Updates to TD Greystone Target Date Plus Fund Series

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. They are established as segregated funds under the Insurance Companies Act (Canada).

TD Asset Management Inc. (TDAM) has announced updates to the TD Greystone Target Date Plus Funds (Target Date Plus). TDAM revised investment policies to reflect changes to the mix of funds available to Target Date Plus, as well as some fund name changes. The firm has also provided an update on the alternatives asset mix within the funds as of September 30, 2024.

New Underlying Funds:

TDAM will add the following to the available investment options in Target Date Plus:

• TD Emerald Emerging Markets Pooled Fund Trust (replaces TD Greystone China Income and Growth Fund)
• TD Emerald Global Small Cap Pooled Fund Trust (replaces TD North American Small Cap Equity Fund)
• TD Greystone Global Real Estate Fund (Canada Feeder) L.P.
• TD Alternative Commodities Pool Fund (O Series)

When TDAM perform their annual review in early 2025, they will include these new underlying funds into the strategic glidepath weights of Target Date Plus.

Fund Name Changes:

TDAM renamed two underlying funds within Target Date Plus to better reflect their investment strategies:

• TD U.S. Quantitative Equity Fund changed to TD U.S. Disciplined Equity Alpha Fund™
• TD Global Equity Growth Fund changed to TD Global Capital Reinvestment Fund

The updated fund policies are now reflected in the Confidential Offering Circular. You can find the revised document on Sun Life’s Plan Sponsor site at http://www.sunlife.ca/sponsor. When logged into the site, under the Investments tab, select Investments >> Governance reports.

Update to Alternatives Exposure

We previously provided updates on the diluted alternatives exposure within the Target Date Plus funds in October 2023 and May 2024. In the last quarter of 2023, Target Date Plus had significant inflows, which temporarily reduced the allocation to the alternative assets. The alternatives assets consist of Canadian and global direct real estate, direct infrastructure, and commercial mortgages. TD Greystone allocated these inflows to public equities and fixed income, until the less liquid alternatives funds are able to invest them. 

TDAM provided an additional update in September 2024, following client inflows and capital calls¹ thus far in 2024. The following tables show the strategic allocations to alternatives and the updated actual allocations in Target Date Plus.

Source: TD Asset Management Inc. As of Sep 30, 2024.

As of September 30, 2024, the alternatives exposure across the funds ranged from 13.1% to 23.9%. This is largely in line with the estimates provided in our May update of between 12.6% to 22.8% across vintages. The allocations may continue to experience fluctuations, as assets grow from new client inflows and the time it takes to allocate the assets to alternatives. TDAM expects these fluctuations to moderate over time, as Target Date Plus’ assets under management grow, thereby lessening the impact of new inflows. For now, the 2055, 2060 and 2065 funds remain materially below their strategic weights in alternatives. Fund benchmarks will be updated in the first quarter of 2025 to reflect these changes.

Sun Life GRS Investment Solutions’ view

We are generally comfortable with the new funds available to Target Date Plus. The new Emerging Markets and Global Small Cap funds may provide greater diversification and a larger opportunity set in comparison to the funds they are replacing. Global Real Estate and Commodities increase the options within alternatives and may provide more return diversification.

We are pleased to see capital calls taking place and the alternatives allocations gradually move towards their targets. We will continue to monitor the exposures over time.

Questions?

Please contact your Sun Life Group Retirement Services representative.