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).

Sun Life regularly reviews the core investment platform. We do this in response to Client interest and evolving fund offerings in the market.

Effective December 1, 2020, we will add the following funds to our DC and DB core investment platform:

  • PIMCO Canada Monthly Income Fund
  • Schroder Global Sustainable Growth Fund

About PIMCO Canada Monthly Income Segregated Fund (PIMCO Monthly Income)

PIMCO Monthly Income is a global fixed income fund that seeks to produce a consistent monthly income to meet an annual target. The annual target is not formally fixed and could change based on market conditions. The current annual target income is 4%.

The investment team leverage PIMCO’s resources to identify income-generating opportunities globally. The fund may invest across any sector, credit quality and geographic region. The fund consists of two segments:

  • Higher yielding assets that will benefit when economic growth is robust;
  • Higher quality assets that will benefit when economic growth is weak.

PIMCO Monthly Income’s benchmark is the Barclays U.S. Aggregate Bond Index (hedged to Canadian dollars). The fund’s investments are expected to deviate significantly from the benchmark and may include significant allocations to high yield and illiquid securities.

The addition represents Sun Life’s commitment to offer a diverse investment option for members in different age groups. The fund focuses on generating a stable income. That’s why it may be suitable for members who are close to retirement.

About Schroder Global Sustainable Growth Segregated Fund (Schroder Global Sustainable Growth)

The fund invests in companies that Schroders identifies as being responsible companies managed for the long term with consideration for stakeholder interests. Schroders believes that companies with these qualities have the ability to deliver consistent growth over time. Schroders also believes that the market is often short-term focused and persistently underestimates the long term growth of these quality businesses. Investing in these businesses could provide a rich source of value added for patient investors. The fund’s benchmark is MSCI All Country World Index.

Schroders’ Global Sustainable Investor Group (the Group) manage the fund. The Group consists of six investment professionals including Global Head of Sustainable Investment and Head of Engagement. The Group also gets support from the Sustainable Investment team of 22 professionals. The team is responsible for the integration of Environment, Social, Governance (ESG) into the investment process, data management, and reporting across the firm.

The Group uses proprietary tools (“Sustainability Quotient (SQ) framework”) for sustainability analysis, in addition to the investment analysis. They use the SQ framework to identify companies with responsible business practices and to assess their business model sustainability and growth prospects. The sustainability analysis consists of two components:

  • Analyze company practices through a stakeholder’s lens;
  • Measure a company’s impact on people and the planet.

Only companies that pass the sustainability analysis proceed to the investment analysis stage.

Additionally, the fund excludes companies in fossil fuel extraction/production, tobacco, alcohol, gambling, controversial weapons, high interest lending businesses etc.

The Group also conduct targeted engagement with companies to resolve issues and improve business practices in these areas:

  • Environment
  • Capital allocation and transparency
  • Treatment of employees, suppliers and customers
  • Business ethics and impact on society

The Schroder Global Sustainable Growth is the first fund on the core platform with a mandate to focus on alignment of stakeholder values and targeted engagements.

The addition of these funds is consistent with Sun Life’s sustainable investment strategy. The GRS Investment Solutions team consider both PIMCO and Schroders as ESG Leaders within our proprietary ESG Framework. They have strong ESG policies, deep resources and a well-defined process to integrate ESG factors into investment analysis and decisions. Both firms are also active in stewardship and engagement.

The focus of our sustainable investing strategy remains on how current funds integrate ESG factors into their investment process. However, we will also add new investment options that are unique in their objectives to invest for a sustainable future (e.g. positive screening, thematic/impact, etc).

Do you have to take any action?

You do not need to take any action. You may consider whether the new funds would be suitable additions to your lineup.

Questions?

Please contact your Sun Life Group Retirement Services representative.