Fidelity True North Segregated Fund closure and asset transfer to a similar Fidelity Canadian Equity Fund
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).
Action may be required
You don’t have to take action if you are comfortable with the replacement fund described below. If you wish to select a different replacement fund, please review the communication in detail.
Fidelity True North Segregated Fund is closing and replaced with Fidelity Canadian Institutional Segregated Fund
Effective immediately, Sun Life will no longer market the Fidelity True North Segregated Fund (“discontinued fund”) to plans who do not already offer it. We’ll close the discontinued fund next year, on March 18, 2026. We’ll continue to conduct governance activities on the fund until its closure.
Sun Life will replace this fund with the Fidelity Canadian Equity Institutional Segregated Fund (“replacement fund”). We announced the addition of the replacement fund on the core investment platform on May 15, 2025.
We’re closing the discontinued fund, because the replacement fund has a lower investment manager fee, while sharing the same investment style and lead portfolio manager.
On September 24, 2025, we’ll redirect any future contributions in Non-Registered plans to the replacement fund, along with Tax-Free Savings Accounts (TFSAs) plans. This is because the U.S. tax authority - Internal Revenue Service (IRS) – views TFSA as Non-Registered product because it’s not included in the U.S.-Canada tax treaty. As such, we are making the change to TFSA plans at the same time as true Non-Registered plans. For Registered plans, Sun Life will redirect future contributions to the replacement fund on March 18, 2026. On March 18, 2026, we’ll transfer the money held in the discontinued fund to the replacement fund as listed below.
Discontinued Fund |
Replacement Fund |
|---|---|
Fidelity True North Segregated Fund |
Fidelity Canadian Equity Institutional Segregated Fund |
The funds use the same investment style, namely Growth At A Reasonable Price (GARP). Maxime Lemieux is the lead Portfolio Manager of both funds. Lemieux has been at Fidelity since 1996 and has been managing both portfolios since April 2019. Both funds use the S&P/TSX Capped Composite Index as their benchmark.
Below is a comparison of the main characteristics of the two funds:
|
Discontinued fund |
Replacement fund |
|---|---|---|
Country/Region |
Primarily Canada, but can invest up to 30% in foreign holdings |
100% in Canada |
Sector constraints |
No constraints |
+/- 15% of benchmark |
Security constraints |
No constraints |
+/- 5% of benchmark |
Cash maximum allowed by investment policy |
20% |
Typically less than 5% |
Typical number of holdings |
80-100 |
50-100 |
Performance since inception of the replacement fund (April 4, 2019) to March 31, 2025 (annualized) |
12.3% | 12.1% |
Standard deviation (risk measure) since inception (April 4, 2019) to March 31, 2025 |
13.9% |
14.4% |
As shown above, while the discontinued fund’s investment policy allows wider use of cash and foreign equity, in practice, it hasn’t made full use of the allowable ranges. There is also notable stock overlap between the two funds – of the 71 stocks Fidelity had in the replacement fund as of December 31, 2024, 67 of those companies were also in the discontinued fund.
The investment management fee for the replacement fund will be lower than the fee for the discontinued fund.
Your plan(s) do not currently offer the replacement fund in the lineup. We’ll automatically add the replacement fund to the lineup on September 17, 2025 before the asset transfer occurs in March 2026.
In order to minimize the tax impact of the fund change, if your members have money in the discontinued fund in a Non-Registered (taxable) plan, we’ll be closing the fund to new money on September 24, 2025. We will also re-direct any future contributions from the discontinued fund to the replacement fund on that date.
The transfer will happen as described above, unless we receive different instructions from you in writing before July 18, 2025.
You may want to transfer the money in the discontinued fund into either:
- Another fund currently available in your line-up, or
- An alternative fund on the Core investment platform which better suits your plan’s needs.
If you would like to keep offering the discontinued fund, you can offer it as an Open Investment Selection (OIS) fund, subject to our operational requirements, such as a minimum investment of $2 million in the fund. Also, due to potential tax implications, Non-Registered plans will not be able to offer the discontinued fund after March 18, 2026. You will have to move these assets out of the discontinued fund to a different fund option (replacement fund or another fund you choose).
You don’t have to take any action if you are satisfied with the replacement fund.
How will this affect your members?
For Registered plans, on March 18, 2026, we’ll automatically transfer any money remaining in – and any future contributions directed to– the discontinued fund to the replacement fund.
For Non-Registered plans, we will close the discontinued fund to new money on September 24, 2025 and redirect future contributions to the replacement fund. We’ll subsequently automatically transfer any money remaining in the discontinued fund to the replacement fund on March 18, 2026.
When the transfers occur, your members will see a sale of the discontinued fund and the purchase of the replacement fund in their accounts. These transactions may result in a taxable capital gain or loss for your members invested in a Non-Registered plan.
We’ll send an email to members who currently hold the discontinued fund on or around August 11, 2025, and again prior to the transfer in early 2026. Here is a copy for your reference.
Your members will have the choice to transfer some or all of their Non-Registered money in the discontinued fund in 2025, before the automatic transfer occurs on March 18, 2026. This allows them to spread the capital gain or loss over a two-year period. They must report capital gains or losses in their tax return for the year(s) that withdrawals happen. Sun Life will provide the applicable tax slip(s) which will reflect all income in their Non-registered investments as well as any capital gains or losses incurred during the applicable year. Slips for 2025 tax year will be issued in early 2026, and slips for 2026 tax year will be issued in early 2027.
For more information on how capital gains can occur in segregated funds within Non-Registered plans, please read the article here. Members can find their ACB on Plan Member Services website mysunlife.ca and selecting Check on Account > Balances.
You can obtain more information about both funds by accessing the Morningstar section of the plan sponsor web site.
Questions?
Please contact your Sun Life Group Retirement Services representative.
*In Quebec, registered as a Group annuity plans advisor.