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 | Q1 2021

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Opinions and commentary by Sun Life Global Investments.

Global equities continued to push higher in the first quarter of 2021, benefitting our overall bullish posture. Interest rates remain low, corporate earnings are solid and fiscal and monetary stimulus continues to support the economy, with more likely to come. Moreover, consumers have built up their savings as they have largely stayed home. It is substantial, with Bloomberg estimating it at U.S. $2.9 trillion worldwide. If this pent up demand is unleashed as expected, it could provide a significant boost to the global economy.

On top of that, many companies have trimmed expenses and re-invented themselves. This should make them more efficient and support future earnings growth. With those tailwinds, we expect markets to continue to move higher.

As equity markets rallied, the re-opening trade saw growth stocks retreat while value and cyclical stocks advanced.  With this rotation, dividend-paying stocks that comprise the global equity allocation within the portfolio significantly outperformed the broader market.   

Within bond markets, expectations for economic growth were the primary driver, with the IMF forecasting global GDP to grow by 6.0% in 2021 as vaccination rates improve and more countries are able to reopen their economies.  This led to an increase in both inflation expectations and real yields. The ensuing selloff in bonds, which sent yields on ten-year Canadian bonds soaring from 0.81% to 1.55%, benefitted the portfolio’s underweight allocation to fixed-income.

We entered the first quarter with the Fund 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 as the global economy marches towards normalization. Within the bond component of the Fund, we continued to maximize our allocation to alternative fixed income - looking 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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