SERIES T CALCULATOR

CALCULATE TAX EFFICIENCIES FOR MONTHLY CASH FLOW

Your INVESTMENT

Your TAX RATE

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NOTE: This illustration uses Corporate Class funds only and assumes the distribution consists of 100% return of capital.

YOUR RESULTS

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INVESTMENT GROWTH SUMMARY SERIES AT:
BEGINNING MARKET VALUE $184,605
ENDING MARKET VALUE $184,148
ACCUMULATED CASH FLOW AFTER TAX $184,148
ADJUSTED COST BASE $184,148
TOTAL TAXES PAID $184,148
TAXES PAID AS A PERCENTAGE OF CASH FLOW $184,148

Series AT pays a monthly distribution that includes return of capital. A return of capital reduces an investor’s adjusted cost base (ACB). Capital gains are deferred until units are sold or until the ACB goes below zero. This provides the investor with the opportunity to defer tax as well as control over the timing of when securities are ultimately disposed, and capital gains assessed.

YEAR MARKET VALUE RATE OF RETURN CASH FLOW BEFORE TAX TAX CASH FLOW AFTER TAX ADJUSTED COST BASE
1993 $XXX,000 XX,00% $XXX,000 $X,000 $XXX,000 $X,000
1993 $XXX,000 XX,00% $XXX,000 $X,000 $XXX,000 $X,000
1993 $XXX,000 XX,00% $XXX,000 $X,000 $XXX,000 $X,000
INVESTMENT GROWTH SUMMARY SERIES AT:
BEGINNING MARKET VALUE $184,605
ENDING MARKET VALUE $184,148
ACCUMULATED CASH FLOW AFTER TAX $184,148
ADJUSTED COST BASE $184,148
TOTAL TAXES PAID $184,148
TAXES PAID AS A PERCENTAGE OF CASH FLOW $184,148

Series AT pays a monthly distribution that includes return of capital. A return of capital reduces an investor’s adjusted cost base (ACB). Capital gains are deferred until units are sold or until the ACB goes below zero. This provides the investor with the opportunity to defer tax as well as control over the timing of when securities are ultimately disposed, and capital gains assessed.

YEAR MARKET VALUE RATE OF RETURN CASH FLOW BEFORE TAX TAX CASH FLOW AFTER TAX ADJUSTEd COST BASE
1993 $XXX,000 XX,00% $XXX,000 $X,000 $XXX,000 $X,000
1993 $XXX,000 XX,00% $XXX,000 $X,000 $XXX,000 $X,000
1993 $XXX,000 XX,00% $XXX,000 $X,000 $XXX,000 $X,000
Year Cash Flow Market Value Adjusted Cost Base

RETURN OF CAPITAL (ROC)

When you receive a distribution from your Series T mutual fund, a portion of it may be what’s called return of capital (ROC).

Return of capital is a portion of your original invested capital paid back to you. Another way to define return of capital is to say it’s the portion of a fund’s distribution that’s in excess of earnings generated through dividends, interest income, foreign income and realized capital gains. Note that if a fund’s earnings are insufficient to meet the requirements of the distribution policy, ongoing return of capital may deplete your investment.

Return of capital can help maximize current cash flow because it is not taxable in the year it’s received. Instead, it’s subtracted from the adjusted cost base of your investment. A smaller adjusted cost base will typically mean a larger capital gain (or smaller capital loss) when you eventually sell your investment. If return of capital causes the adjusted cost base to fall to zero, further return of capital distributions would be taxable as capital gains in the year they’re received.

Return of capital also offers the opportunity to defer clawbacks on government benefits such as Old Age Security by reducing your taxable income in the year the cash flow is received – as described above.

MUTUAL FUND TRUSTS

For mutual funds organized as trusts, if necessary, income, dividends or capital gains are paid in December of each year, though the funds may make distributions of income, dividends, capital gains or capital at any other time as we consider appropriate.

Series T funds organized as trusts also likely distribute some amount of taxable income in addition to ROC, including interest income, foreign income, dividends and capital gains. The amount of ROC in a Series T distribution can vary from year to year and from fund to fund.

MUTUAL FUND CORPORATIONS

Corporate class funds pay any ordinary dividends in December and any capital gains dividends within 60 days after December 31st each year.

For potentially greater tax efficiency and more cash flow flexibility, consider Series AT, our corporate class equivalent to Series T.

Series AT are only offered by Sun Life Global Investments’ corporate class mutual funds, and are structured to distribute 100% return of capital. They may also pay an additional annual distribution of taxable income (dividends and capital gains) that’s outside the targeted monthly cash flow, but overall, the tax deferral benefits of Series AT can be greater than for Series T.

Outside of a registered plan, corporate class funds can be used to build a diversified portfolio and then, when you’re ready to have the cash flow paid back to you, switch to Series AT of those Funds. Within the corporate class structure, you can transition smoothly from accumulation to decumulation by converting to AT shares.

Adjusted cost base (ACB) is used to calculate capital gains or losses when your mutual fund securities are eventually sold. To track your ACB, determine your initial investment amount plus any additional contributions and reinvested distributions, and subtract any return of capital distributions and redemptions.

HOW MY DISTRIBUTION IS DETERMINED

The dollar amount of a Series T or Series AT distribution is calculated as a percentage of the fund’s net asset value per security. It’s re-calculated at the end of every year and the new monthly distribution is set for the next 12 months. Series T5/AT5 funds target an annual distribution of 5% paid monthly. Series T8/AT8 funds target an annual distribution of 8% paid monthly. At the start of every year you know how much your Series T or Series AT fund is likely to distribute each month, which can make for more precise planning. Series T and Series AT funds must have their cash flows “turned on” by the investor. Without specific instructions for a cash payout, the funds will automatically reinvest the distributions.

This calculator shows hypothetical examples. It is not meant to represent the actual returns or distributions of any Sun Life Global Investments mutual fund. We calculated the ACB of this hypothetical example assuming 100% ROC, which is how all Sun Life Global Investments’ Series AT funds are structured as defined in the simplified prospectus. Series AT funds may pay an additional annual distribution made up of dividends or capital gains dividends that would be taxable in the year they’re received. Data source for category returns: Morningstar.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

The payment of distributions is not guaranteed and may fluctuate. The payment of distributions should not be con-fused with a fund’s performance, rate of return, or yield. If distributions paid by the fund are greater than the performance of the fund, then your original investment will shrink. Distributions paid as a result of capital gains realized by a fund and income and dividends earned by a fund are taxable in your hands in the year they are paid. Your adjusted cost base will be reduced by the amount of any return of capital. If your adjusted cost base goes to zero, then you will have to pay capital gains tax on the amount below zero.

Sun Life Global Investments Corporate Class mutual funds each represent a separate class of shares of Sun Life Global Investments Corporate Class Inc., a mutual fund corporation.

The information contained in this illustration is intended for client use with advisors for general informational use only and is compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made as to its accuracy. The material contained herein is not intended to provide specific financial, tax, insurance, investment, legal or accounting advice and should not be relied upon in that regard and does not constitute a specific offer to buy and/or sell securities.