benoit Paradis. Top holdings within the underlying fund Inception date June 1996 Total assets $1,505.6 million (As at December 31, 2005) Citigroup 2.95% Pfizer 2.37% Historical gross returns BP PLC 2.08% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Deutsche Bk−Adr 1.94% inception in July 1997. To provide further historical information, the shaded area Toyota 1.94% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Microsoft 1.86% MLI McLean Budden Global Equity Fannie Mae 1.76% MB Global Equity

Alcoa 1.72% 40% 29.0 20.9 24.4 Nestle 1.49% 20% 8.5 5.5 5.7 HSBC Holdings PLC 1.48% 1.4 −6.6 −17.6 0% Total 19.59% −20% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005) MLI McLean Budden Global Equity MSCI World ($ Cdn) MB Global Equity Most global equity markets generated positive returns $22,000 during the quarter despite continued tightening by several $20,000 $19,235* major central banks. The Bank of Canada and the U.S. $18,000 Federal Reserve increased overnight rates by 50 basis points $16,384 during the period, while the European Central Bank $16,000 announced its first interest rate increase in five years moving $14,000 the region’s benchmark rate off a six−decade low. $12,000

The Fund posted a solid absolute return and outperformed $10,000 the Index for the quarter due to good stock selection in $8,000 energy (Transocean and Schlumberger) which more than Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 offset weak results in telecommunication services (France *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could Telecom and NTT). Overall sector allocation was relatively be expected to vary. neutral. Annual compound returns (As at December 31, 2005) There was a significant amount of activity during the quarter as six companies were added and seven eliminated. The This table shows the historical annual compound total return of the fund compared with Fund increased its weighting in materials and utilities while the MSCI World ($ Cdn). lowering exposure to consumer discretionary and financials. Manulife There was no significant activity in energy, however, Since inception exposure to industrials was raised as the addition of Fanuc 1−year 2−year 3−year 5−year inception date and buying in Deutsche Post offset selling in Fluor and the elimination of ABB. MLI McLean Budden Global 5.69% 5.58% 6.56% −1.41% 5.45% Jul 1997 Equity MSCI World ($ Cdn) 6.58% 6.96% 7.78% −2.41% −

Rate of return expectation The fund is expected to outperform the MSCI World Index ($ Cdn) over a moving four−year annualized period by 1.0% per year.

71 Source: Bell Globemedia Publishing Inc. GLOBAL EQUITY Code 8181 Volatility meter Manulife Trimark Fund

Based on three−year standard deviation from Globe HySales

UNDERLYING FUND −> Trimark Fund How the underlying fund is invested Objective The Trimark Fund seeks to achieve strong capital growth with a high degree Other 7.64% of reliability over the long term. The fund invests primarily in equities of companies France 4.78% anywhere in the world. Ireland 7.39% United Kingdom 21.00% United States 37.55% Managed by AIM Trimark Investments Mexico 11.16% Netherlands 5.38% Fund managers Tye Bousada, CFA; and Dana Love, MSc, CFA. Japan 5.10% Inception date September 1981 Total assets $2,578.6 million Top holdings within the underlying fund (As at December 31, 2005) Cemex 5.10% WPP Group 4.48% Historical gross returns Reed Elsevier PLC 4.41% Gross rates of return are shown before investment management fees have been deducted. The solid area represents the gross returns of the Manulife fund since its Grupo Televisa 4.01% inception in October 1997. To provide further historical information, the shaded area Sherwin−Williams Co. 3.23% represents the returns of the underlying fund for the period before the start date of the Manulife fund. Engelhard Corp. 3.16% MLI Trimark Smiths Group PLC 3.14% Trimark Fund − SC

Canon Inc. 3.11% 20% 16.6 17.9 17.1 14.2 11.7 Oracle 3.10% 9.4 10% 7.7 6.6 6.8

Compass Group PLC 3.07% −4.1 0% Total 36.81% −10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

*Only full calendar year returns are shown.

Overall past performance This graph shows how a $10,000 investment in this fund would have changed in value over time, based on gross Underlying fund commentary returns. (As at December 31, 2005). MLI Trimark MSCI World ($ Cdn) Trimark Fund − SC $28,000 Today, there is a consensus that the world is running out of $26,561* oil, natural gas and base/precious metals, and as such, $26,000 buying into companies that will benefit from these rising $24,000 commodity prices is the smart thing to do. However, the $22,000 portfolio management team believes that consensus can be $20,000 very dangerous for investing. The consensus on emerging $18,000 $17,129 markets 10 years ago and "new economy" businesses in the $16,000 technology, media and telecommunications sectors five $14,000

years ago have proven to be destructive to returns over long $12,000 periods of time. $10,000 Jan96 Dec96 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05

