Call to Action to review the closure and asset transfer of the MFS Global Equity Segregated Fund

Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the fund listed below. They are established as a segregated fund under the Insurance Companies Act (Canada).

Action may be required

You don’t have to take action if you are comfortable with the replacement fund described below. If you wish to select a different replacement fund, please review the communication in detail.

Sun Life Group Retirement Services (GRS) regularly reviews the Core investment platform in response to Client interest and evolving fund offerings in the market.

Sun Life will close MFS Global Equity Segregated Fund (the closing fund) on February 19, 2027. We have decided to close the fund due to lack of Client interest and declining assets. The closing fund has been On Watch since Q4 2025, as noted in our most recent update here. It is On Watch due to the planned departure of co-Lead PM Roger Morley from the strategy, as well as, most importantly a significant drop in strategy assets over the recent years, particularly in the last two years. Assets in the underlying MFS fund have dropped from US$50.8 billion in December 2019 to US$7.7 billion in March 2026.  In addition, 61% of Sun Life clients in the segregated fund have confirmed they are leaving the fund before the first quarter of 2027. 

We’ll continue to conduct governance activities on the discontinued fund and members may continue to invest in and contribute to the closing fund until its closure.

On February 19, 2027, we’ll transfer any money in – and any future contributions directed to - the closing fund to the replacement fund listed below.

Both funds aim to outperform the broader market over a long-term time frame. While both funds share the same investment objective, they achieve it through different approaches as summarized below.

Closing fund

• The investment team uses fundamental analysis to identify companies with sustainable above-average growth and returns. 
• High conviction approach that may lead to significant differences in sector and regional allocations relative to those in the benchmark.
• Returns may vary meaningfully versus the market from year to year. Some years may be strong, while others may lag the market. As such, this fund may be best suited for plan members who are comfortable staying invested through ups and downs.

Replacement fund

• The investment team uses a combination of fundamental and quantitative analyses to identify companies with sustainable above-average growth and returns. 
• Sector-neutral approach with small differences in sector and regional allocations relative to those in the benchmark.
• Returns tend to be closer to the benchmark but can still vary versus the market from year to year. As such, this Fund may be best suited for plan members who want a smoother return experience compared to the high-conviction approach of the closing fund.

The replacement fund is designed to perform more closely to the global equity market, and have less significant ups and downs compared to the closing fund.

Notes: MFS Global Equity benchmark is MSCI World Ex-Canada Net (C$).
MFS Blended Research Global Equity benchmark is MSCI All Country World Index Net (C$).

The investment management fees for the replacement fund will be lower than those for the closing fund.

Your plan(s) may not currently offer the replacement fund in the lineup. In that case, we’ll add the replacement fund to your fund lineup on the same day, before the asset transfer occurs on February 19, 2027.

Next steps

The transfer will happen as described above, unless we receive different instructions from you in writing (see next paragraph).

You may want to transfer the money in the discontinued fund into either:

• Another fund currently available in your line-up, or
• An alternative fund on the Core investment platform which better suits your plan’s needs

If you wish to select a different replacement fund, you need to make this selection and inform Sun Life of your decision by November 6, 2026.

You don’t have to take any action if you are satisfied with the replacement fund and transfer date as described above.

How will this affect your members?

On February 19, 2027, we’ll automatically transfer any money remaining in – and any future contributions directed to – the closing fund to the replacement fund. When the change happens, your members will see a sale of the discontinued fund and the purchase of the replacement fund in their account(s).  This transaction may result in a taxable capital gain or loss for your members invested in a Non-Registered plan.

We’ll send an email to members who currently hold the closing fund in November 2026. Here is a copy for your reference.

Plan members can also move their money to any other fund(s) offered in the plan. They can do so at any time before the transfer automatically takes place on February 19, 2027.

Sun Life will provide the applicable tax slip(s) in early 2028. The tax slip(s) will reflect all income from your members’ Non-Registered investments.

For more information on how capital gains can occur in segregated funds within Non-Registered plans, please read the article here. Members can find their ACB on Plan Member Services website mysunlife.ca and selecting Check on Account > Balances.

More details on the Replacement Fund

We added the MFS Blended Research Global Equity Segregated Fund to the core investment platform earlier this year. You can read about it here.

This Fund provides a lower tracking global equity option, along with generally lower fees compared to typical fundamental actively-managed funds.

MFS’s Blended Research funds combine bottom-up fundamental and quantitative research. The Fund’s inception was in May 2011 and is in the Large Cap Core category of our platform.

The Fund is managed by MFS’ Blended Research team, which also manages MFS’ low volatility, income-focused, and targeted tracking error strategies. The portfolio management team consists of lead Portfolio Manager (PM) Jonathan Sage, Nathan Bryant, Matthew Kummel, Jed Stocks and Jenny Zhang. They are supported by MFS’s Quantitative Equity research team.  

You can obtain more information about the replacement fund by accessing the Morningstar section of the plan sponsor web site.

Simplified Pension Plan (SPP) and My Money For Life (MMFL) considerations

For SPP (Sun Life pre-selected funds) and MMFL assets invested in MFS Global Equity, additional details will be provided once the respective processes are finalized.