Fiera Canadian Equity Small Cap Core Segregated Fund Closure and Asset Transfer

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 this communication in detail, along with the available replacement options.

Background

Fiera Capital Corporation (Fiera) announced on December 4, 2025 that they will close the Fiera Canadian Equity Small Cap Core underlying pooled fund on or before March 31, 2026. Fiera made the decision due to the fund’s underperformance in recent years and significant asset outflows. The lead Portfolio Manager of the fund, Michael Chan, has agreed to stay with the firm and manage the fund until March 31, 2026.

As a result of Fiera’s decision, Sun Life will close the Fiera Canadian Equity Small Cap Core Segregated Fund (the discontinued fund) on March 25, 2026. We’ll continue to conduct governance activities on the discontinued fund and members may continue to invest in and contribute to the discontinued fund until its closure.

On March 25, 2026, we’ll transfer any money in – and any future contributions directed to - the discontinued fund to the replacement fund as listed below.

Both the discontinued and replacement funds invest in Canadian small capitalization securities. The investment management fees for the replacement fund will be the same, or lower, than those for the discontinued fund.

Your plan(s) may not currently offer the replacement fund in the line-up. In that case, we’ll automatically add the replacement fund to your fund line-up on March 25, 2026.

The transfer will happen as described above, unless we receive different instructions from you in writing.

If you do not wish to move the money from the discontinued fund to the replacement fund above, you can 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 (see example below)

A different replacement option to consider

Within Canadian small capitalization equity funds, we also offer the Beutel Goodman Small Cap Segregated Fund (BG Small Cap Fund) on the core investment platform. You can learn more about this fund later on in this message.

If you wish to select the BG Small Cap Fund or a different replacement fund, you need to make this selection and inform Sun Life of your decision by February 16, 2026.

If you do nothing

You don’t have to take any action if you are satisfied with the default replacement fund.

Sun Life will move the money from the discontinued fund to the default replacement fund on March 25, 2026.

How will this affect your members?

On March 25, 2026, we’ll automatically transfer any money remaining in – and any future contributions directed to – the discontinued fund to the replacement fund. When the change happens, your members will see a sale of the discontinued fund and the purchase of the replacement fund in their account(s). 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 February 25, 2026. Here is a copy for your reference.

Plan members can also move their money to any other funds offered in the plan. They can do so at any time before the transfer automatically takes place on March 25, 2026.

Sun Life will provide the applicable tax slip(s) in early 2027. The tax slip(s) will reflect all income from your members’ Non-Registered investments.

For more information on how capital gains can occur in segregated funds within Non-Registered plans, please read article here. Members can find their ACB on Plan Member Services website mysunlife.ca and selecting Check on Account > Balances.

Default Replacement Fund

The CC&L Group Canadian Small Cap Fund aims to maximize long-term total return through investment in Canadian small capitalization stocks. The portfolio management team combines two approaches to manage the Fund: 10% top-down research and 90% fundamental, bottom-up security selection.  The Fund may invest up to 20% of the Fund in U.S. securities. The Fund holds 100 – 125 securities.

Gary Baker (co-Head of Fundamental Equity team) is the Portfolio Manager. The Fundamental Equity team consists of 15 investment professionals, including five analysts who support Baker on the strategy. 

Alternate Replacement Fund – BG Small Cap Fund

The BG Small Cap Fund seeks to maximize long-term capital appreciation and investment income through investment in Canadian small capitalization stocks. The portfolio management team uses fundamental, bottom-up security selection approach. The Fund holds 30-60 securities and is managed with a Value style.

Steve Arpin (Head of Canadian Equity team) is Lead Portfolio Manager and Bill Otton is co-Portfolio Manager of the Fund. The Canadian Equity team consists of seven investment professionals.

Please note that the fees for the BG Small Cap Fund are higher than the discontinued fund. We selected the CC&L Group Canadian Small Cap Fund as the default (automatic) replacement option because it has the same or lower fees than the discontinued fund.

Performance comparisons – 5 years ending September 30, 2025 (annualized):

Notes: The benchmark for Fiera Canadian Equity Small Cap Core and BG Small Cap is S&P/TSX Small Cap Index. The benchmark for CC&L Group Canadian Small Cap is 60% S&P/TSX Small Cap Index + 40% S&P/TSX Completion Index.

You can find more information about the CC&L Group Canadian Small Cap or the BG Small Cap Funds by accessing the Morningstar section of the plan sponsor web site.