Effective November 27, 2021, the deferred sales charge and low load sales charge purchase options will no longer be available for purchase on Sun Life Global Investments mutual funds. Switches between funds of the same sales charge purchase option will be permitted.

Sun Life Schroder Emerging Markets Fund

Fund commentary | Q2 2021

Download PDF

Opinions and commentary provided by Schroder Investment Management.

Emerging markets delivered a positive return in Q2 2021, with the Fund underperforming the index. Country allocation was positive and stock selection negative.

At a country level, the overweight positions in in Brazil and Russia, both of which outperformed, were the main positive contributors to relative performance. Brazil was among the best performing markets, with currency strength amplifying gains. Central bank rate hikes in response to rising inflation, accelerating vaccine rollouts, easing fiscal concerns and renewed progress in reforms, all helped lead the market higher. Meanwhile, high crude oil prices were supportive in Russia. These positive effects were partly offset by the overweight to South Africa. It underperformed on the back of a deteriorating COVID-19 outlook, which was exacerbated by weakness on index heavyweight Naspers Ltd., a south African multinational.

Stock selection was negative in Taiwan, with an underweight position in Evergreen Group, a shipping company, and an overweight in Hon Hai Precision, a contract manufacturer. Shipping stocks outperformed as global trade continued to recover following the pandemic. However, Hon Hai experienced a pullback after earlier outperformance was driven by electric vehicle partnerships it had entered into.

The Fund was also hindered by an underweight position in Korean internet company Kakao. It outperformed following the listing of two financial businesses. In China the Fund was overweight Ping An, one of the country’s largest insurance companies. And it was underweight Nio an electric vehicle manufacturer.

For its part, Ping An experienced slow sales recovery following the lifting of the COVID-19 lockdown in China. And Nio benefited from a rotation back towards growth sectors, with a strong outlook for electric vehicle sales in China. In Brazil, the Fund was underweight Petrobras, the state-owned oil multinational that rebounded on higher oil prices.

Compound returns %1 Since inception2 7 year 5 year 3 year 1 year Q2
Sun Life Schroder Emerging Markets Fund - Series A 3.6 8.1 12.0 9.0 29.9 1.0
Sun Life Schroder Emerging Markets Fund - Series F 4.7 9.3 13.2 10.2 31.3 1.3
MSCI Emerging Markets Index 7.9 8.7 12.0 9.1 28.1 3.5

¹Returns for periods longer than one year are annualized. Data as of June 30, 2021.

²Partial calendar year. Returns are for the period from the fund’s inception date of September 1, 2011 to December 31, 2011.

Sun Life Schroder Emerging Markets Fund - Series F Effective July 14, 2021 Sun Life Excel Emerging Markets Fund was renamed Sun Life Schroder Emerging Markets Fund

Views expressed are those of Schroder Investment Management North America Inc., 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, 2021. SLGI Asset Management Inc. is a member of the Sun Life group of companies. All rights reserved.