Monday, April 16, 2007

Desjardins' Positive on Sun Life's New Product

Financial Post, Jonathan Ratner, 16 April 2007

Sun Life Financial Inc.’s move to launch a guaranteed minimum withdrawal benefit (GMWB) product in Canada – a retirement income product that is similar to Manulife Financial Corp.’s IncomePlus product launched last fall, is a positive development for Sun Life, according to Michael Goldberg.

Manulife had $1-billion in sales for its product in the first 19 weeks, the Desjardins Securities analyst said in a note to clients, adding that both companies are using their experience in the U.S. “in pricing and hedging a GMWB product as a foundation in Canada.”

“While there are some differences between the Sun and Manulife products, we believe that they expand the market for this product overall, much more than competing with one another,” Mr. Goldberg said.

Mr. Goldberg has a “buy” rating on Sun Life shares and $56 price targets, which represents upside of roughly 6%.
Financial Post, Jonathan Chevreau, 17 April 2007

Sun Life Financial and C.I. Investments Inc. yesterday unveiled a new variable annuity retirement offering dubbed SunWise Elite Plus. Like Manulife's earlier Income Plus, SunWise offers an optional insurance rider of a GMWB, or Guaranteed Minimum Withdrawal Benefit. It provides predictable guaranteed income while still exposing up to 90% of the portfolio to growth through various C.I. equity mutual funds. If stock markets do well, gains can be locked in through automatic resets every three years. Investors receive a 5% bonus for every year they do not make withdrawals in the first 10 years after the initial deposit to the GMWB rider. There is also an optional 4% Annual Automatic Death Benefit Reset rider.