Sun Life Multi-Strategy Real Asset Segregated Fund Changes

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).

No action required

You don’t have to take any action as a result of the update below. Please review the details about the changes to the Sun Life Multi-Strategy Real Asset Segregated Fund (MS Real Asset).

What's new

Sun Life Global Investments (“SLGI”) recently announced significant changes to the underlying funds in the MS Real Asset fund. The changes include the addition of a new asset class and two replacements.  These changes will occur in October 2025 and are summarized below:

Asset class changes

SLGI has decided incorporate commodity exposure in the MS Real Asset Fund through a direct exposure to a broad commodity index via a commodities Exchange Traded Fund (ETF). This commodity exposure will consist of commodity futures and will replace the current natural resources allocation managed by KBI. SLGI believes that a more direct commodities exposure will better reflect the asset class’s positive correlation with inflation and diversification potential. Commodity prices can be volatile, but have a low correlation with the listed infrastructure and real estate components of the fund. This can reduce the overall volatility of the fund.

Mandate changes

With the change from natural resources to a direct commodity index, SLGI will remove the KBI Global Resources mandate in the MS Real Assets Fund. SLGI will re-allocate the 30% weighting in the KBI fund as follows: 10% to the new commodities ETF, 15% to increased listed real estate exposure, and 5% to increased listed infrastructure exposure.

SLGI has also decided to replace the Lazard Global Infrastructure fund with the Cohen & Steers Global Listed Infrastructure fund. SLGI opted for a less concentrated portfolio and lower tracking error relative to the S&P Global Infrastructure Index (C$).

Cohen & Steers is a U.S.-based asset manager that specializes in listed real asset investing. The firm was founded in 1986 as the first dedicated REIT investment management organization. The Global Listed Infrastructure strategy was incepted in 2004 and has nearly $10 billion in assets under management. It invests in a portfolio of 40 to 70 listed infrastructure companies that have attractive valuations across Energy, Transportation, Utilities, and Communications sectors. The strategy generally avoids more cyclical subsectors such as oil and gas production and construction. Over the past ten years, the strategy has generated a return of 8.74% (in USD) and has outperformed the S&P Global Infrastructure Index by 1.95%. ¹

Benchmark changes

In October 2025, SLGI will also adjust the MS Real Asset Fund benchmark allocations. The updated benchmark will reflect the changes described above and are changing as follows:

GRS Investment Solutions view

We met with SLGI in August 2025 to discuss the changes. We are generally comfortable with the new commodity futures allocation and associated fund re-weightings. SLGI believes we are entering a higher inflationary environment and that the new structure will both improve diversification and boost the overall inflation protection of the MS Real Asset Fund.  While the new Cohen & Steers Global Listed Infrastructure strategy is not available on our GRS platform or subject to our governance activities, we take confidence from the firm’s long track record in listed real assets.

Due to the significance of the changes, we have placed the MS Real Assets Fund on Additional Monitoring, the least severe category of the GRS Investment Solutions Watch List.  We will continue to monitor the transition in late 2025 and provide updates as necessary.