CIO explains rationale behind fresh range of ETF mutual funds
The desire to provide clients with exposure to ETFs but with the safety net of being actively managed inspired Sun Life Global Investment’s new range of mutual funds.
The company today launched its Sun Life Tactical ETF Portfolios, a suite of five funds that invest in ETFs and other mutual funds and are management by its portfolio management team.
The funds are the Sun Life Tactical Fixed Income ETF Portfolio, the Sun Life Tactical Conservative ETF, the Sun Life Tactical Balanced ETF Portfolio, the Sun Life Tactical Growth ETF Portfolio and the Sun Life Tactical Equity ETF Portfolio.
The firm said the funds are designed for investors who want exposure to ETFs within the structure of an actively managed mutual fund, offering clients “value, access and strategic and tactical asset allocation with broad diversification”.
Sadiq Adatia, CIO at Sun Life Global Investment, said these options provide a strategic asset mix for the client that can be adjusted upon changing economic conditions.
He told WP: “It’s really important. We think actively paying attention to the mix and the different types of ETFs inside the portfolio is a really good risk management tool because as we see markets and economic climate change, portfolios should be adjusted. A portfolio that may originally have started off at 60% equities and 40% bonds doesn’t carry the same risk profile year over year as valuations change.
“So it’s very important to be actively adjusting that depending on what we see in the economic conditions out there as well as the valuations, the yields and interest rates and inflation – all those things are important elements in making sure the portfolio remains optimized.
“In the last few weeks we’ve seen the markets sell off and people have realized that just owning the full market for an ETF gives you great exposure on the upside but also gives you exposure on the downside. If you are able to adjust what you own given the conditions, whether it’s through the asset exchanges or different types of ETFs, then that’s valuable in this environment.”
Sun Life Tactical Fixed Income ETF Portfolio
The fund’s investment objective is to seek income, by investing primarily in fixed-income exchange traded funds and other fixed-income mutual funds.
Sun Life Tactical Conservative ETF Portfolio
The fund’s investment objective is to seek income and capital appreciation, with a bias towards income, by investing primarily in a mix of fixed-income and equity exchange-traded funds and other mutual funds, with a bias toward fixed-income exchange-traded funds and other mutual funds.
Sun Life Tactical Balanced ETF Portfolio
The fund’s investment objective is to seek capital appreciation and income, with a small bias towards capital appreciation, by investing primarily in a mix of equity and fixed-income exchange-traded funds and other mutual funds.
Sun Life Tactical Growth ETF Portfolio
The fund’s investment objective is to seek capital appreciation by investing primarily in equity exchange-traded funds and other equity mutual funds, and, to a lesser extent, fixed-income exchange-traded funds and other fixed-income mutual funds.