January 27, 2020

Addition of BlackRock Core Plus Bond Segregated Fund to our Core investment platform

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).

Sun Life regularly reviews the Core investment platform in response to Client interest and evolving fund offerings in the market.

We have added BlackRock Core Plus Bond Segregated Fund (“the Fund”) to our DC and DB Core investment platform. The addition is effective immediately.

Core Plus bond funds offer exposure to additional sources of added value relative to traditional (core) bond funds. That includes investments outside of Canada, high yield, private fixed income and commercial mortgages. The demand and assets in the Core Plus category continue to grow, as investors search for yield and diversification in the fixed income market.

About the BlackRock Core Plus Bond Fund

The Fund:

  • seeks to achieve an average annual return of 1.0% to 1.5% over the FTSE Canada Universe Bond Index (“the Index”).
  • invests in a passive portfolio that tracks the Index as the “Core” component.
  • invests up to 40% in the BlackRock Fixed Income Global Opportunities (“FIGO”) Fund as the “Plus” component.
  • offers diversified investments in over 40 countries, 30 currencies, and 1,000 securities.
  • employs leverage to invest in the FIGO Fund by arranging financing to buy FIGO’s units. It may use about 40% of the value of the “Core” component as a guarantee for the loan.

About FIGO fund

The FIGO fund seeks to maximize opportunities in fixed income markets, while producing returns that are expected to be less correlated to the traditional fixed income indices. BlackRock’s investment team leverages the breadth and scale of BlackRock’s global fixed income platform to find investment opportunities across any sector, credit quality (including non-investment grade), geographic region and duration in the fixed income universe. The team determines the allocations in each sector, quality, country and security based on their risk contribution to the overall fund. The Fund does not set any limit on those allocations and they may vary over time to take advantage of attractive opportunities.

How does this change impact you and your plan members?
This change does not impact you or your plan members. You don’t need to take any action. You may wish to consider whether the BlackRock Core Plus Bond Fund would be a suitable investment option in your lineup, particularly if you do not already offer a Core Plus bond fund today. On our DC core investment platform, we now offer six Core Plus bond funds (seven on the DB platform).

Please contact your Sun Life Group Retirement Services representative.