For more information on how to use High Y ield Bond Funds in your portfolio, contact your advisor John Sabourin, BA, B.Comm, FLMI, CFP T elephone: (519) 675-1177 1-888-327-5777 Facsimile: (519) 675-1331 www.selectpath.ca [email protected] What Are High Yield Bonds? Who Issues Them? What Are Their Character istics? Debt securities of companies with low credit quality, as designated by independent bond-rating agencies. Ratings are based on the likeli hood that a corporate issuer may default. Issuers typically have higher outs tandi ng debt and less ca show t o cov er t hei r inte rest obl igations. Mature companies that o perate in capital-intensive industries, such as energy , telecommunications and utilities. Companies in the early stages of development that lack the operating history or balance sheet strength to merit having their debt labelled as investment grade quality. “Fallen angels” - Companies whose debt once carried an investment-grade rating, but have been downgraded due to doub ts about the companies’ ability to pay interest or principal as promised Yi elds are generally higher than those of investment-grade bonds, to compensate for higher risk. Prices can be volatile over the short term, due to the risk factor, making this investment more appropriate for investors with a long-term horizon. Hig hyiel dbo nds of fer ta x-e fc ienti ncomet hroughac ombina tionofi nte res ti ncomean dca pit al appreciation, ideal for investors looking for a steady income stream. They share traits of both stocks and investment-grade bonds: They’re like bonds because... They provide a xed income The bulk of their return comes from coupon payments They are less volale than stocks and provide downside protecon Absent of default, high-yield bonds can be expected to be redeemed at par value at maturity, while stock prices uctuate connuou sly They’re like stocks because... They tend to be less sensive to interest-rate movements than investment- grade bonds They are aected by the factors that in- uence stock prices, such as the issuer’s business prospects, cash ow and debt level, as well as industry fundamentals and the overall health of the economy Commissions, trailing commission s, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The opinions exp ressed are those of the author and may no t necessarily reflect thos e of Manulife Securities Inv est- ment Services Inc.

Pathways - High Yield Bond Fund

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For more information on how to use High Yield Bond Funds in your portfolio, contact your advisor

John Sabourin, BA, B.Comm, FLMI, CFP

Telephone: (519) 675-1177 1-888-327-5777

Facsimile: (519) 675-1331

www.selectpath.ca

[email protected]

What Are High Yield Bonds?

Who Issues Them?

What Are Their Characteristics?

Debt securities of companies with low credit quality, as designated by independent bond-rating agencies.

Ratings are based on the likelihood that a corporate issuer may default. Issuers typically have higher

outstandingdebtandlesscashowtocovertheirinterestobligations.

Mature companies that operate in capital-intensive industries, such as energy, telecommunications

and utilities.

Companies in the early stages of development that lack the operating history or balance sheet strengthto merit having their debt labelled as investment grade quality.

“Fallen angels” - Companies whose debt once carried an investment-grade rating, but have been

downgraded due to doubts about the companies’ ability to pay interest or principal as promised

Yields are generally higher than those of investment-grade bonds, to compensate for higher risk.

Prices can be volatile over the short term, due to the risk factor, making this investment more

appropriate for investors with a long-term horizon.

Highyieldbondsoffertax-efcientincomethroughacombinationofinterestincomeandcapital

appreciation, ideal for investors looking for a steady income stream.

They share traits of both stocks and investment-grade bonds:

They’re like bonds because...

They provide a xed income

The bulk of their return comes fromcoupon payments

They are less volale than stocksand provide downside protecon

Absent of default, high-yield bondscan be expected to be redeemed atpar value at maturity, while stock

prices uctuate connuously

They’re like stocks because...

They tend to be less sensive to inter-est-rate movements than investment-grade bonds

They are aected by the factors that in-uence stock prices, such as the issuer’sbusiness prospects, cash ow and debtlevel, as well as industry fundamentalsand the overall health of the economy

Commissions, trailing commissions, management fees and expenses all maybe associated with mutual fund investments. Please read the prospectus beforeinvesting. Mutual funds are not guaranteed, their values change frequently andpast performance may not be repeated. The opinions expressed are those of the author and may not necessarily reflect those of Manulife Securities Invest-ment Services Inc.