Sun Life Multi-Strategy Core Plus Segregated Fund Closure and Asset Transfer

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.

Fund Closure

SLGI Asset Management (SLGI) has decided to close the Sun Life Multi-Strategy Core Plus Segregated Fund (discontinued fund). As a result, effective immediately, Sun Life will no longer offer the discontinued fund as part of the Core investment platform. We’ll close the fund on February 18, 2026. We’ll continue to conduct governance activities on the fund and members’ contributions may continue until its closure.

Sun Life will replace the discontinued fund with the replacement fund in packaged products, such as Sun Advantage My Savings, Future Finder and Delegated DC.

Fund Changes and Asset Transfer

Sun Life has selected the Sun Life Multi-Strategy Bond Segregated Fund as the replacement fund. SLGI will be re-structuring the replacement fund by adding greater exposure to active management and to core plus fixed income. SLGI will complete this re-structuring by October 1, 2025. SLGI will also re-structure the discontinued fund to match the replacement fund by October 1, 2025.  You can read the communication describing these enhancements here.

On February 18, 2026, we’ll transfer any money in – and any future contributions directed to - the discontinued fund to the replacement fund as listed below.

The replacement fund will invest in similar fixed income asset classes as the discontinued fund. Both funds use the FTSE Canada Universe Bond Index as the benchmark. 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 lineup. In that case, we will automatically add the replacement fund to the lineup before the asset transfer occurs on February 18, 2026.

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

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 wish to select a different replacement fund and/or asset transfer date, you need to make this selection and inform Sun Life of your decision by November 14, 2025.

You can review alternative replacement options by looking at Morningstar fund information on the plan sponsor site or with the assistance of your consultant, advisor, or Sun Life representative.

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

Note that the option of choosing a different replacement fund is not available to Plan Sponsors in the packaged products including Sun Advantage My Savings, Future Finder and Delegated DC.  These products will automatically have the replacement fund added as their line-ups are chosen by Sun Life.

How will this affect your members?

On February 18, 2026, we’ll automatically transfer any money remaining in – and any future contributions directed to – the discontinued fund to the replacement fund. This includes plans for which Sun Life selects and monitors the investment line-up. When the change happens, your members will see a sale of the discontinued fund and the purchase of the replacement fund in their account.

 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 November 28, 2025. 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 or after the transfer automatically takes place on February 18, 2026.

Sun Life will provide the applicable tax slip(s) in early 2026. 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 the article here. Members can find their ACB on Plan Member Services website mysunlife.ca and selecting Check on Account > Balances.

About the Replacement Fund

The Sun Life Multi-Strategy Bond Segregated Fund is a core fixed income portfolio that seeks to earn a high rate of income by investing primarily in fixed-income securities of Canadian government and corporate issuers.

The replacement fund is set up as a multi-manager structure with an exposure to active and passive strategies within the Canadian fixed income market, as well as an allocation to non-domestic (primarily U.S. Investment grade) fixed income that will range from 14.5% to 19.5%. The fund will also have a small allocation of approximately 1% to Canadian private fixed income. Overall, the fund is expected to have an allocation of 79.5% to 84.5% to Core (investment grade Canadian fixed income) and 15.5% to 20.5% to Plus (foreign and private fixed income).

Active investment approaches include interest rate anticipation, yield curve positioning, duration management and credit analysis. SLGI may tactically shift between active and passive mandates to take advantage of potentially attractive opportunities and/or inefficiencies in the market. The replacement fund may from time to time invest up to 20% of the Fund’s portfolio in fixed-income securities of governments and companies outside of Canada. The fund will generally be 100% hedged to CAD but may have up to 10% foreign currency exposure.

In general, the fund’s duration is expected to fall within a range of 2 years of the duration of the FTSE Canada Universe Bond Index.

The strategic allocation changes to the discontinued fund as it changes to match the replacement fund are as follows: 

The removal of SL Wellington Opportunistic Fixed Income happened in late August, 2025, while the remaining changes are expected to occur around October 1, 2025.

Performance comparisons – 4 years ending June 30, 2025 (annualized):

Discontinued Fund: -0.06% vs. 0.14% benchmark

Replacement Fund: 0.34% vs 0.14% benchmark

You can obtain more information about the Sun Life Multi-Strategy Bond Segregated Fund by accessing the Morningstar section of the plan sponsor site.

GRS Investment Solutions team view

We are comfortable with the asset allocation changes to the discontinued (prior to closure) and replacement funds. We view the reduction in passive fixed income positively, as Canadian core and core plus fixed income have seen most managers outperform their benchmarks over time. We also view the increased ‘Plus’ sector allocations positively due to their potential for diversification benefits.

The two new mandates (US Core Fixed Income, SL Core Advantage Credit), both managed by SLC Management, currently have relatively small asset bases (slightly over $1.1B total). However, they have demonstrated solid value added relative to their benchmarks over the 5+ years since their inception. SLC Management has a strong firm culture and depth of experience in fixed income.  

Due to the significance of the changes to the Sun Life Multi-Strategy Bond Fund, we are placing it under Additional Monitoring (least severe category) on the GRS Investment Solutions Watch List. We will monitor the funds through the transition and merger and provide further updates as needed.

Questions?

Please contact your Sun Life Group Retirement Services representative*.

*In Quebec, registered as a Group annuity plans advisor.