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 fund 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 December 13, 2023, we’ll close CI U.S. Stock Selection segregated fund (“discontinued fund”). We made the decision due to:

  • Concerns on CI Global Asset Management’s (CI GAM) ability to retain talent.
  • A significant change in the investment strategy. 

CI GAM experienced high investment personnel turnover 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 on CI GAM’s ability to create a stable, integrated research team.

In June 2021, CI GAM moved the management of the discontinued fund from a sub-advisor, Epoch Investment Partners, Inc. (“Epoch”), to an in-house team led by Peter Hofstra.  Epoch had managed the fund in a traditional Value style. The new team manages the fund as “quality with growth bias” style. The number of holdings in the fund also declined from 50-70 securities under Epoch’s management to 30-50 securities under the new team’s management.

We designated the fund as “On Watch” since Q2 2021 following the termination of Epoch as sub-advisor and the investment style change. 

On December 13, 2023, we’ll transfer any money in – and any future contributions directed to - the discontinued fund to Beutel Goodman American 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 the same style as the discontinued fund under Epoch’s management (Value). The replacement fund also has the 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 US equity fund already available in your line-up, or
  • an alternative US 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 December 13, 2023, you need to make this selection and inform Sun Life of your decision by October 20, 2023. 

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

How will this affect your members?

On December 13, 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 December 13, 2023.

About the Beutel Goodman American Equity segregated fund

The replacement fund seeks to maximize portfolio returns through capital enhancement and investment income. Beutel Goodman team employs fundamental analysis to identify companies whose current stock prices don’t reflect their full value. The team expects these companies’ stock prices will increase as the marketplace recognizes the true value of the companies. The replacement fund may hold 25-50 securities. 

Questions?

Please contact your Sun Life Group Retirement Services representative.