BlackRock Balanced Index (Target Risk) Funds Benchmark Changes
Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the funds listed below, which are established as segregated funds in accordance with the Insurance Companies Act (Canada).
As of August 1, 2024, BlackRock Asset Management Canada Limited (BlackRock) changed the benchmarks for the three Balanced Index Funds (Target Risk Funds) available on Sun Life’s platform.
BlackRock reduced each Target Risk Fund’s exposure to Canadian real return bonds (RRBs) and re-allocated this to the FTSE Canada Universe Bond Index component. BlackRock made this change after the Government of Canada’s announcement to cease issuance of RRBs in November 2022. The purpose of this change is to provide improved alignment of funds with the current market environment and client interest.
These changes won’t affect any of the Target Risk Funds’ current investment objectives, risk profile or investment process, and are modest overall, representing a shift of 3% for each portfolio.
The benchmark changes will apply only on a go-forward basis. As is customary, the manager won’t change the benchmark retroactively.
We outline the changes below:
Index Component |
Current |
New |
|---|---|---|
FTSE Canada Universe Bond Index |
45% |
48% |
FTSE Canada Real Return Bond Index |
15% |
12% |
S&P/TSX Capped Composite Index (TR) |
10% |
10% |
FTSE EPRA/NAREIT Developed Index (TR, Net) |
5% |
5% |
MSCI ACWI ex-Canada Index (TR, Net) |
25% |
25% |
Total |
100% |
100% |
Index Component |
Current |
New |
|---|---|---|
FTSE Canada Universe Bond Index |
30% |
33% |
FTSE Canada Real Return Bond Index |
10% |
7% |
S&P/TSX Capped Composite Index (TR) |
20% |
20% |
FTSE EPRA/NAREIT Developed Index (TR, Net) |
5% |
5% |
MSCI ACWI ex-Canada Index (TR, Net) |
35% |
35% |
Total |
100% |
100% |
Index Component |
Current |
New |
|---|---|---|
FTSE Canada Universe Bond Index |
15% |
18% |
FTSE Canada Real Return Bond Index |
5% |
2% |
S&P/TSX Capped Composite Index (TR) |
30% |
30% |
FTSE EPRA/NAREIT Developed Index (TR, Net) |
5% |
5% |
MSCI ACWI ex-Canada Index (TR, Net) |
45% |
45% |
Total |
100% |
100% |
Note: TR refers to Total Return.
GRS Investment Solutions team view:
The GRS Investment Solutions Team doesn’t have concerns with this change. We will continue to monitor the fund and provide updates if necessary.
Questions?
Please contact your Sun Life Group Retirement Services representative.