Fund details
Fund type Diversified Income Securities offered Series A, Series AT5,
Series E, Series EF, Series F, Series I and Series O shares of a class of a mutual fund corporation
Start date Series A: August 1, 2013 Series AT5: August 1, 2013 Series E: April 1, 2014 Series EF: August 10, 2015 Series F: August 1, 2013
Portfolio manager Sun Life Global Investments Canada
Toronto, Ontario What does the fund invest in?
Investment objectives
The Fund’s investment objective is to seek to achieve income and long-term capital growth through exposure to primarily a diversified portfolio of fixed income and income-oriented equity securities by investing primarily in units of Sun Life Dynamic Strategic Yield Fund* or its successor fund (the
“underlying Trust Fund”).
Where the portfolio manager considers it appropriate or necessary, the Fund may invest in securities, which may include securities of other mutual funds (including exchange-traded funds), identical or substantially similar to those in which the underlying Trust Fund invests.
The investment objective of the Fund can only be changed with the approval of a majority of the shareholders at a meeting called for such purpose.
Investment strategies
The portfolio manager currently intends to achieve the Fund’s investment objectives by investing all, or substantially all, of the assets of the Fund in the underlying Trust Fund, a mutual fund that is managed by us and sub-advised by 1832 Asset Management L.P. (formerly GCIC Ltd.) (manager of the Dynamic Funds*) (the “sub-advisor”). The underlying Trust Fund’s investment objective is to seek to achieve
income and long-term capital growth primarily by investing directly in a diversified portfolio of fixed income and income- oriented equity securities, or indirectly by investing in mutual funds (including exchange-traded funds) that invest in such securities.
Prior to September 30, 2015, the sub-advisor of the underlying Trust Fund will seek to achieve the underlying Trust Fund’s investment objectives by investing all, or substantially all, of the assets of the underlying Trust Fund in Dynamic Strategic Yield Fund*, a mutual fund that is managed and advised by 1832 Asset Management L.P. The underlying fund’s investment objective is to seek to achieve high income and long-term capital growth by investing in a diversified portfolio of fixed income and income-oriented equity securities. Effective as of September 30, 2015, the sub-advisor of the underlying Trust Fund will seek to achieve the underlying Trust Fund’s investment objectives by investing all, or substantially all, of the assets of the underlying Trust Fund directly in a diversified portfolio of fixed income and income-oriented equity securities.
In pursuing the underlying Trust Fund’s investment objectives, the sub-advisor:
• seeks to take a flexible approach to investing primarily in debt and income-oriented equity securities with no restrictions on market capitalization, industry sector or geographic mix;
• allocates portfolio assets depending on economic and market conditions;
• in respect of debt instruments:
• will primarily invest in investment grade debt instruments but may also invest in noninvestment grade or unrated debt instruments;
• may invest in convertible bonds, high-yield debt and government bonds;
• may invest in mortgage-backed securities;
• assesses the condition of credit markets, the yield curve, as well as the outlook on monetary conditions;
Sun Life Dynamic Strategic Yield Class * (continued)
* Dynamic, Dynamic Funds, Dynamic Strategic Yield Class and Dynamic Strategic Yield Fund are registered and proprietary trademarks of Scotiabank, an affiliate of 1832 Asset Management L.P., used under license by the Manager.
• in respect of equity securities:
• will primarily invest in dividend or income paying securities including preferred shares and convertible preferred shares, investment trust units and other high yielding equity securities, and REITs on a global basis;
• may invest in closed-end funds trading at a discount to their net asset values;
• analyzes the financial and managerial prospects for a particular company and its relevant sector;
• conducts management interviews with companies to determine the corporate strategy and business plan, as well as to evaluate management capabilities;
• may invest up to 100% of the underlying Trust Fund’s assets in foreign securities;
• may use derivatives to hedge against interest rate risk, credit risk and currency fluctuations;
• may generate additional income through covered call writing and other derivative strategies;
• may invest in private placements in equity and/or debt securities of public or private companies; and
• may invest up to 100% of the underlying Trust Fund’s assets in securities of other mutual funds (including exchange-traded funds), including mutual funds that may be managed by the Manager or sub-advisor and/or an affiliate of the Manager or sub-advisor and, in selecting these other mutual funds that may be held by the underlying Trust Fund, the sub-advisor uses the same criteria as it uses for selecting the underlying Trust Fund’s investments as described above but, prior to September 30, 2015, will restrict its investments in other mutual funds to no more than 10% of Dynamic Strategic Yield Fund’s assets.
The underlying Trust Fund may invest in gold and silver when deemed appropriate by the sub-advisor.
The underlying Trust Fund obtained exemptive relief from the Canadian securities regulatory authorities to permit it to invest in silver or permitted silver certificates. The underlying Trust Fund is permitted to invest up to 10% of its net asset value in gold, permitted gold certificates, silver, permitted silver certificates and specified derivatives of which the underlying interest is gold or silver.
