New Year, New funds! Ten funds add diversity to Core investment platform
January 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).
We're excited to start the new year with ten fund additions to our Core investment platform. These funds enhance the breadth and depth of investment options available to Defined Contribution plan sponsors and their plan members.
The following ten segregated funds are available effective immediately:
- Beutel Goodman Fundamental Canadian Equity
- Fiera Canadian Equity Small Cap Core*
- Fiera Global Equity
- Fiera International Equity
- Fiera U.S. Equity
- Franklin World Growth
- Hexavest Canadian Equity
- PH&N Canadian Value
- Schroder Diversified Growth
- TDAM Global Equity Shareholder Yield
* This fund was previously marketed on the core investment platform when it was managed by UBS (Canada). Upon Fiera's acquisition of UBS's Canadian business, this fund is now managed by Fiera and was re-added to the core investment platform marketed list, showing Fiera's small cap track record.
Key highlights of the new funds:
- a diversified growth strategy unique to Sun Life Financial designed for CAP sponsors looking to offer their members protection from current interest rate environment and volatile equity markets;
- a Canadian equity fund with a unique top-down investment approach;
- more Canadian equity value options;
- more foreign large cap options and,
- a core style fund with an emphasis on yield.
New asset category: Diversified Growth
The Schroder Diversified Growth fund is a new concept in Canada and the first fund of its kind on our Core investment platform. The Fund offers an alternative to traditional balanced funds and uses dynamic asset allocation to generate investment returns similar to markets, but at reduced levels of risk. The fund seeks long-term total return through a flexible asset allocation approach to produce a diversified portfolio, with an emphasis on reducing downside risk.
The Fund is managed by Schroders' Multi-Asset Investments and Portfolio Solutions team- a well-resourced global team of over 100 investment professionals. The Schroders' Diversified Growth strategy has more than 40 investment professionals committed to quantitative and qualitative risk premia research and eight risk premia groups - each headed by a senior multi-asset investment professional.
The investable universe of this fund includes: equities, investment grade credit, high-yield debt, convertible debt, emerging market debt, commodities, property, leveraged loans, governments bonds, infrastructure and cash.
About the new funds
These new funds increase the breadth of asset classes offered on the Core investment platform and increase the depth of options within existing asset classes offered on the core platform.
|Segregated Fund name||Asset class||Benchmark||Objective / Strategy|
|Beutel Goodman Fundamental||Canadian Equity Canadian Equity Value (Large Cap)||S&P/TSX Composite Index||To maximize portfolio returns through capital enhancement and investment income, through investments in (primarily large cap) Canadian equities.|
|Fiera Canadian Equity Small Cap Core||Specialty Canadian Equity||S&P/TSX Small Cap Index||To provide total long term returns mainly through capital appreciation. The Fund will invest in small cap Canadian issuers with a market capitalization which generally ranges from $150 million to $2 billion.|
|Fiera Global Equity||Global Equity GARP||MSCI World Index (Net)||To provide total long-term returns through capital preservation and distribution income. The Fund may invest up to 15% in Emerging Markets.|
|Fiera International Equity||International Equity GARP||MSCI EAFE Index (Net)||To provide total long-term returns through capital preservation and distribution income. The Fund may invest up to 20% in Emerging Markets.|
|Fiera U.S. Equity||U.S. Equity GARP||S&P 500 Index||Provide total long term returns, through both capital appreciation and distribution income. The portfolio will invest in mainly US common stocks and other equity securities.|
|Franklin World Growth||Global Equity Growth||MSCI World Index||Bottom-up, research driven concentrated portfolio with approximately 40 holdings.
Average allocation to emerging markets has been less than 10%.
|Hexavest Canadian Equity||Canadian Equity Top Down||S&P/TSX Composite Index||Capital appreciation and/or income generation. The Fund can invest up to 10% of assets outside of Canada.
Top-Down process is multi-layered and includes decision on sectors, industries, stocks, cash and, to a lesser extent, countries and currencies. Fundamental research is supported by proprietary quantitative models.
|PH&N Canadian Value||Canadian Equity Value||S&P/TSX Composite Index||
Uses scenario-based approach to Value investing.Fund seeks strong risk-adjusted returns which tend to be found at the intersection of:
|Schroder Diversified Growth||Diversified Growth||Return objective: To generate a return of Canadian Inflation (CPI) plus 4% per annum net of fees over a market cycle (typically five years)
Volatility Target: Targets two thirds of global equity volatility over a market cycle (typically five years)
|Seeks long-term total return through a flexible and dynamic asset allocation approach to produce a diversified portfolio, with an emphasis on reducing downside risk.|
|TDAM Global Equity Shareholder Yield||Global Equity Core||MSCI World Index (Net)||A globally diversified portfolio capable of delivering growth and income. The Fund focuses on companies of all market capitalizations located throughout the world that have a history of paying dividends, buying back shares, and/or reducing debt – key components of shareholder yield, and generating positive growth in operating cash flow.|
Closed to new plans: Beutel Goodman Canadian Equity Segregated Fund and MFS Global Equity Segregated Fund
Effective immediately, the Beutel Goodman Canadian Equity Segregated Fund and the MFS Global Equity Segregated Fund (formerly the MFS McLean Budden Global Equity Segregated Fund) will no longer be marketed as part of our Core investment platform. The respective fund managers have announced they have closed these funds to new clients in order to manage capacity in the underlying strategies. Governance for both of these funds will continue indefinitely and assets will not be mapped. Plans currently offering these two funds are not impacted by these closures and contributions from members in those plans can continue in the future.
Please note that the newly launched Beutel Goodman Fundamental Canadian Equity fund is the large-cap only version of the closing Beutel Goodman Canadian Equity fund, which could invest up to 20% of its assets in a small cap fund.
Meet the new managers
We are pleased to introduce two leading investment managers to our existing Core investment platform who have been carefully chosen for their operational transparency, financial stability and market demand.
Fiera Capital is a leading publicly traded, independent investment firm with over $76 billion in assets under management. With offices in major cities across Canada and in the U.S., the firm is one of only a handful of full service, multi-product investment firms in Canada, providing extensive expertise in Canadian active and structured fixed income, Canadian and foreign equity, asset allocation and non-traditional investment solutions through a broad range of strategies and services.
Schroder Investment Management North America Inc.
Schroders Investment Management North America is a subsidiary of Schroders plc.: a global asset management company. Founded in 1804, the company manages assets on behalf of institutional and retail investors, financial institutions and high net worth clients from around the world, with investments across a broad range of asset classes including: equities, fixed income, multi-asset and alternatives. Schroders employs over 3,500 people worldwide, and operates from 37 offices in 27 different countries across Europe, the Americas, Asia and the Middle East - close to the markets in which they invest and close to their clients.
Schroders has been managing assets for Canadian clients since 1994. They have developed under stable ownership for over 200 years, and long-term thinking governs their approach to investing, building client relationships and growing their business.
Investment Guidelines and Morningstar® investment reporting for each of the new funds will be available for on the plan sponsor site in late January 2014.
Please contact your Sun Life Financial Group Retirement Services representative.