Sun Life Real Assets Private Pool

After a pullback in the first three weeks of April, global equity markets rallied to post solid performance for the quarter ending June 30, 2024 (Q2). In this environment, real assets performed positively but lagged broader equity markets.

Sun Life Real Assets Private Pool (Series F), (the Fund) returned -2.12% in Q2, underperforming its benchmark by 281 basis points. While the global natural resources and infrastructure component outperformed their underlying benchmarks, the global infrastructure and global real estate components lagged.

In terms of relative positioning, the Fund maintains a tilt to global natural resources to take advantage of the secular tailwinds driving clean energy and environmental sustainability. These sectors are the focus of government spending and new regulation around the world. In turn, the Fund remains modestly underweight global infrastructure and global real estate investment trusts (REIT).

The infrastructure component of the Fund underperformed its benchmark. The strategy remains biased towards Europe where valuations are favourable, and it doesn’t invest in energy. Stock selection detracted from performance as contribution from renewable energy solutions and U.S. utilities were offset by the European construction sector.

The real estate component of the Fund underperformed its benchmark due to negative stock selection in timber, multi-residential, industrial and health care facilities. The strategy continues to favour apartments, manufactured homes, self-storage and industrial properties as well as grocery chains anchored in strip malls.

The natural resources component outperformed its benchmark. An overweight position in utilities as well as an underweight in traditional energy sectors contributed to relative performance during the period.

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 subject to change and 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.

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.