Jarislowsky Fraser U.S. Equity fund becomes available to non-registered assets
October 13, 2014
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).
Effective October 1, 2014, Jarislowsky Fraser Limited (JF) has revised its Investment Policies and Guidelines to allow the Jarislowsky Fraser U.S. Equity pooled fund (the Fund) to be eligible for both registered and non-registered assets. Prior to October 1, 2014, the fund only accepted registered assets.
How will this change impact you and your plan members?
Effective October 1, 2014, the Fund will be subject to U.S. withholding tax, which is a tax levied on income (interest and dividends) from securities owned by non-residents. Prior to October 2014 this was not the case as these funds were only open to registered assets.
Until September 30, 2014, the Fund received 100% of U.S. dividend income. As of October 1, 2014, the Fund will receive 85% of U.S. dividend income, as 15% will be automatically deducted to pay the U.S. withholding tax.
JF estimates that the version of the Fund which accepts non-registered assets would have generated a return that was 0.30% - 0.40% lower than the current version of the fund, which only accepted registered monies, over the last four years, on an annualized basis.
The name of the Fund will remain the same, but the Fund can now be offered in non-registered plans and Tax Free Savings Accounts (TFSAs), to facilitate consistent fund offerings between registered and non-registered plans.
The revised Investment Policies and Guidelines for all funds managed by Jarislowsky Fraser is available on the Plan Sponsor Services website at www.sunlife.ca/sponsor. The Investment Policies and Guidelines outline the investment objectives, strategies and guidelines. When logged into the website, under the Administration and reporting tab, select Group Retirement Services, then on the top navigation menu select Investments > Governance reports.
Please contact your Sun Life Group Retirement Services representative.