As of July 20, 2020, Sun Life Global Investments (Canada) Inc. changed its name to SLGI Asset Management Inc. It will take some time to update our websites, materials and forms and until that is complete, all references to Sun Life Global Investments (Canada) Inc. will mean SLGI Asset Management Inc. We’ve also brought together Sun Life mutual fund, segregated fund, annuity and guaranteed investment product businesses under the collective brand of Sun Life Global Investments.

Sun Life Global Dividend Private Pool

Fund commentary | Q3 2020

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Opinions and commentary by KBI Global Investments.

Q3 was a strong quarter for equity markets, with global developed markets returning 5.9% (CA$ terms), led by North America which was up 7.2%. Emerging markets also posted a strong return of 7.4%. In September, KBI saw initial signs of market rotation, which positively boosted relative performance but was not sustained. Relative to the value benchmark the Fund’s strategies continue to provide strong excess performance. As COVID-19 continued to dominate lives and news headlines, the continued dominance of growth stocks over value explains the performance differences within equity markets. Dividends have again proven to be resilient. During the height of the COVID-19 pandemic (six-month period February – August 2020) a significant number of companies increased their dividends.

Value and income, central to KBI’s investment thesis, underperformed in developed and emerging markets. Despite this, the portfolio continued to produce better fundamentals than the market with higher quality, dividend yield and growth. KBI has a strong focus on analyzing balance sheets for cash reserves and debt obligations. This helps the portfolio manager form an opinion on the durability of businesses and dividends over time. The portfolio manager uses this information to help identify potentially stronger companies that can better endure the current market conditions.

The market remains concentrated in a small number of high-profile companies seemingly agnostic to typical fundamentals and news flow. Strong market performance came from technology as momentum in a small number of mega-cap names continued. Companies that don’t pay a dividend significantly outperformed all other segments of the developed market.

KBI believes good quality companies, which are bought at the right price and respect the covenants with their shareholders, have the potential to outperform over time. The portfolio manager analyzes companies’ dividend patterns to understand their financial management, durability and sustainability of profits. The Fund continues to hold a portfolio of companies the portfolio manager believes have strong earnings and attractive valuation levels. 

Sun Life Global Dividend Private Pool Monthly snapshot:

Series A Series F

Views expressed are those of KBI Global Investors, sub-advisor to select Sun Life mutual funds for which SLGI Asset Management Inc. acts as portfolio manager. Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any mutual funds managed by SLGI Asset Management Inc. These views are not to be considered as investment advice nor should they be considered a recommendation to buy or sell. This commentary is provided for information purposes only and is not intended to provide specific individual financial, investment, tax or legal advice. Information contained in this commentary has been compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made with respect to its timeliness or accuracy.

This commentary may contain forward-looking statements about the economy and markets, their future performance, strategies or prospects or events and are subject to uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Forward-looking statements are not guarantees of future performance and are speculative in nature and cannot be relied upon.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Investors should read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.  The indicated rates of return are the historical annual compounded total returns including changes in security value and reinvestment of all distributions and do not take into account sales, redemption, distribution or other optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

While Series A and Series F securities have the same reference portfolio, any difference in performance between these series is due primarily to differences in management fees and operating fees. The management fee for Series A securities also includes the trailing commission, while Series F securities does not. Series A securities of the fund are available for purchase to all investors, while Series F securities are only available to investors in an eligible fee-based or wrap program with their registered dealer. Investors in Series F securities may pay a separate fee-based account fee that is negotiated with and payable to their registered dealer.

Sun Life Global Investments is a trade name of SLGI Asset Management Inc., Sun Life Assurance Company of Canada and Sun Life Financial Trust Inc.

SLGI Asset Management Inc. is the investment manager of the Sun Life Mutual Funds, Sun Life Granite Managed Solutions and Sun Life Private Investment Pools.

© SLGI Asset Management Inc. and its licensors, 2020. SLGI Asset Management Inc. is a member of the Sun Life group of companies. All rights reserved.