Sun CI Linked Deposit Notes,
Protection Plus Class, Series 1
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The information contained herein is confidential and for advisor use only. The information contained herein is not to be
reproduced or distributed to the public or the press.
This presentation is not an offer or a solicitation of an offer or a recommendation to buy or sell any securities or financial
instruments, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is
intended as a summary only and is qualified entirely by, and should be read in conjunction with, the more detailed information
appearing in the Information Statement. Details regarding the dynamic allocation strategy, calculation and payment of
interest,, the notional portfolio, repayment of principal at maturity and certain risk factors are contained in the Information
Statement. Any examples in this presentation are included for illustrative purposes only and are not intended to predict actual
results, which may differ substantially from those reflected herein.
Sun Life Financial Trust Inc., a member of the Sun Life Financial group of companies, is the sole issuer of the Sun CI Linked
Deposit Notes, Protection Plus Class, Series 1 product. © Sun Life Financial Trust Inc., 2006.
®Harbour Fund is a registered trademark of CI Investments Inc. ™CI, CI Investments, Signature Advisors, Signature and the
CI Investments design are trademarks of CI Investments Inc.
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An effective investment alternative
Continued low interest rate environment:
Recent increases have not been significant although it’s translated into losses for bond
portfolios.
Strong Canadian Equity market:
One of the top performing markets over the past three years.
Forecasters recommend rebalancing holdings and/or locking in gains.
If your clients
•
Want principal protection and are willing to accept possibility of no return to access
upside potential of equity investments.
•
Want to make the most of upcoming investment opportunities in the Canadian market,
•
Are concerned about market volatility and want to lock-in the gains made in the
Canadian market
•
Have a conservative profile or are considering switching out of low-yield fixed income
products.
Consider
Sun CI Linked Deposit Notes, Protection Plus Class, Series 1
Providing your clients with increased
potential
for higher
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Sun CI Linked Deposit Notes, Protection Plus Class, Series 1
Key Features
Performance linked to a diversified Fund Portfolio that has historically offered
stability:
Signature High Income Fund
Signature Dividend Fund
Harbour Fund
Dynamic Asset Allocation Strategy
• Potential for 200% exposure to the underlying Fund Portfolio when the performance
is positive.
• Hedge against losses when performance of the underlying Fund Portfolio is negative
100% Protection of the initial investment at maturity regardless of the performance of
the Fund Portfolio.
Tax Efficient
• Interest income will not be taxed until it is paid at maturity.
• Potential capital gains/loss treatment if Notes are sold prior to maturity. BMO Nesbitt
Burns will provide a daily secondary market for the Notes. Notes sold prior to
maturity will be subject to an early trading charge, deductible from the proceeds of
the Notes, in the first 720 days from issuance.
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A Diversified Fund Portfolio for stability and steady growth
1/3 Signature High Income, 1/3 Signature Dividend, 1/3 Harbour
Growth of $10,000 Investment
5 Years Ending March 2006
Sector Breakdown - March 2006
Business Services,
4.3%
Utilities, 1.2%
$19,000
Portfolio
$17,000
Other, 0.0%
$17,773
Benchmark
5-yr GIC
Cons Goods, 2.5%
M edia, 1.6%
Cash, 11.0%
Cons Services, 2.4%
$15,845
Industrial
Materials,
10.2%
$15,000
Energy, 19.5%
$13,000
$12,272
Health Care, 0.2%
$11,000
Telecom, 1.8%
Financials,
21.3%
Software, 0.2%
Backtested Performance
As at March 31, 2006
Mar-06
Sep-05
Mar-05
Sep-04
Mar-04
Sep-03
Mar-03
Sep-02
Mar-02
Sep-01
Mar-01
$9,000
Standard
Deviation
Return
1y
3y
Hardware, 1.0%
5y
Sharpe Ratio
3y
5y
3y
5y
Upside Capture
3y
5y
Downside
Capture
3y
5y
75%
Portfolio
19.0%
18.6%
12.2%
6.2%
6.4%
2.36
1.31
110%
107%
95%
Benchmark*
17.7%
16.8%
9.6%
5.6%
6.4%
2.33
0.90
100%
100%
100%
Sources: CI Investments, Globe Hysales, Bank of Canada
100%
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*60%TSX / 40%SC Universe Bond Index
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How Does the Dynamic Asset Allocation Work?
Constant Proportion Portfolio Insurance (CPPI) Structure
Initial Purchase
$100
Fund
Portfolio
Bond
Portfolio
Net proceeds of $97
is anticipated to be
fully invested into
the Fund Portfolio.
Reallocation
according to the
pre-determined
allocation grid
• On the Issue Date, 100% of the net proceeds of the Basket will be allocated to the Fund Portfolio.
