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2007 News Releases

For Immediate Release

October 8, 2007

Study Demonstrates Value of John Hancock Lifestyle Portfolios for 401(k) Plan Participants

  • Participants who invested in a single John Hancock lifestyle fund had ending balances 11% higher than the non-Lifestyle invested participants over a ten-year period

  • 84.2 % of non-Lifestyle participants would have fared better in a John Hancock Lifestyle Portfolio corresponding to their risk tolerance over the ten-year period

Boston– For the fifth year in a row, a study1 demonstrates the value of John Hancock asset allocation Portfolios. Participants in John Hancock-provided 401(k) plans who invested only in a single John Hancock target-risk Lifestyle Portfolio from 1997 to 2006 fared better, on average, than John Hancock plan participants who chose their own asset allocations, according to the study conducted by Burgess + Associates for John Hancock USA. Participants who invested in a single Lifestyle fund also fared better on average than those who combined Lifecycle investments with other funds.

The study now has ten-year results in addition to the five-year results available in previous studies. For the ten years from 1997 to 2006 the survey showed that 84.2% of non-Lifestyle participants would have fared better had they invested in a single Lifestyle Portfolio that corresponded with their risk score.2 (In this study, non-Lifestyle Participants did not invest in any Lifestyle Portfolio.)

“We have the evidence once more that our asset allocation portfolios produced, for the majority of study participants, better returns than participants achieved when they selected their own investments,” explained Ed Eng, Senior Vice President, Product Development. “We were one of the first providers to offer this sort of asset allocation fund to 401(k) participants and our ten-year numbers demonstrate the benefits,” said Bob Boyda, Senior Vice President of John Hancock Investment Management Services, which oversees investment activities in the Lifestyle Portfolios. “The Burgess study showed that John Hancock Lifestyle participants had, as a group, an ending balance that was 11% higher than the non-Lifestyle invested participants,” said Boyda.

According to the Burgess study (assumptions on following page):
Five-year

  • 80.9% of non-Lifestyle participants would have accumulated a higher ending balance if they had invested in a single Lifestyle Portfolio that corresponded to their risk score. On average, their average annual returns would have been 1.9% higher.
  • Based on their beginning account balances, the average annual return earned by participants who had chosen to allocate all of their contributions to a single Lifestyle Portfolio was 9.5% compared to the non-Lifestyle Participants who earned 7.6%.

Ten-year

  • 84.2% of non-Lifestyle participants would have accumulated a higher ending balance if they had invested in a single Lifestyle Portfolio that corresponded to their risk score. On average, their average annual returns would have been 1.9% higher.
  • Based on their beginning account balances, the average annual return earned by participants who had chosen to allocate all of their contributions to a single Lifestyle Portfolio was 7.2% versus 5.3% for non-Lifestyle participants.

Participant Account Returns January 1, 1997-December 31, 2006
 

This chart does not reflect the actual investment performance of the underlying Lifestyle Portfolio, but is the average internal return (dollar weighted rate of return) for a group of participants based on beginning balance, monthly net cash flows and ending balance for all participants within a risk category. All returns are annualized. Past performance is no guarantee of future results. There is no guarantee that any investment strategy will achieve its objective. Current performance may be lower or higher than the performance data quoted. Investment returns and the value of a participant’s account will fluctuate and may be worth more or less than the original cost.

Outcomes of Participant Investment Strategies 1997-2006 - Assumptions: The Burgess study examined the performance of portfolios of 200, 467 retirement plan participants from 2002-2006 for the 5 year study and 14,487 retirement plan participants from 1997-2006 for the 10 year study contributing to their employer’s defined contribution plans through an ARA group annuity contract issued by John Hancock USA. The Lifestyle group represents those participants that invested only in a single Lifestyle Portfolio throughout the period. The Non-Lifestyle group represents those participants did not invest in any Lifestyle Portfolios throughout the period studied. These two groups were segmented based on their age or the level of investment risk inherent in the allocation strategies they selected. All participants selected met all of the following criteria: had an ending balance that was greater than zero; did not have a negative cash flow; did not maintain a loan. The average rates of return referred to in the study are the internal rates of return earned on the group’s aggregated stream of cash flows, and does not necessarily represent the returns of any individual participant’s actual investment results.

A Lifestyle Portfolio ("Fund") is a "fund of funds" which invests in a number of underlying funds. The Fund's ability to achieve its investment objective will depend largely on the ability of the subadviser to select the appropriate mix of underlying funds and on the underlying funds’ ability to meet their investment objectives. There can be no assurance that either a Fund or the underlying funds will achieve their investment objectives. Diversification does not ensure against loss. Past performance is no guarantee of future results. A Fund might not meet its objective.

4 For the 10 year study (11% higher or $9,557 ending balance): Difference between hypothetical average ending balance and actual average ending balance for Non-Lifestyle Participants. The average beginning balance was $18,053 and the average monthly contribution was $363.

5 For the 5 year study (6% higher or $3,157 ending balance): Difference between hypothetical average ending balance and actual average ending balance for Non-Lifestyle Participants. The average beginning balance was $17,463 and the average monthly contribution was $362.

Current performance may be lower or higher than the performance data quoted. Investment returns and the value of a participant’s account will fluctuate and may be worth more or less than the original cost. There is no guarantee that any investment strategy will achieve its objective

Please call 1-877-346-8378 to obtain John Hancock USA group annuity investment option Fund Sheets for its sub-accounts and prospectuses for the sub-accounts’ underlying mutual funds, which are available upon request. The prospectuses for the sub-accounts’ underlying mutual funds contain complete details on investment objectives, risks, fees, charges and expenses as well as other information about the underlying mutual funds which should be carefully considered.

About John Hancock and Lifestyle Portfolios
John Hancock is one of the nation’s leading providers of lifestyle portfolios, with $52.7 billion in Lifestyle Portfolio assets under management in its variable annuity, variable life, mutual funds and 401(k) products, as of June 30, 2007.

About John Hancock Retirement Plan Services
Among mutual fund, life insurance companies and banks, JHRPS is ranked as the #1 provider to 401(k)s based on number of 401(k) plans managed, according CFO Magazine. (CFO Magazine 401(k) Buyers Guide Study, published May 2007.)

About John Hancock and Manulife Financial
John Hancock is a unit of Manulife Financial Corporation (the Company), a leading Canadian-based financial services company serving millions of customers in 19 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and 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 employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn$410 billion (US$386 billion) as at June 30, 2007.

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.

The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers a broad range of financial products and services, including whole life, term life, variable life, and universal life insurance, as well as college savings products, fixed and variable annuities, long-term care insurance, mutual funds and various forms of business insurance.

Insurance products are issued by the following John Hancock insurance companies: John Hancock Life Insurance Company, John Hancock Variable Life Insurance Company*, John Hancock Life Insurance Company (U.S.A.)* and John Hancock Life Insurance Company of New York.

1The Burgess study was a commissioned study. This information is general in nature and is not intended to constitute legal or investment advice on any particular matter. Burgess + Associates and John USA are not affiliated.

2Risk scores are calculated for each participant based on the investment options (Funds) held in the participant’s account at the beginning of each study period. Each investment option was assigned a risk value based on investment categories created by John Hancock USA. John Hancock USA categorizes each of its Funds, including the Lifestyle Funds, into one of five risk categories, ranging from Conservative to Aggressive Growth. An ordinal risk value was assigned to each category of Funds and risk values were used to calculate a portfolio risk score for each participant.

*Not licensed in New York

PR-2007-83 09-07
SOURCE: John Hancock Retirement Plan Services

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