Call to Action for plan sponsors to review the CI Portfolio Series Target Risk funds
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. They are established as segregated funds under the Insurance Companies Act (Canada).
The CI Portfolio Series Target Risk Segregated funds (CI Portfolio Series) designated as Suggested For Removal on Sun Life’s Watch List.
CI Portfolio Series have been on the GRS Investment Solutions Watch List since 2020, either as Additional Monitoring or on Watch. The Watch List contains three distinct categories, from highest to lowest severity: i) Suggested For Removal ii) On Watch iii) Additional Monitoring. Following further changes, the GRS Investment Solutions team is designating the CI Portfolio Series as Suggested For Removal on our Watch List. We recommend that plan sponsors offering the CI Portfolio Series in their line-up consider replacing it with another target risk series or a target date series.
Background
CI Global Asset Management (CI GAM) has experienced a cascading series of changes over the last four years, largely stemming from the firm’s decision to eliminate CI Investments’ in-house brands and integrate them into a single new brand, CI Global Asset Management (CI GAM). The CI GAM integration has resulted in significant turnover in various investment teams as well as changes to products and strategies. These have impacted a significant proportion of the underlying funds within CI Portfolio Series. As a result of these changes we have put CI Portfolio Series on the Watch List since 2020.
CI Portfolio Series Asset Mix Changes
We recently communicated significant changes to the CI Portfolio Series Maximum Growth fund within CI Portfolio Series and our related concerns.
CI GAM subsequently informed us that they had made changes to the neutral asset mixes and benchmarks of all the funds within CI Portfolio Series. Each fund, except Maximum Growth, has an increased allocation to Canadian fixed income of 5% and a decrease to equities of 5%. Each fund except CI Portfolio Series Income, has a decrease in Canadian equities, and an increase in global equities. The decrease in Canadian equities and increase in global equities was most extensive for funds with higher allocations to equities. CI indicated that the changes were designed to better align the funds with the Canadian Investment Funds Standards Committee (CIFSC) fund category definitions. CI also believes that believe that the increase in Global equity exposure will benefit investors by expand each fund’s universe of eligible opportunities, leading to further diversification and potentially reduced portfolio volatility.
These changes took effect on November 30, 2024, but CI GAM only informed Sun Life of them in January 2025. The fund changes resulted in trading activity in the underlying funds that may result in taxable realized capital gains for plan members in non-registered plans. Sun Life will send plan members a communication describing these changes in May 2025. You can see this communication here.
Below are the latest changes, listed by fund:
CI Portfolio Series Income
Old: 70% Canadian fixed income (FTSE Canada Universe Bond Index); 15% Canadian equities (S&P/TSX Composite Index); 15% Global equities (MSCI World Index).
New: 75% Canadian fixed income (FTSE Canada Universe Bond Index); 12.5% Canadian equities (S&P/TSX Composite Index); 12.5% Global equities (MSCI World Index).
CI Portfolio Series Conservative
Old: 60% Canadian fixed income (FTSE Canada Universe Bond Index); 20% Canadian equities (S&P/TSX Composite Index); 20% Global equities (MSCI World Index).
New: 65% Canadian fixed income (FTSE Canada Universe BondI Index); 14% Canadian equities (S&P/TSX Composite Index); 21% Global equities (MSCI World Index).
CI Portfolio Series Conservative Balanced
Old: 50% Canadian fixed income (FTSE Canada Universe Bond Index); 25% Canadian equities (S&P/TSX Composite Index); 25% Global equities (MSCI World Index).
New: 55% Canadian fixed income (FTSE Canada Universe Bond Index); 13.5% Canadian equities (S&P/TSX Composite Index); 31.5% Global equities (MSCI World Index).
CI Portfolio Series Balanced
Old: 40% Canadian fixed income (FTSE Canada Universe Bond Index); 30% Canadian equities (S&P/TSX Composite Index); 30% Global equities (MSCI World Index).
New: 45% Canadian fixed income (FTSE Canada Universe Bond Index); 14% Canadian equities (S&P/TSX Composite Index); 41% Global equities (MSCI World Index).
CI Portfolio Series Balanced Growth
Old: 30% Canadian fixed income (FTSE Canada Universe Bond Index); 35% Canadian equities (S&P/TSX Composite Index); 35% Global equities (MSCI World Index).
New: 35% Canadian fixed income (FTSE Canada Universe Bond Index); 13% Canadian equities (S&P/TSX Composite Index); 52% Global equities (MSCI World Index).
CI Portfolio Series Growth
Old: 20% Canadian fixed income (FTSE Canada Universe Bond Index); 40% Canadian equities (S&P/TSX Composite Index); 40% Global equities (MSCI World Index).
New: 25% Canadian fixed income (FTSE Canada Universe Bond Index); 13% Canadian equities (S&P/TSX Composite Index); 62% Global equities (MSCI World Index).
CI Portfolio Series Maximum Growth
Old: 50% Canadian equities (S&P/TSX Composite Index); 50% Global equities (MSCI World Index).
New: 100% Global equities (MSCI World Index).
CI Financial purchased by Mubadala Capital
In late 2024, CI Financial (CI) announced that it has entered into a definitive agreement with Mubadala Capital, the alternative asset management arm of Mubadala Investment Company, to take the company private. Mubadala Capital is a wholly owned subsidiary of Mubadala Investment Company, a sovereign fund headquartered in Abu Dhabi (United Arab Emirates). The sale was subsequently approved by shareholders in February 2025.
CI sees this transaction as an opportunity to secure long-term stability and capitalize on additional growth opportunities. CI also believes that this deal will support its expansion in the U.S., where it operates as Corient and will continue to operate independently under the Corient name. CI believes that as a private firm it can make better long-term business decisions without the distraction of reporting quarterly earnings to shareholders.
CI will remain headquartered in Canada, with its existing operations, leadership and structure staying in place. This includes maintaining CI’s technology and data protection practices in Canada for Canadian operations.
Sun Life GRS Investment Solutions’ view
We are generally comfortable with the changes to the neutral asset mix and related benchmarks for the CI Portfolio Series funds. The decrease in equities is modest and the increase in global equity at the expense of Canadian equity mirrors changes that other multi-asset class funds have made in recent years. However, we continue to be concerned with the changes to Maximum Growth, due to its concentrated focus in certain sectors and countries. Maximum Growth’s 100% allocation to equities is also unique among target risk funds on the Sun Life core platform, as target risk funds don’t normally have an equity fund as part of the series.
We met with CI in early 2025 to discuss the initial outlook from the change in ownership. At this time, there is no indication of immediate changes to portfolio management, Canadian operations and existing policies and practices. However, the sale significantly increases the potential for more change and disruption at CI GAM. There may be personnel turnover and re-organizations and product changes that flow from this change of ownership.
Sun Life Investment Solutions is targeting to end governance activities on CI Portfolio Series on December 31, 2026.
Sun Life GRS will continue to monitor CI as it transitions to ownership by Mubadala Capital and we will continue to perform governance on CI Portfolio Series funds until December 31, 2026. We recommend reviewing CI Portfolio Series within your line-up. You can contact an Investment Solutions Executive (ISE) and/or work in partnership with your group advisor to discuss your options.
Questions?
Please contact your Sun Life Group Retirement Services representative.