Sun Life Multi-Strategy Canadian Equity Segregated Fund - Change in One Underlying 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 fund listed below, which is established as a segregated fund in accordance with the Insurance Companies Act (Canada).
Sun Life Global Investments (SLGI) recently made a change to an underlying component of the Sun Life Multi-Strategy Canadian Equity Fund (the “Fund”). SLGI manages the Fund as a multi-manager structure and over time, can make changes to the underlying funds and/or target allocations.
SLGI replaced the Beutel Goodman Canadian Equity Fund with PH&N Canadian Equity Value Fund in November 2024. SLGI made this change for two main reasons:
- Fit for mandate: When SLGI evaluates the funds in their multi-asset solutions, it is in the context of how each underlying component fits in the portfolio. SLGI sought to capitalize on a broader risk premium in Canadian value equity, recognizing there were investment options that would be a stronger complement within the overall portfolio.
- Consistency and sustainability of sources of value-added: As part of their continual manager monitoring, SLGI evaluates the depth, diversity and advancement of thought of the portfolio managers on each of the Fund’s components. In the case of Beutel Goodman, SLGI identified portfolio manager turnover and an unclear succession plan as a potential cause for concern.
Specifically, long-tenured Portfolio Manager Mark Thompson retired in 2020, followed by his successor, Pat Palozzi, in January 2024. While SLGI acknowledged that Beutel Goodman has taken several steps to plan for these retirements and has made additional hires in the past four years, SLGI remained concerned with the shorter tenures of Beutel Goodman’s current investment team and the possibility for further changes.
About the PH&N Canadian Value Fund
Similar to Beutel Goodman Canadian Equity, the PH&N fund is managed with a Value style approach that uses fundamental research to identify undervalued stocks. PH&N also include quantitative and technical factors in their investment process.
SLGI selected PH&N because of their deep research capabilities and strong track record.
They believe the PH&N fund will offer style diversification and the potential for enhanced risk-adjusted returns. Lastly, SLGI cited that the PH&N fund would be a stronger complement within the overall portfolio. The other underlying components within the Fund continue to be BlackRock Canadian Equity Index, CC&L Group Canadian Q Growth, and MFS Canadian Equity, as shown below.
The following is the prior and current structure of the Fund.
|
Before |
Current |
Fund Style |
|---|---|---|---|
Cash |
0.2% |
0.2% |
|
Sun Life Money Market |
2.3% |
2.0% |
|
Beutel Goodman Fundamental Canadian Equity |
22.2% |
0.0% |
Value |
PH&N Canadian Equity Value |
0.0% |
23.9% |
Value |
Sun Life BlackRock Canadian Equity Index |
19.5% |
21.6% |
Passive |
CC&L Canadian Q Growth |
29.6% |
25.8% |
Growth |
MFS Canadian Equity |
26.1% |
26.7% |
Core |
TOTAL |
100.0% |
100.0% |
|
Capital gains impact for Non-Registered plans
As a result of this change, plan members with assets in Non-Registered (taxable) plans may incur a capital gain in 2024.
Sun Life will provide the applicable tax slip(s) in February or March 2025. The tax slip(s) will reflect all capital gains from your members’ Non-Registered investments.
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.
We’ll send email communication to all members who currently hold this fund. Here is a copy for your reference.
Sun Life GRS Investment Solutions View
We met with SLGI to better understand their rationale for the underlying fund change, which SLGI also made within the Granite portfolios, as we communicated in December 2024. We are comfortable with the PH&N Canadian Equity Value as a new component of the overall Fund.
Both the Beutel Goodman Fundamental Canadian Equity Segregated Fund and the PH&N Canadian Value Segregated Fund continue to remain on the GRS Core investment platform and both funds are in good standing (i.e. not on our Watch List).
We will provide further updates as necessary.
There is no impact to fees charged to members due to these changes.
Do you have to take any action?
This update is for your information only. You don’t need to take any action.
Questions?
Please contact your Sun Life Group Retirement Services representative.