Revised SIP&G: Sun Life Financial Granite Series of Target Risk Segregated Funds - May 12, 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).

Further to the changes announced in January 2014, effective April 1, 2014, the Statement of Investment Policies and Goals (SIP&G) for Sun Life Financial’s Granite Series of Target Risk Segregated Funds (Granite Target Risk funds) has been updated.

Why the change?
The changes are a result of:

  • the annual portfolio optimization;
  • the addition of a new asset class to the strategic allocation (high-yield bonds and emerging market debt); and
  • the removal of Canadian short term bonds from all Granite Target Risk funds.

What's changed?
Changes have been made to the target equity and real estate/infrastructure allocations (including minimum/maximum ranges), as well as blended benchmark weights which reflect the new allocations. For the Conservative and Moderate Granite Target Risk funds only, the Neutral allocations to Equities/Fixed Income was changed to reduce the equity allocation by 3% and increase the Fixed Income allocation by 3%, as follows:

Funds asset allocation ranges effective April 1, 2014

 

Equity

Fixed Income

Min

Neutral

Max

Min

Neutral

Max

Conservative Fund 20% 27% 40% 60% 73% 80%
Moderate Fund 40% 47% 60% 40% 53% 60%
Balanced Fund 50% 60% 70% 30% 40% 50%
Growth Fund 60% 70% 80% 20% 30% 40%
Aggressive Fund 70% 80% 90% 10% 20% 30%


Funds asset allocation ranges prior to April 1, 2014

Funds asset allocation ranges

Equity

Fixed Income

Min

Neutral

Max

Min

Neutral

Max

Conservative Fund 20% 30% 40% 60% 70% 80%
Moderate Fund 40% 50% 60% 40% 50% 60%
Balanced Fund 50% 60% 70% 30% 40% 50%
Growth Fund 60% 70% 80% 20% 30% 40%
Aggressive Fund 70% 80% 90% 10% 20% 30%


Summary of other key changes to the allocation ranges:

Equity allocation limits effective April 1, 2014

 

Canadian equity (%)

US equity (%)

International equity (%)

EM equity*(%)

Min

Neutral

Max

Min

Neutral

Max

Min

Neutral

Max

Min

Neutral

Max

Conservative Fund 3.0 8.0 13.0 3.0 8.0 13.0 3.0 8.0 13.0 0 0 5.0
Moderate Fund

6.5

 

14.0 21.5 5.5 13.0 20.5 5.5 13.0 20.5 0 2.0 10.0
Balanced Fund

9.5

 

17.0 24.5 8.5 16.0 23.5 8.5 16.0 23.5 0 3.0 10.0
Growth Fund

11.5

 

19.0 26.5 11.0 18.5 26.0 11.0 18.5 26.0 0 4.0 15.0
Aggressive Fund

11.0

 

21.0 31.0 10.0 20.0 30.0 10.0 20.0 30.0 0 5.0 15.0


Equity allocation limits prior to April 1, 2014

 

Canadian equity (%)

US equity (%)

International equity (%)

EM equity*(%)

Min

Neutral

Max

Min

Neutral

Max

Min

Neutral

Max

Min

Neutral

Max

Conservative Fund 7.0 12.0 17.0 4.0 9.0 14.0 4.0 9.0 14.0 0 0 5.0
Moderate Fund 8.5 16.0 23.5 7.5 15.0 22.5 5.0 13.0 21.0 0 2.0 10.0
Balanced Fund 10.0 20.0 30.0 9.5 17.0 24.5 6.0 14.0 22.0 0 3.0 10.0
Growth Fund 14.0 24.0 34.0 10.0 19.0 28.0 7.0 15.0 23.0 0 4.0 15.0
Aggressive Fund 18.0 28.0 38.0 11.0 21.0 31.0 8.0 16.0 24.0 0 5.0 15.0

*Does not include the Emerging Markets equity portion within International equity allocation.
 

