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 a segregated funds under the Insurance Companies Act (Canada).

Sun Life regularly reviews the fund offerings in response to client interest and evolving fund offerings in the market.

On November 7, 2023, we’ll close CI Canadian Equity segregated fund (“discontinued fund”). We made the decision that we have lost long-term confidence in the fund due to:

  • Repeated portfolio management team changes. 
  • High investment personnel turnover in CI Global Asset Management (CI GAM) following the integration of in-house investment brands and investment teams in early 2021. In particular, a significant number of CI GAM research analysts from the legacy Signature Global Asset Management team departed the firm in 2022. The heightened level of turnover raised our concerns about CI GAM’s ability to create a stable, integrated research team.

The fund has experienced significant changes to the portfolio management team in the past three years. 

  • Co-Portfolio Manager (“co-PM”), Brandon Snow, retired in early 2021. CI GAM appointed Stephen Groff, who had managed the fund with Snow since 2017, as lead PM. CI GAM also appointed Peter Hofstra as a co-PM alongside Groff.    
  • Groff subsequently left CI GAM in July 2021. CI GAM appointed Bryan Brown as co-PM alongside Hofstra.
  • In May 2023, Peter Hofstra stepped down from the portfolio management role to focus on his responsibilities as co-Head of Equity. Bryan Brown became the sole PM going forward. 

We designated the fund as “On Watch” in 2021 following Stephen Groff’s departure. We downgraded the fund in 2023 to “Suggested for Removal” after Peter Hofstra stepped down from the fund’s portfolio management team.  

On November 7, 2023, we’ll transfer any money in – and any future contributions directed to - the discontinued fund to MFS Canadian Equity segregated fund (“replacement fund”). The transfer will happen automatically unless we explicitly receive different instructions from you (see “Action may be required” section below).

The replacement fund has a similar style (Growth) and same approach (fundamental, bottom-up security selection) as the discontinued fund. The investment management fees for the replacement fund will be the same, or lower, than those for the discontinued fund.

Your plan(s) may not currently offer the replacement fund in the lineup. In that situation, we’ll automatically add the replacement fund to the lineup before the asset transfer occurs.

Sun Life’s governance activities on the discontinued fund will end after the fund closure.

Action may be required

You may want to transfer the money in the discontinued fund into either:

  • another Canadian equity fund already available in your line-up, or
  • an alternative Canadian equity fund available on the Core investment platform which better suits your plan’s needs.

If you wish to select a different replacement fund and/or asset transfer date before November 7, 2023, you need to make this selection and inform Sun Life of your decision by September 29, 2023. 

You don’t have to take any action if you are satisfied with the automatic replacement fund and date suggested above.

How will this affect your members?

On November 7, 2023, we’ll automatically transfer any money remaining in – and any future contributions directed to – the discontinued fund to the replacement fund. When the changes are implemented, plan members will see a sale of the discontinued fund and the purchase of the replacement fund reflected in their accounts. This change will not result in a taxable capital gain or loss for plan members if their money is invested in a registered plan. 

Plan members with money in a non-registered plan will likely experience a capital gain or loss when we transfer the money to the replacement fund. The members must report capital gains in the year the transfer occurs. 

Plan members can move their money to any other funds offered in the plan. They can do so at any time before the transfer automatically takes place on November 7, 2023.

About the MFS Canadian Equity segregated fund

The replacement fund seeks capital appreciation by investing primarily in equity securities of Canadian companies with above-average earnings growth potential. MFS employs fundamental analysis to assess their growth potential considering their current financial condition and industry position, as well as market, economic, political and regulatory conditions. 

Both funds may invest in companies with small capitalization with outstanding growth potential. 

Questions?

Please contact your Sun Life Group Retirement Services representative.