Removal of JF Global Equity Segregated Fund from Core investment platform
March 2, 2015
Plan sponsors may wish to consider whether this investment update has any implications for the investment options available within their plan. 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).
Sun Life Financial is committed to continually monitoring the investment options available to our clients. Enhancing our Core investment platform by adding and removing funds is one of the ways that we deliver on this service commitment.
Effective immediately, Sun Life Financial Group Retirement Services will no longer market the JF Global Equity Segregated Fund (the Fund) as part of our Core investment platform. Additionally, we will close this fund on May 29, 2015. Governance activities will continue for this fund until June 30, 2015.
Action required by April 30, 2015
We ask that plan sponsors who currently offer the JF Global Equity Segregated Fund in their plan(s) must advise Sun Life Financial Group Retirement Services of a replacement fund to which to transfer the existing assets, no later than April 30, 2015. If clients do not give Sun Life Financial direction on a replacement fund by April 30, 2015, plan members' assets in this fund will automatically be transferred to the Sun Life MFS Global Value Segregated Fund on May 29, 2015.
How does this affect plan members?
When plan sponsors transfer the assets of the JF Global Equity Segregated Fund to the default fund or their choice of replacement fund, plan members with assets invested in a non-registered plan will experience a capital gain or capital loss, which would appear on their applicable year’s tax slip.
Rationale for removal of JF Global Equity Segregated Fund
Since the Fund was added to the Core investment platform in 2011 we’ve seen a lack of interest from existing and new plan sponsors to offer this fund to their plan members. Segregated funds with asset levels below $2 million can have significant rate of return variances; as of December 31, 2014, there was less than $162,000 invested in the Fund.
Background on Sun Life MFS Global Value Segregated Fund
The goal of the Sun Life MFS Global Value fund is to outperform the MSCI World GR CAD Index on a risk-adjusted basis and to seek capital appreciation by investing primarily in equity securities of issuers located anywhere in the world that are considered to be undervalued compared to their perceived worth. The tenets of MFS's investment philosophy are based upon the following beliefs:
- Earnings growth combined with a valuation discipline are the most important drivers of stock price performance.
- Quality is under-appreciated by the market.
Fund Performance - Sun Life MFS Global Value Core fund
|For Periods Ending December 31, 2014||Annual Returns||Annualized Returns|
|2010||2011||2012||2013||2014||2 years||3 years||4 years||5 years|
|Sun Life MFS Global Value Segregated Fund||4.14||3.72||13.76||39.51||15.15||26.75||22.26||17.34||14.57|
|Benchmark - MSCI World||6.48||-2.67||13.96||35.91||15.01||25.02||21.22||14.75||13.04|
Please contact your Sun Life Financial Group Retirement Services representative.