Real estate and infrastructure allocation limits effective April 1, 2014

 

Infrastructure

Real estate

Min

Neutral

Max

Min

Neutral

Max

Conservative Fund

0%

1.5%

10.0%

0%

1.5%

10.0%

Moderate Fund

0%

2.5%

10.0%

0%

2.5%

10.0%

Balanced Fund

0%

4.0%

10.0%

0%

4.0%

10.0%

Growth Fund

0%

5.0%

10.0%

0%

5.0%

10.0%

Aggressive Fund

0%

7.0%

10.0%

0%

7.0%

10.0%


Real estate and infrastructure allocation limits prior to April 1, 2014

 

Infrastructure

Real estate

Min

Neutral

Max

Min

Neutral

Max

Conservative Fund

0%

0%

10.0%

0%

0%

10.0%

Moderate Fund

0%

2.0%

10.0%

0%

2.0%

10.0%

Balanced Fund

0%

3.0%

10.0%

0%

3.0%

10.0%

Growth Fund

0%

4.0%

10.0%

0%

4.0%

10.0%

Aggressive Fund

0%

5.0%

10.0%

0%

5.0%

10.0%

 

Blended benchmarks effective April 1, 2014

 

 

Conservative Fund

 

Moderate
Fund

 

Balanced
Fund


Balanced Growth Fund

 

Growth
Fund

Cash DEX 91 Day T-Bill

10.0%

5.0%

2.5%

0.0%

0.0%

Canadian ST Bonds DEX ST

0.0%

0.0%

0.0%

0.0%

0.0%

Canadian Bonds DEX Universe

40.5%

29.0%

21.5%

17.5%

10.0%

Global Bonds JPM Global Govt C$

15.0%

12.0%

10.0%

7.0%

5.0%

Canadian Equities S&P/TSX Capped Composite

8.0%

14.0%

17.0%

19.0%

21.0%

US Equities S&P 500 C$

8.0%

13.0%

16.0%

18.5%

20.0%

Intl Equities MSCI EAFE C$

8.0%

13.0%

16.0%

18.5%

20.0%

EM Equities MSCI EM C$

0.0%

2.0%

3.0%

4.0%

5.0%

Infrastructure S&P Global Infrastructure C$

1.5%

2.5%

4.0%

5.0%

7.0%

Real Estate FTSE EPRA/NAREI T C$

1.5%

2.5%

4.0%

5.0%

7.0%

HY Bonds Barclay Global High Yield C$ hedged

3.8%

3.5%

3.0%

2.8%

2.5%

EM Debt Barclay EM USD Aggregate C$ hedged

3.8%

3.5%

3.0%

2.8%

2.5%

Total  

100%

100%

100%

100%

100%

 

Blended benchmarks prior to April 1, 2014

 

Conservative

Fund

Moderate

Fund

Balanced

Fund

Growth

Fund

Aggressive

Fund

Cash DEX 91Day T-Bill

10.0%

5.0%

2.5%

0.0%

0.0%

Canadian ST Bonds DEX ST

10.0%

5.0%

2.5%

0.0%

0.0%

Canadian Bonds DEX universe

40.0%

31.0%

27.0%

23.0%

14.0%

Global Bonds JPM Global Gov’t C$

10.0%

9.0%

8.0%

7.0%

6.0%

Canadian Equities S&P/TSX Capped Composite

12.0%

16.0%

20.0%

24.0%

28.0%

US Equities S&P 500 C$

9.0%

15.0%

17.0%

19.0%

21.0%

Int’l Equities MSCI EAFE C$

9.0%

13.0%

14.0%

15.0%

16.0%

EM Equities MSCI EM C$

0.0%

2.0%

3.0%

4.0%

5.0%

Infrastructure S&P Global Infrastructure C$

0.0%

2.0%

3.0%

4.0%

5.0%

Real Estate FTSE EPRA/NAREIT C$

0.0%

2.0%

3.0%

4.0%

5.0%

Total  

100%

100%

100%

100%

100%


A copy of the revised SIP&G will be available on Sun Life Financial's Plan Sponsor Services website at www.sunlife.ca/sponsor. 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.

How will this change impact you and your plan members?
There is no impact to you or your plan members as a result of these changes. The Granite Target Risk funds offer your plan members a selection of pre-built funds to maximize your members' returns for a given risk tolerance level. Guidelines are regularly reviewed by Sun Life Global Investments (SLGI) and may be changed as regulatory and/or market conditions dictate.

Questions?
Please contact your Sun Life Financial Group Retirement Services representative.