July 03, 2018

Revised Segregated Fund Returns for the Sun Life Multi-Strategy Target Return Fund

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).

In April 2018, Sun Life Global Investments (Canada) Inc. (SLGI) discovered that incorrect fund returns were calculated and submitted to Morningstar® between January 9 and February 28, 2018 for the Sun Life Multi-Strategy Target Return Fund (the Fund).  

The miscalculation was the result of an administrative error by SLGI's custodian and was corrected on March 1, 2018. As of April 27, 2018, the Fund was made whole.

The Fund's Net Asset Value (NAV) was restated for applicable dates during the period between January 9 and February 28, 2018. On some dates during this time, the error exceeded the 50 bps threshold. This is the threshold at which the Investment Funds Institute of Canada (IFIC) guidelines indicate corrections of portfolio NAV errors are necessary. Month end Fund returns were also revised for this period.

For all transactions during the period where member accounts were negatively impacted, SLGI purchased additional units at the current NAV to compensate the account. For transactions where accounts benefitted, the accounts will keep the benefit.

SLGI takes these errors very seriously. A thorough investigation determined that the error was due to mispricing of a swap option by SLGI's custodian. Since then, a special external audit of SLGI's custodian was performed, and additional quality control protocols were implemented.

How does this impact you and your plan members?
Revised Fund returns are available on the Plan Sponsor website and on Morningstar. 

Please contact your Sun Life Financial Group Retirement Services representative.