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 Global Tactical Yield Private Pool

Fund commentary | Q2 2021

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Opinions and commentary by Sun Life Global Investments.

The market’s recovery from its COVID-19 selloff is starting to read like a three-act play. In the opening act, as the work-from-home trade kicked in, growth stocks led the market off the March, 2020 bottom. In the second act, with the economy opening up, value stocks took the market to new highs. Now, a less clear third act is coming into sight. On one side major markets are at all-time highs and valuations appear stretched. On the other, investors are focused on rising inflationary pressures, and the U.S. Federal Reserve appears willing to raise interest rates sooner than expected. And since those concerns came into view late in the quarter, markets have had difficulty pushing higher.

What will the outcome of the third act be? That remains to be seen. But with the market on a 15-month bull run, the risk/return trade off has become less attractive. And given the lack of catalyst to move the market higher, we expect returns to be range bound over the summer. However we remain somewhat bullish longer term on the market overall, which continues to be supported by strong economic growth, solid earnings and the steady rollout of vaccinations.

Even against that positive backdrop, COVID -19 still poses a risk to the market as it continues to mutate. The more contagious Delta variant is now spreading rapidly in 98 countries. In Britain it accounts for 91% of new cases and is rapidly becoming the dominant strain in under-vaccinated U.S. states. We have yet to see whether its advance will slow attempts by countries to reopen their economies, particularly those where vaccinations have been limited by supply. If it does, it may have a negative follow through in the market and that is something we’re watching closely.

We entered the second quarter with the Sun Life Global Tactical Yield Pool positioned for an environment in which markets would continue to price in a durable economic recovery coupled with a shift in preference towards more cyclically exposed segments of the equity market. We maintained an overweight position in Global Equities, at 53% of the portfolio. A relative underweight to fixed income continues to be supported by our expectation that yields will face further pressure to the upside after consolidating in the second quarter. Within the bond component of the Pool, we continued to maximize our allocation to alternative fixed income to take advantage of ongoing opportunities within global credit markets.

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.

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