2016 Proxy Vote
Special meetings of securityholders of certain funds (the “Funds”) managed by Manulife Investments, a division of Manulife Asset Management Limited (the “Manager”) originally scheduled for 10:00 a.m. (Toronto time) on November 16, 2016, will be postponed to 10:00 a.m. (Toronto time) on November 25, 2016 at 200 Bloor Street East, South Tower, Syd Jackson Theatre, Toronto, Ontario. As a result of the postponement, Manulife Investments has extended the return deadline for proxies until 5:00 p.m. on November 24, 2016 to vote on the following proposed changes.
(i) Administration Fee Proposal
The Manager is seeking to adopt a simpler fee structure that will set a fixed rate for most of the Funds’ operating expenses.
Currently, each Fund is required to pay its own operating expenses as part of the overall Management Expense Ratio (the “MER”). These operating expenses generally vary from year to year, which in turn causes the MER to fluctuate.
As illustrated below, the MER represents the proportion of a Fund’s assets used to pay the Fund’s management fee and other expenses:
Effective on or after January 1, 2017, the Manager is proposing to introduce a fixed administration fee model (“FAF Model”). This model will replace most of the variable operating expenses charged to the Funds with a fixed administration fee.
The Manager will pay the operating expenses in return for each Fund's payment of a fixed administration fee. As a result, the Manager will bear the fluctuations in operating expenses. From time to time, additional expenses can arise that are not covered by the fixed administration fee. While these expenses cannot all be predicted, we currently expect that, in many cases, we will reimburse the Funds or absorb such expenses rather than applying them to the Funds.
The benefits for investors of a fixed administration fee:
• For all Participating Series (as defined in the Management Information Circular) of the Funds, the MER will be substantially equal to or less than its most recently reported MER
• Increased certainty and transparency of Fund MERs
• Protection against increase in MERs
• The Manager will assume the risk of future increases in Operating Expenses
(ii) Management Fee Proposal
Since, as part of the FAF Model, the fixed administration fee levels for certain series may be greater than or less than actual operating expenses, management fee changes are proposed to ensure that, generally, the future expected MER (under the FAF Model) for each series of the Funds is equal to or less than the most recently reported MER. The Manager proposes to increase the management fee for certain series of the Management Fee Proposal Funds (as defined in the Management Information Circular) – in all these cases, the proposed fixed administration fee level is lower than operating expenses incurred over the most recent financial period. Please note, even if the management fee is increased, the expected future MER (under the FAF Model) will still be substantially equal to or less than the most recently reported MER.
The implementation of the management fee changes is conditional upon the Manager implementing the FAF Model.
(iii) Amendment to Declaration of Trust of Certain Funds to Change the Auditor Appointment Process
The Manager is proposing to amend the Declaration of Trust of the Change of Auditor Funds (as defined in the Management Information Circular) in order to align it with current securities regulatory requirements. The proposed changes to Section 12.01 of the Declaration of Trust removes the requirement to obtain unitholder approval to change the auditor.
Your vote is encouraged regardless of the number of securities you own. It is important that your voice is heard, whether or not you plan to attend the meeting in person. Votes can be registered by mail, fax, telephone, online, or in person.
Details on the changes and voting procedures can be found in the Management Information Circular via the link below.
Your advisor is always available to you if you have any questions about what these changes mean or about Manulife Investments in general. If you received this information from your broker, custodian, nominee or other intermediary, please follow their instructions on how to register your vote.
Our Customer Service Centre is also available for you. You can reach us from Monday to Friday, 8 a.m. to 5:30 p.m. (ET) at 1-888-588-7999 for English, or 1-877-426-9991 for French. Or email us anytime at firstname.lastname@example.org. Alternatively, if you have any questions around voting procedures, you may contact Broadridge Financial Solutions, Inc. toll free at 1-855-887-2244.
Thank you for investing with Manulife! We value your business and look forward to working with you and your advisor to help meet your investment needs.
MANULIFE ASSET MANAGEMENT LIMITED,
as manager of the Manulife Investments mutual funds
President, Manulife Investments