INVESTING IN THE CURRENT MARKET ENVIRONMENT CARL S. BANG PRESIDENT SUN LIFE INVESTMENT MANAGEMENT INC.

Transcription

1 INVESTING IN THE CURRENT MARKET ENVIRONMENT CARL S. BANG PRESIDENT SUN LIFE INVESTMENT MANAGEMENT INC.

2 SUN LIFE INVESTMENT MANAGEMENT I N V E S T M E N T M A N A G E M E N T SUN LIFE INVESTMENT MANAGEMENT LIABILITY-DRIVEN INVESTING AND ALTERNATIVE YIELD STRATEGIES S U N L I F E I N V E S T M E N T O P E R A T I O N S S U N L I F E I N V E S T M E N T M G M T I N C. R Y A N L A B S A S S E T M A N A G E M E N T P R I M E A D V I S O R S, I N C. B E N T A L L K E N N E D Y Manages Sun Life Assurance Company of Canada s insurance assets Canadian third-party asset management business launched in 2014 Established U.S. asset management firm. Acquired April 2, 2015 U.S. insurance asset management firm. Acquisition expected to close in Q North American real estate investment management firm. Acquisition expected to close in Q More than 200 investment professionals worldwide Offers private asset class funds and liability driven investing strategies Offers liability driven investing and total return fixed income strategies Offers customized fixed income portfolios Offers investment advisory and property management services AUM: $134 billion AUM: $9 billion AUM: $7 billion AUM: $16 billion AUM: $28 billion AUM figures in C$ at September 30, 2015

3 SUN LIFE INVESTMENT MANAGEMENT INC. E N H A N C E Y I E L D R E D U C E V O L AT I L I T Y T R A N S F E R R I S K Sun Life Canadian Real Estate Fund Sun Life Canadian Commercial Mortgage Fund Sun Life Private Fixed Income Plus Fund Sun Life Long Term Private Fixed Income Plus Fund Liability Driven Investing Strategies Sun Life Investment Management Inc. is a Canadian registered portfolio manager, investment fund manager, exempt market dealer in all provinces and territories, and is the manager of the PRIVATE ASSET CLASS POOLED FUNDS AND LIABILITY DRIVEN INVESTMENTS Sun Life Investment Management s CURRENT AUM AS OF SEPTEMBER 30, 2015 IS OVER $134 BILLION with over $9 billion representing Sun Life Investment Management Inc. 3

4 TOP 3 CONCERNS 78% 67% 40% interest rate levels market volatility under-performing equity markets

5 THE CHALLENGE Markets are down, rates remain low: how can plans generate the fixed income yields they need to sustain plan funding levels going forward?

6 THE OPTIONS OPTION Extending the term of your holdings Invest outside of Canada Invest in high yield bonds RISK Duration Foreign exchange Credit risk A new risk: LIQUIDITY

7 PUBLIC CORPORATE BONDS THE ILLUSION OF LIQUIDITY Plans need two buckets for public fixed income Government bonds Non-government bonds

8 PRIVATE FIXED INCOME THE ILLIQUIDITY PREMIUM Trade some LIQUIDITY for YIELD AND LOWER DIVERSIFICATION RISKS all without adding DURATION or CREDIT RISK.

9 Spread to comparable public bonds, credit losses and fee income (bps) PRIVATE FIXED INCOME Sample account performance 300 Overall credit spread Overall credit loss Transaction fees earned Performance for Sun Life Financial s General Account private fixed income portfolio; Sources are Bank of Canada, Sun Life Financial. Spreads are dollar weighted. Past performance does not guarantee future results, which may vary. Credit losses are dollar weighted and basis points are estimated over the companion year s average asset base. The returns presented are not of the Sun Life Private Fixed Income Plus Fund. These results are presented for illustrative purposes only and do not represent that which may be achieved by the Fund. All private bonds are managed by the private fixed Income team for Sun Life Financial s General Account.

10 DISCLAIMERS & DISCLOSURES Sun Life Investment Management is the brand name under which Sun Life Investment Management Inc. and the investment operations of Sun Life Assurance Company of Canada operate. Pooled funds, separately managed accounts and other securities-based investment advisory services are provided through Sun Life Investment Management Inc., with support from the investment operations of Sun Life Assurance Company of Canada. Sun Life Investment Management Inc. is a Canadian registered portfolio manager, investment fund manager, exempt market dealer and commodity trading manager and is the manager of the Sun Life Private Fixed Income Plus Fund, Sun Life Canadian Commercial Mortgage Fund and Sun Life Canadian Real Estate Fund described in this presentation. This presentation is intended for Canadian institutional investors only. It is not for retail use or distribution to individual investors. The information in this presentation is not intended to provide specific financial, tax, investment, insurance, legal or accounting advice and should not be relied upon and does not constitute a specific offer to buy and/or sell securities, insurance or investment services. Investors should consult with their professional advisors before acting upon any information contained in this proposal. All opinions and commentary are subject to change without notice and are provided in good faith without legal responsibility. Unless otherwise stated, all figures and estimates provided have been sourced internally and are current as at the date of the presentation unless separately stated. The 2015 Sun Life Investment Management Defined Benefits Plan Sponsor Executives study was conducted by Rogers Customer Insights, January 19 March 6 and March 10 20, The 100 self-selected respondents come from Rogers Canadian Institutional Investment Network database and include persons serving in executive or management roles at the pension plans. Margin of error +/-8.7. No part of this material may, without Sun Life Investment Management Inc. s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient. 2015, Sun Life Investment Management Inc.