After a seven-year hiatus, Sun Life has re-entered the ETF business in Canada with the launch of three ETF series of existing mutual funds — and it’s hinting at more to come.
Its investment fund division, SLGI Asset Management Inc. (Sun Life Global Investments), introduced the Sun Life Core Advantage Credit Private Pool (TSX: SLCA), Sun Life MFS Global Core Plus Bond Fund (TSX: SLGC) and Sun Life Crescent Specialty Credit Private Pool (TSX: SLSC) on Monday.
This comes after Sun Life decided to close the two ETFs it inherited as part of its purchase of Excel Funds Management Inc. and Excel Investment Counsel Inc. in 2018, just a couple of months after the deal closed. At the time, a Sun Life executive said the firm was assessing the ETF market and its clients’ needs as it explored “the best potential approach for entering the ETF space.”
Fast forward to today, and Sun Life Global Investments president Oricia Smith said it’s an opportune time to re-enter the ETF industry, given the growing demand for ETFs in Canada, which are now sitting at more than $600 billion in assets under management (AUM).
The new ETF series were born out of specific advisor demand for actively managed fixed-income products, said Smith, who is also senior vice-president of investment solutions for Sun Life Canada, in an interview.
She noted that Sun Life Global Investments is one of the only providers in Canada to give investors exposure to private credit through an ETF with SLCA, and one of few to give investors exposure to narrowly syndicated credit in an ETF with SLSC.
Those funds are sub-advised by Sun Life Capital Management (Canada) Inc. and Crescent Capital Group, respectively. SLCA has a 0.43% management fee, while SLSC has a 0.7% management fee.
“We’ve seen demand, not only for active fixed-income building blocks, but also alternative asset classes,” Smith said.
“And so, we’re listening and meeting some of that demand.”
Meanwhile, SLGC is sub-advised by MFS Investment Management and it invests in investment-grade and non-investment-grade debt securities of issuers located throughout the world. It’s hedged to the Canadian dollar and has a 0.43% management fee.
The launches, which come on the heels of Sun Life Global Investments marking its 15th anniversary, are part of the investment fund manager’s mission to cater to the needs of various advisors and investors.
“We have a very broad product offering, and have the capabilities to create different vehicles, both in the asset management space, as well as ‘insured wealth’ — seg funds, annuities,” Smith said.
“And so, as we continue to expand our product lineup, we’re looking to offer strategies that make sense in different vehicles and being vehicle agnostic as much as possible.”
While she wouldn’t comment on upcoming product launches, Smith said Sun Life Global Investments “definitely will look to continue to evolve [its] shelf.”
“So, we’ll consider both ETF series of existing funds as well as standalone ETFs in the future, plus other vehicles,” she added.
Sun Life Global Investments currently has $61 billion in AUM, while Sun Life’s total AUM is $1.5 trillion.