Revised Statement of Investment Policies and Guidelines for Beutel Goodman Small Cap and Canadian Equity Funds

October 20, 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 August 7, 2014, Beutel Goodman & Company Ltd. (Beutel Goodman) revised their Statement of Investment Policies and Guidelines (SIP&G) for the following funds:

  • Beutel Goodman Small Cap Segregated Fund,
  • Beutel Goodman Fundamental Canadian Equity Segregated Fund, and
  • Beutel Goodman Canadian Equity Segregated Fund.

What's changed?

Beutel Goodman Small Cap
A change was made to the Diversification & Quality Standards section of the SIP&G. Following a proxy vote, Beutel Goodman approved a change to the small cap definition from "an adjusted market float of up to $1.5 billion at the time of purchase" to more general wording that states the firm will invest in securities of "smaller capitalization issuers". The firm will look to the size of the small cap index to determine what qualifies for investment going forward, rather than stating an actual figure that does not change with the nature of the index.  

The aforementioned update was also made in the SIP&G of the Beutel Goodman Canadian Equity Fund, which invests a portion of its assets in the Beutel Goodman Small Cap Fund.

Beutel Goodman Fundamental Canadian Equity
Similar to the above, a change was made to the Diversification & Quality Standards section of the SIP&G to remove the following language: "the market capitalization of the issuing company must be more than $1.5 billion at the time of purchase".

Rationale
Beutel Goodman has seen the definition of small cap significantly increase since the $1.5 billion maximum was created in 1999. The removal of the $1.5 billion market capitalization reference allows Beutel Goodman to expand their opportunity set along the small capitalization spectrum. While the number of stocks that fall under the new definition and still meet their strict research criteria is small, it gives the firm more flexibility as opportunities arise.

Beutel Goodman’s SIP&G details the fund objectives, strategies and guidelines for the investment funds managed by Beutel Goodman. A copy of the SIP&G is available on the Sun Life Financial Plan Sponsor Services website.

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