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Sun Life Real Assets Private Pool

Fund commentary | Q3 2022

Global equities ended the quarter in negative territory once again. It was a tale of two halves as global equities rebounded at the start of the quarter before reversing course midway through due to increasingly hawkish commentary from central banks amid elevated inflation and concerns around economic growth. In this environment, real assets produced negative returns as well, particularly global real estate.

In terms of relative positioning, the fund maintains a tilt towards Natural Resources. In turn, the fund is modestly underweight Infrastructure and global REITs.

The infrastructure component of the fund favours assets with high revenue certainty, profitability, and lower volatility. The strategy remains biased towards Europe in reference to more favorable valuations. Stock selection drove returns with positions in European and UK utilities were negatively impacted by concerns around recession risks and the energy crisis in the region.  

The real estate component of the fund favours higher quality real estate and generally looks to invest in property types experiencing real cash flow growth, with strong balance sheets and managed by skillful teams. Stock selection remains the primary driver of returns. The strategy continues to favour apartments, manufactured homes, self-storage, and industrial properties.

The Resources component focuses on Clean Energy, Water, and Agriculture. Resource scarcity is a fundamental underpinning of the strategy, which invests in companies providing solutions to demand, supply, and efficiency in the provision of food, energy, water, as well as mitigation and adapting to the impact of climate change. Positive stock selection and allocation decisions in Materials were the largest contributors to performance. The overweight in Utilities, which were negatively impacted by rising rates, and large underweight in Energy, as the fund does not hold oil and gas related companies, detracted from relative performance.

Compound returns %1 Since inception2 5 Year 3 Year 1 Year Q3
Sun Life Real Assets Private Pool - Series A

3.0

 2.6 2.6 -10.8 -5.4
Sun Life Real Assets Private Pool - Series F

4.2

 3.8 3.6 -9.8 -5.2
Benchmark3

4.3

 4.3 1.8 -2.3 -2.77

¹Returns for periods longer than one year are annualized. Data as of September 30, 2022. 

²Partial calendar year. Returns are for the period from the fund’s inception date of February 2, 2015 to December 31, 2015.

³Blended benchmark comprised of: 35% FTSE EPRA/NAREIT Developed Real Estate Index (C$),35% S&P Global Infrastructure Index (C$), 30% S&P Global Natural Resource Index (C$).

On May 31, 2019, Sun Life Real Assets Fund, previously Sun Life Infrastructure Fund, changed its name and underwent a change in investment objective. On February 26, 2020 Sun Life Real Assets Fund was renamed Sun Life Real Assets Private Pool.

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, 2022. SLGI Asset Management Inc. is a member of the Sun Life group of companies. All rights reserved.