The underlying Trust Fund also may engage in short selling. In determining whether securities of a particular issuer should be sold short, the sub-advisor utilizes the same analysis that is described above for deciding whether to purchase the securities. Where the analysis generally produces, in the sub-advisor’s view, a favourable outlook, the issuer is a candidate for purchase. Where the analysis produces, in the sub-advisor’s view, an unfavourable outlook, the issuer is a candidate for a short sale. The underlying Trust Fund will engage in short selling as a complement to its current primary discipline of buying securities with the expectation that they will appreciate in market value.
The Fund and the underlying Trust Fund may each hold all or a portion of its assets in cash, money market instruments, bonds or other debt securities to meet subscription or redemption requests, or for defensive or other purposes.
Each of the Fund and the underlying Trust Fund may use derivatives to hedge against potential loss from factors such as currency fluctuations, stock market risks and interest rate changes. Each of the Fund and the underlying Trust Fund may also use derivatives for other hedging and non-hedging purposes, such as to gain exposure to certain securities without investing directly in such securities, to generate income, or to provide protection for its portfolio. The Fund and the underlying Trust Fund will only use derivatives as permitted by Canadian securities regulatory authorities. For a description of some of the types of derivatives and the risks that may be associated with the use of derivatives, please see the discussion under Derivative risk on page 7.
The Fund and the underlying Trust Fund may enter into securities lending, repurchase and reverse repurchase transactions to earn additional returns. For a description of these transactions and how the Fund manages the risks associated with these transactions,
Sun Life Dynamic Strategic Yield Class * (continued)
* Dynamic, Dynamic Funds, Dynamic Strategic Yield Class and Dynamic Strategic Yield Fund are registered and proprietary trademarks of Scotiabank, an affiliate of 1832 Asset Management L.P., used under license by the Manager.
please see the discussion under Repurchase and reverse repurchase transactions and securities lending risk on page 11.
What are the risks of investing in the fund?
The Fund invests in the underlying Trust Fund, and so the risks of investing in the Fund include the risks of investing in the Fund and the risks of investing in the underlying Trust Fund. The Fund will be exposed to the following risks:
• Asset-backed and mortgage-backed securities risk
• Capital depletion risk (for Series AT5 investors only)
• Class risk
• Commodity risk
• Concentration risk
• Credit risk
• Currency risk
• Derivatives risk
• Equity risk
• Foreign investment risk
• Inflation risk
• Interest rate risk
• Large transaction risk
• Liquidity risk
• Market risk
• Real estate risk
• Regulatory risk
• Repurchase and reverse repurchase transactions and securities lending risk
• Series risk
• Short selling risk
• Small company risk
• Specialization risk
• Tracking risk
• Underlying fund risk
For a detailed description of these mutual fund risks, see What are the specific risks of investing in a mutual fund? beginning on page 5.
As at June 30, 2015, an investor owned 20.34% of the issued and outstanding shares of the Fund. Please see Large transaction risk on page 9 for details of the risk associated with a possible redemption of shares of the Fund by this investor.
We have classified this Fund’s risk level as low to medium. Please see Fund risk classification on
page 54 for a description of the methodology we use to classify this Fund’s risk level.
Who should invest in this fund?
This Fund may be suitable for investors who:
• seek income and capital growth potential through investments in both equities and fixed income securities;
• are medium to long term investors;
• are comfortable with low to medium investment risk; and
• desire the flexibility to switch to another class of Sun Life Global Investments Corporate Class Inc. without realizing capital gains.
Series AT5 shares may be suitable for investors holding shares outside of a registered plan and wishing to receive monthly distributions.
Distribution policy
The Fund pays any ordinary dividends in December and any capital gains dividends within 60 days after December 31 each year. Distributions are automatically reinvested in additional shares of the Fund, unless shares are held outside a registered plan and you provide us a written request that you wish to receive them in cash.
For Series AT5 shares, the Fund intends to make monthly distributions based on a target annualized rate of 5% of the NAV per share at the end of the prior year. The monthly distributions on Series AT5 shares are comprised of capital.
The monthly distributions on Series AT5 shares are not intended to reflect the Fund’s investment performance and should not be confused with “yield”
or “income”. The distribution rate on this series may be greater than the return on the Fund’s investments. If the cash distributions to you are greater than the net increase in the value of your investment, the distributions will erode the value of your original investment.
We reserve the right to adjust the amount of the monthly distribution if we consider it appropriate, without notice. There can be no assurance that
Sun Life Dynamic Strategic Yield Class * (continued)
* Dynamic, Dynamic Funds, Dynamic Strategic Yield Class and Dynamic Strategic Yield Fund are registered and proprietary trademarks of Scotiabank, an affiliate of 1832 Asset Management L.P., used under license by the Manager.
Series AT5 shares will make any distributions in any particular month.
Fund expenses indirectly borne by investors Expenses payable over:
1 year 3 years 5 years 10 years
Series A $24 $76 $134 $304
Series E $24 $76 $133 $302
Series AT5 $24 $76 $134 $304
Series F $13 $40 $71 $161
Series O $2 $8 $14 $31
This information is not available for Series EF and Series I because those series are new and therefore expenses are not yet known.