The team maintains they are not experts in forecasting *For illustration purposes only. Includes mutual/pooled fund performance as indicated. Actual fund performance could commodity prices in the short term. As such, they have shied be expected to vary. away from investing in businesses whose fortunes depend on commodity prices. The higher the price goes, the more Annual compound returns (As at December 31, 2005) people will look for a substitute or just simply use less of it. At the same time, the higher priced commodity leads to This table shows the historical annual compound total return of the fund compared with more supply coming on stream as producers of the the MSCI World ($ Cdn). commodity try to capitalize on the high prices. The Manulife combination of falling demand and increasing supply always Since inception leads to lower prices of a commodity product. The team 1−year 2−year 3−year 5−year inception date does not believe this time is different. MLI Trimark 6.78% 6.67% 7.59% 5.95% 8.22% Oct 1997 Looking forward, the team is encouraged by the progress of MSCI World ($ Cdn) 6.58% 6.96% 7.78% −2.41% − the companies in the Fund and their long−term prospects. In a market that continues to be increasingly focused on short− term results and "consensus" investing, the team continues to firmly believe that investors who can think in terms of Rate of return expectation longer time periods, such as three to five years, should stand To be the top of its respective category over the long term, while striving to outperform the MSCI to benefit. As always, the portfolio management team World Index ($ Cdn). continually strives to upgrade the quality of the portfolio with the long term in mind.

72 Source: Bell Globemedia Publishing Inc. i-Watch

The philosophy

The Investment Management Services (IMS) team focuses Reflecting this viewpoint, Manulife Financial’s selection on quality, not quantity. They believe past performance is process includes an in-depth review of factors that not an accurate indicator of future performance, but determine the underlying quality of the fund manager. rather high-quality investment firms who adhere to IMS emphasizes their qualitative review in the decision- documented investment policies and procedures are more making process and screens for the following qualities: likely to deliver superior results over time. It is their job to • The stability of the organization, including succession monitor the fund managers on Manulife's platform so planning and adherence to a code of ethics. investors don’t have to. They understand how important it • The depth, quality and overall experience level of the is for Manulife Financial’s stakeholders to have sufficient people managing the assets. information to make prudent investment decisions. This is why i-Watch exists. • A clearly defined investment process that has been applied consistently over time.

Investment Management Services • A record of performance that compares favourably to appropriate benchmarks and peer managers. One of Manulife Financial’s core competencies is providing investment management services in the countries in which • Risk characteristics that are in line with investment we operate, including the U.S., Canada, Hong Kong, Japan, mandates. and other countries in the Far East. In Canada, the The IMS team of independent professionals get ‘behind Investment Management Services team is comprised of a the numbers’ by visiting and interviewing fund managers team of analysts and industry professionals whose on a regular basis, probing issues in a way that can only credentials match professionals in the most respected come from years of experience. investment consulting firms.

By operating objectively and independently of any business Ongoing monitoring process units, the IMS team ensures fund partners meet stringent While the selection process is important, the ongoing requirements for fund management. Given that money monitoring process makes i-Watch unique. Once an management is a global concern, team members often investment fund is selected, the IMS team continues to consult with their Manulife counterparts throughout the apply the same level of analysis used to select the fund world. Fund partners adhere to the same best practices manager originally. With regular on-site due diligence particularly when IMS is selecting or monitoring investment meetings, the IMS team conducts ongoing systematic funds representing non-North American mandates. reviews of every fund available through Manulife Financial. The due diligence review includes a comprehensive i-Watch examination of the evolving characteristics of the fund and Fund selection face-to-face meetings with the fund manager. Funds available through Manulife Financial are screened and We believe in forming long-term relationships with our selected using a strict process. Performance is one screening manager partners. If a fund fails to live up to its mandate, criterion, but is not the most important determinant of we will work with the fund manager to address specific future returns. In IMS’ view, the consideration of an concerns. If these additional steps fail to address our investment firm’s qualitative aspects, together with its expectations, the fund manager will be replaced or the quantitative aspects, is a better indicator of the fund’s long- mandate will be capped. The choice of actions is based on term viability. minimizing any disruption to investors.

73 Statement of Investment Policies, Procedures and Goals

Pension legislation requirements • Provide plan members information received from the investment agencies in connection with the various Pension law requires plan sponsors to establish investment alternatives offered under the plan. appropriate policies and investment strategies for their • Review and approve any benefit payments from the pension plan assets. A sound governance plan includes a plan. statement of investment policies, procedures and goals that is commonly referred to as the “SIPP&G”. This • Maintain overall responsibility for the administration of documentation helps ensure the pension plan is operating plan member accounts. in the best interests of its plan members. A sound governance plan outlines the steps and processes plan Manulife Financial’s obligations sponsors need to follow to set-up and maintain a pension As the plan fiduciary and fund custodian, Manulife is plan. As part of their responsibilities, plan sponsors must required to: exercise due diligence in selecting and monitoring investment managers; offer a range of investment • Establish and maintain records for each plan member. alternatives; give plan members the opportunity to make • Maintain detailed records of all plan transactions. regular investment changes; and provide plan members • Select and monitor the investment agencies. with detailed investment information. • Establish, monitor and review performance Clearly identifying and defining the roles and benchmarks for the investment funds. responsibilities of each participant in the governance and • Select and offer an appropriate range of investment operation of the pension plan is an important part of this funds to allow for an acceptable level of liquidity and plan management. Pension management roles and to provide for investment diversification to maximize activities are identified in the lists that follow. return and minimize risk. • Process allocations to the funds and disbursements of Plan sponsor obligations benefit payments from the fund as directed by the The plan sponsor is required to: plan sponsor.

