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 segregated fund in accordance with the Insurance Companies Act (Canada).
Sun Life will close the CI Global Value Segregated Fund (discontinued fund) on November 16, 2022. Governance will end in November 2022. We made the decision due to lack of demand, low asset levels and to streamline our fund offering.
You may need to take action
On November 16, 2022, we’ll move any money in – and any future contributions directed to - the discontinued fund to Sun Life MFS Global Value Segregated Fund (replacement fund). The discontinued and replacement funds have the same style (Value) and same approach (fundamental, bottom-up security selection). The investment management fees for the replacement fund will be the same, or lower than, those for the discontinued fund.
The transfer will happen unless we explicitly receive different instructions from you (see next paragraph).
You may want to transfer the money in the discontinued fund into either:
- a fund currently in your line-up in a similar asset class (Global Equity), or
- an alternative on the Core investment platform which better suits your plan’s needs.
If you wish to select a different replacement fund and/or date of asset transfer before November 16, 2022, you need to make this selection and inform Sun Life of your decision by September 30, 2022. If you are satisfied with the automatic replacement fund and date suggested above, you don’t have to take any action.
Your plan may not currently offer the replacement fund. In that situation, Sun Life will automatically add the replacement fund to your lineup before the asset transfer occurs.
How will this affect your members?
When Sun Life makes the change, your members will see a sale of the discontinued fund and a purchase of the replacement fund in their account. This change will not result in a taxable capital gain or loss for members with money in a registered plan.
Plan members in a non-registered plan, will likely experience a capital gain or loss when the transfer occurs. The members must report capital gains or losses on their tax return in the year the transfer occurs. We recommend plan members talk with a tax professional for advice specific to their situation if they have money in a non-registered (taxable) plan.
Members will also have their contribution instructions for the discontinued fund updated to the replacement fund. They can also move their money in the discontinued fund to any other available funds offered in the plan. This can be done at any time before the transfer automatically takes place on November 16, 2022.
About the replacement fund
SLGI Asset Management Inc. is the manager of the replacement fund with MFS Investment Management Canada Limited (MFS) acting as the sub-advisor. The Fund seeks to provide capital appreciation. It invests in companies whose equity securities’ prices are lower than their perceived worth. MFS employs fundamental analysis to identify companies with sustainable franchises and opportunities for long-term growth.
The replacement fund has the same style (Value) and same approach (fundamental, bottom-up security selection) as the discontinued fund. They also have the same benchmark (MSCI World Index). The replacement fund is less concentrated (100-130 securities) than the discontinued fund (75-100 securities). It also has a maximum limit of 10% allocation in emerging markets. The discontinued fund had no restrictions on the emerging markets allocation.
The replacement fund’s return (9.32%) was higher than the discontinued fund’s return (7.70%), on an annualized basis over the last five-year period ending March 31, 2022. Both funds underperformed the benchmark (11.54%) over the same period. This is consistent with both funds’ Value style. In general, Value funds have underperformed Growth funds and broad equity markets over this period.
Please contact your Sun Life Group Retirement Services representative.