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 KBI Global Dividend Private Pool

Fund commentary | Q2 2021

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Opinions and commentary by KBI Global Investments.

Market Review

Q2 2021 was an exceptionally strong quarter for equity markets. The bullish trend that started at the beginning of the year continued into the second quarter. Flows into equities were strong through much of the quarter however a reversal in the final weeks of June benefited tech related companies and stalled the rotation into value. However, within these market flows a significant proportion was targeted towards financial stocks with investors becoming more concerned about inflation. This inflation dynamic was also evident within fixed income markets where there was a significant fall off in demand for treasuries and increased appetite for Treasury Inflation-Protected Securities (TIPS). The market experienced very strong earnings season during the period as fundamentals continued to improve.    

Portfolio Review

The Fund underperformed the benchmark during the quarter. The portfolio was impacted by a reversal into growth stocks towards the end of the quarter. Following consistently strong inflation data, at its June meeting, the Fed made public comments recognising the strength of economic growth and the increasing pressure on inflation. This Fed meeting is the key catalyst that triggered a reversal of the market dynamics of the previous months and negatively impacted our strategy’s performance. The Fund selects stocks with fundamentals that deserve to be trading at higher share prices regardless of the industry group that they belong to. Similarly, KBI’s approach is to find stocks with strong fundamentals that are being underpriced by the market across industry group. 

Market Outlook

As economies recover, bond yields pick up and deflation concerns subside, investors will be less willing to pay an excessive premium for growth stocks. As the cycle evolves and investors become more selective, KBI expects there will be more emphasis on quality which is an important feature in the KBI portfolio. Given the backdrop of unwinding of deflationary expectations and return of rising yields, even to a moderate extent, the Sub Advisor sees potential for a sea change in market dynamics in the coming years reversing the decade long trend where equity markets have been mainly driven by multiple expansion – all of which should be supportive for KBI’s approach to investing

Sun Life Global Dividend Private Pool Monthly snapshot:

Series A Series F

Effective July 14, 2021 Sun Life Global Dividend Private Pool was renamed Sun Life KBI Global Dividend Private Pool.

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, 2021. SLGI Asset Management Inc. is a member of the Sun Life group of companies. All rights reserved.