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).

CI Investments Inc. (CI) has replaced one of the sub-advisors of the CI Canadian Small/Mid Cap Fund (the Fund). Sentry Investment Management (Sentry) replaced Manulife Investment Management (MIM), effective on or about June 15, 2020.

The Fund is a multi-manager fund with three underlying managers, each with distinctive investment style. Picton Mahoney Asset Management (Picton Mahoney) and QV Investors Inc. (QV Investors) continue to manage their portions of the Fund. There is no change to the allocations among the underlying managers:

  • 40% Picton Mahoney;
  • 30% QV Investors; and
  • 30% Sentry.

CI’s Multi-Asset Management team continues to oversee the Fund and decides the allocations among the three managers. There is no change to the Fund’s investment objective.

Background and rationale for change

The Fund allows up to 49% exposure to foreign securities. CI believes there are more attractive opportunities in the small/mid cap equity markets outside of Canada, particularly in the U.S. Picton Mahoney, QV Investors and MIM offer foreign exposure in their respective portions of the Fund. The combined allocations in foreign securities, however, was still below the 49% threshold (28% as of March 31, 2020). As such, CI wants to increase the allocation in U.S. securities to take advantage of these opportunities.

CI’s review of the existing managers concluded that MIM has limited competency in the U.S. small and mid cap market. After the review, CI decided to terminate MIM and replace it with Sentry.

Aubrey Hearn (Head of Equities, Senior Portfolio Manager) and Jack Hall are the lead portfolio managers of Sentry’s portion. This team specializes in North American/U.S. equities. Hearn currently manages various North American/U.S. equity strategies at Sentry.

CI confirmed that there were no performance issues/concerns with MIM. However, they believe Sentry will provide greater value add in the long-run.

The GRS Investment Solutions team reviewed this change and will monitor the transition in the coming months. From an investment style perspective, Sentry is similar to Manulife Investment Management.

Questions?

Please contact your Sun Life Group Retirement Services representative.