Jarislowsky Fraser - Revised Investment Policy Guidelines for the Balanced Funds
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 fund listed below, which is established as a segregated fund in accordance with the Insurance Companies Act (Canada).
Jarislowsky, Fraser Limited (JFL) communicated an update to its Investment Policy Guidelines for the funds listed below. All updates are effective January 1st, 2018.
Jarislowsky Fraser Balanced Segregated Fund
Jarislowsky Fraser Global Balanced Segregated Fund
The funds now both include an allocation to emerging market equities, and as a result, the benchmark weighting was revised effective January 1, 2018. The new benchmark allocation includes 2.5% to emerging market equities and reduces the allocation to cash by 1% and bonds by 1.5%. The full benchmark description changes can be seen below:
Jarislowsky Fraser Balanced Benchmark:
39% FTSE TMX Canada Universe, 30% S&P/TSX Composite, 12.5% S&P 500 (C$), 12.5% MSCI EAFE NET(C$), 6% FTSE TMX Canada 91-Day T-Bill
37.5% FTSE TMX Canada Universe, 30% S&P/TSX Composite, 12.5% S&P 500 (C$), 12.5% MSCI EAFE NET(C$), 2.5% MSCI Emerging Markets Net Index (C$), 5% FTSE TMX Canada 91-Day T-Bill
Jarislowsky Fraser Global Balanced Benchmark:
40% FTSE TMX Canada Universe, 22% S&P/TSX Composite, 16% S&P 500 (C$), 16% MSCI EAFE NET(C$), 6% FTSE TMX Canada 91-Day T-Bill
38.5% FTSE TMX Canada Universe, 22% S&P/TSX Composite, 16% S&P 500 (C$), 16% MSCI EAFE NET(C$), 2.5% MSCI Emerging Markets Net Index (C$), 5% FTSE TMX Canada 91-Day T-Bill
The emerging market asset class weighting is limited to a maximum of 5% in each of the funds. The investment objective of the funds above remains unchanged.
Given that the two funds have been gradually building a distinct allocation to emerging market equities over time, revising the benchmark to include the emerging market equities asset class strengthens the appropriateness of the benchmark. For this reason, we are comfortable with the changes.
A copy of the revised Investment Policy Guidelines is 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.
Please contact your Sun Life Financial Group Retirement Services representative.