Sun Life Granite Target Date and Target Risk Funds – change in passive funds

You don’t have to take any action as a result of the changes outlined below.

You receive this communication because you offer any of these funds in your plan:

• Sun Life Granite Target Date or Sun Life Granite Multi-Risk Target Date series of segregated funds (“Granite TDFs”)
• Sun Life Granite Target Risk series of segregated funds (“Granite TRFs”)

SLGI Asset Management Inc. (“SLGI”) regularly reviews the fund managers for the Granite funds and makes changes periodically, to ensure plan members continue to have strong investment outcomes. As a reminder, SLGI does not pick individual stocks and bonds for the Granite funds. They select and monitor other investment managers from around the world.

As a result of the most recent review, SLGI is changing the manager of passive (index) underlying funds within the Granite TDFs and Granite TRFs from BlackRock to State Street Global Advisors (“SSgA”). SLGI will make this change on or around April 1, 2026. The change doesn’t affect the Granite funds’ investment objectives or benchmarks.

The lists of changes are below.

SLGI may still invest in iShares Core S&P 500 in the Granite TDFs and TRFs on tactical basis.

What is the impact to your members?

For the members who invest in a Registered (non-taxable) plan, the changes won’t result in a taxable capital gain or loss. 

For the members who invest in a Non-Registered (taxable) plan, we expect the following impact(s) in the underlying funds:

• Sun Life BlackRock Canadian Universe Bond and Sun Life BlackRock Canadian Composite Equity to the Sun Life State Street equivalent funds
  These changes will have no tax implications as they don’t require any buy and sell activities.
• BlackRock US Equity Fund and iShares Core S&P 500 ETF to Sun Life State Street US Equity Index Fund
  • These changes may result in a capital gain or loss, as SLGI sells units BlackRock US Equity Fund and iShares ETF and buys units of the State Street US Equity Index Fund.
  • For members invested in the Granite TDFs, however, any capital gain or loss will be limited to those incurred since August 23, 2023 when SLGI changed the fund structure. You can find the previous communication about the fund structure.
• iShares Core MSCI EAFE ETF and iShares Core MSCI Emerging Markets ETF to the Sun Life State Street equivalent funds
  • These changes may result in a capital gain or loss, as SLGI sells units of iShares ETFs and buys units of the State Street equivalent funds.
  • SLGI expects these changes will have minimal tax implications. This is because the Granite TDFs and Granite TRFs only hold the iShares ETFs for a short period (from August 1, 2025). In addition, the allocations to these ETFs are small (1.4% to 5.2% in Granite TDFs, 1% to 2.4% in Granite TRFs as of December 31, 2025).

Remember that all trading activities in the Granite Target Date and Target Risk funds are combined throughout the year in underlying funds, including the ones listed above.

Sun Life will provide the applicable tax slip(s) in early 2027. 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.

About SSgA

SSgA is one of the world’s largest institutional index managers with decades of experience managing over US $5.66 Trillion in AUM (as of December 31, 2025). The firm brings proven expertise in scale, disciplined portfolio construction, and strong risk controls.