• Select the fund custodian to administer the pension • Provide plan sponsors with regular investment reviews fund assets. obtained by investment agencies.

• Communicate with plan members on plan Fund manager obligations documentation. • Establish and review, a statement of investment policies, As the investment agency, the fund manager is required to: procedures and goals annually or as required. • Present current economic analysis and related • Educate and inform plan members about the risk and investment strategy. return characteristics of each asset class and the • Be responsible for the timing and selection of benefits of diversification. individual securities. • Communicate information on historic rates of return • Be responsible for maintaining an appropriate level of and fees for each investment option, the expected liquidity through diligent cash management and timely future returns and the importance of diversification. scheduling of maturities. • Monitor fund performance and report results to the • Present regular reviews in investment performance. plan members. • Monitor the investment performance of the individual • Select the classes of assets and investment alternatives securities to meet or exceed established performance that are appropriate investments for the pension fund. benchmarks and to maximize return and minimize risk.

74 Information available A future is a standardized, transferable, exchange-traded contract that requires delivery of a commodity, bond, Manulife currently offers the Guaranteed Interest Accounts currency or stock index at a specified price on a specified and market-based investment funds described in this future date. report to help achieve the specific objectives of plan sponsors. Plan sponsors may use the information provided An option is the right, but not obligation, to buy (a call in this Group Investment Report to establish a customized option) or sell (a put option) a specific amount of a given statement of investment policies, procedures and goals, stock, bond, currency, index or debt at a specified price based on their plan’s specific investment strategies. during a specified period of time.

General information regarding the market-based funds for The funds may, from time to time, invest in or use a pension plan’s statement of investment policies, derivative instruments consistent with their investment procedures and goals is provided below. Information objectives to the extent, and for the purposes, permitted specific to each fund is found on the fund description by Canadian securities regulators. pages in this report. The Manulife market-based funds do not invest directly in derivatives. However, except where otherwise specified, Market-based funds the underlying fund may invest in derivatives for hedging All funds are established and maintained under the or achieving the duration target. In particular, the use of authority of the Insurance Companies Act. The funds may derivative instruments is prohibited in the acquisition of invest in underlying mutual funds or other segregated investment exposures not otherwise permitted in the funds in accordance with applicable guidelines established underlying fund’s investment objectives and description. by Canadian securities regulators. Voting rights We intend to maintain a reasonable portfolio diversification. We do not intend to invest in securities for The fund manager will exercise any voting rights on the the purpose of exercising control or management. No shares in the best interests of the investment objectives of fund may purchase more than 10% of the common stock the fund. of any one corporation unless the investment is made through a mutual or pooled fund that complies with Valuation of investments not applicable investment regulations. regularly traded

Limitation on loans Securities and other investments will be valued using the best available quotation in Manulife Financial’s estimation. There will be no plan loans from the funds. Conflict of interest Limitation on share ownership No employee of Manulife or any fund manager shall act No single security will represent more than 10% of the book on investment knowledge or information of the fund to value of any fund, with the exception of the index funds. his or her direct or indirect benefit, unless the knowledge or information has been generally disclosed to the public Derivatives and the employee satisfies all the requirements of Manulife’s Code of Business Conduct and Conflict of A derivative is a financial instrument whose characteristics Interest Statement. and value depend on the value of such underlying instruments or assets as stocks, bonds or cash. Two examples are futures and options.

75 A secure website designed to help you.

At www.manulife.ca/GRO, you can: • find your plan level Investment Management Fees on-line, • get a duplicate RRSP tax receipt, • check account balances, • view personal rates of return, • receive detailed investment information on the funds offered, • see current unit values and Guaranteed Interest Accounts (GIA) rates, • view your transaction history, and • much more.

You need your customer number and your personal identification number (PIN) to access this service. If you need a PIN, or have forgotten it, call toll-free 1-888-727-7766 and press '0' to speak with a Customer Service Representative.

Group retirement and savings products and services are offered through Manulife Financial (The Manufacturers Life Insurance Company). Available 24 hours a day, Manulife Financial is a leading Canadian-based financial services group serving millions of customers in 19 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and 7 days a week primarily through John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of at www.manulife.ca/GRO. employees, agents and distribution partners. Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘0945’ on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com. Manulife Financial and the block design are registered service marks and trademarks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Financial Corporation.

GP0083E (12/2005)