Mortgages As at December 31, 2022, our mortgage portfolio of $54.6 billion represented 13% of invested assets (2021 – $52.0 billion and 12%, respectively). Geographically, 66% of the portfolio is invested in Canada (2021 – 66%) and 34% is invested in the U.S. (2021 – 34%). The overall portfolio is also diversified by geographic region, property type, and borrower. Of the total mortgage portfolio, 13% is insured (2021 – 14%), primarily by the Canada Mortgage and Housing Corporation (“CMHC”) – Canada’s AAA rated government-backed national housing agency, with 31% of residential mortgages insured (2021 – 35%) and 1% of commercial mortgages insured (2021 – 2%). As at December 31, 2022 2021 ($ billions) Carrying value % of total Carrying value % of total Commercial Retail $ 8.7 16 $ 8.8 17 Office 9.1 17 8.7 17 Multi-family residential 7.4 13 7.0 13 Industrial 4.7 9 3.6 7 Other commercial 2.7 5 3.0 6 32.6 60 31.1 60 Other mortgages Manulife Bank single-family residential 21.6 39 20.5 39 Agricultural 0.4 1 0.4 1 Total mortgages $ 54.6 100 $ 52.0 100 Our commercial mortgage loans are originated with a hold-for-investment philosophy. They have low loan-to-value ratios, high debt-service coverage ratios, and as at December 31, 2022 there were no loans in arrears. Geographically, of the total commercial mortgage loans, 44% are in Canada and 56% are in the U.S. (2021 – 44% and 56%, respectively). We are diversified by property type and largely avoid risky market segments such as hotels, construction loans, and second liens. (1) Non-CMHC Insured Commercial Mortgages 2022 2021 As at December 31, Canada U.S. Canada U.S. (2) Loan-to-Value ratio 60% 56% 61% 57% (2) Debt-Service Coverage ratio 1.57x 1.90x 1.56x 1.87x Average duration (years) 4.27 6.31 4.6 6.8 Average loan size ($ millions) $ 21.5 $ 21.1 $ 19.4 $ 19.0 (3) Loans in arrears 0.00% 0.00% 0.00% 0.00% (1) Excludes Manulife Bank commercial mortgage loans of $381 million (2021 – $393 million). (2) Loan-to-Value and Debt-Service Coverage are based on re-underwritten cash flows. (3) Arrears defined as over 90 days past due in Canada and over 60 days past due in the U.S. Public Equities As at December 31, 2022, public equity holdings of $23.5 billion represented 6% (2021 – $28.1 billion and 7%) of invested assets and, when excluding assets supporting participating policyholder and pass-through products, represented 1% (2021 – 1%) of invested assets. The portfolio is diversified by industry sector and issuer. Geographically, 29% (2021 – 28%) is held in Canada; 31% (2021 – 37%) is held in the U.S.; and the remaining 40% (2021 – 35%) is held in Asia, Europe, and other geographic areas. Public Equities – classified by type of product-line supported As at December 31, 2022 2021 ($ billions) Carrying value % of total Carrying value % of total Participating Policyholders $12.2 52 $14.7 52 Non-participating products and pass-through products 8.4 36 9.6 34 Corporate and Other segment 2.9 12 3.8 14 (1) Total public equities $ 23.5 100 $ 28.1 100 (1) Includes $1.6 billion of AFS equities and $1.3 billion of seed money investments in new segregated and mutual funds. Alternative Long-Duration Assets (“ALDA”) Our ALDA portfolio is comprised of a diverse range of asset classes with varying degrees of correlations. The portfolio typically consists of private assets representing investments in varied sectors of the economy which act as a natural hedge against future inflation and serve as an alternative source of asset supply to long-term corporate bonds. In addition to being a suitable match for our long-duration liabilities, these assets provide enhanced long-term yields and diversification relative to traditional fixed income markets. The vast majority of our ALDA are managed in-house. 40 | 2022AnnualReport | Management’sDiscussionandAnalysis