• The Deposit Notes will be dynamically allocated between the Fund Portfolio and a Notional Bond
Portfolio (and the Option if applicable). It will be rebalanced from time to time in accordance to a predetermined asset allocation formula.
• The leveraging or de-leveraging of the Fund Portfolio will occur based on the Distance between the
basket NAV and the price of the coupon bond.
• The dynamic asset allocation strategy provides 100% initial exposure (with potential for 200% exposure)
to the Fund Portfolio and 100% principal protection ($100 per note) at maturity.
• A reallocation will occur after a significant change in Distance has taken place.
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“Distance” is the Benchmark for Rebalancing
Value
Dynamic Asset Allocation Strategy
Basket Value
Distance
Releveraging
Deleveraging
Price of the
Coupon Bond
Principal
Repayment
($100)
Leveraging
Initial
Investment
($97)
Time
Maturity
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How do Sun CI Deposit Notes determine exposure?
The greater the distance, the greater the allocation to the Fund Portfolio, up to a possible 200%.
Distance
Weighting
Dt > 35%
200%
30% <Dt=< 35%
170%
25% <Dt=< 30%
140%
20% <Dt=< 25%
120%
10% <Dt=< 20%
100%
8% <Dt=< 10%
80%
7% <Dt=< 8%
70%
6% <Dt=< 7%
60%
5% <Dt=< 6%
50%
4% <Dt=< 5%
40%
3% <Dt=< 4%
30%
2% <Dt=< 3%
Dt=< 2%
20%
0%
Dt = % Difference between the Basket NAV
and theoretical 5-year, Coupon Bond Value
The weighting of the Fund Portfolio will be monitored daily and adjusted accordingly.
Any added exposure to the Fund Portfolio is achieved by borrowing funds through a low cost loan
facility (the cost of leverage is one-month BA’s plus 0.25% p.a.)
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Benefits of Increased Exposure
CI’s CPPI Notes
Current Exposure
Enhanced Yield Series 1 issued 3/25/05
100%
Enhanced Yield Series 2 issued 5/11/05
150%
Enhanced Yield Series 3 issued 7/21/05
130%
Enhanced Series 4 / ROC Series 1 issued 9/21/05
110%
CIBC CI MAX Deposit Notes Series 1 issued 11/16/05
105%
-Increased monthly distribution potential. At 150% exposure,
Enhanced Yield Series 2 will REINVEST & DISTRIBUTE AN
ADDITIONAL 50% MORE than the underlying fund on a go-forward
basis.
- Greater exposure provides added leverage to maximize total return
potential while principal protection returns original capital even with
negative performance.
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Source: BMO & CIBC Calculation Agents As of April 28,2006
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Protective Benefits in October
Outperformance vs.
Funds (October 2005)
CI’s CPPI Notes
Enhanced Yield Series 1 issued 3/25/05
+ 1.1%
Enhanced Yield Series 2 issued 5/11/05
+ 0.5%
Enhanced Yield Series 3 issued 7/21/05
+ 0.6%
Enhanced Series 4 / ROC Series 1
issued 9/21/05
+ 2.6%
The trust market lost over 10% in October following the Minister of Finance’s
suspension of advanced tax rulings. The Notes’ defensive positioning in October
allowed them to outperform the market and underlying funds as the reduced
exposure limited downside volatility.
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Source: Globeinvestor.com, CI Investments
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Benefits of Reinvestment of Fund Distributions
•
100% Reinvestment of Fund Distributions – 100% of any
distributions that may be payable by the Fund Portfolio will be
reinvested in additional Units in the Basket.
•
Tax Efficient – Interest income should not be taxed until it is paid at
maturity, providing the potential for tax deferred growth. Potential
capital gains/loss treatment if Deposit Notes sold prior to maturity.
•
Enhanced Performance – Reinvestment of Fund Distributions should
increase Distance, providing the opportunity for increased exposure to
the Fund Portfolio.
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Reinvestment feature: Example of Positive Performance
200.00
180.00
Fund Price Performance
140.00
Dollars per $100 Note
Basket Value: 161.79
Fund Value:
146.55
Outperformance: 10.4%
NAV
160.00
120.00
100.00
Coupon Bond Price
80.00
60.00
Loan
40.00
20.00
0.00
0
1
2
3
4
5
time (years)
This example assumes MER of the Fund Portfolio is 1.99%, a constant borrowing rate of 3.95%, and a constant
yield on the Fund of 4.65% over the five-year term of the Deposit Notes.
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Reinvestment Feature: Enhancement
If the Distance "Dt" falls to 2.0% or below, then the assets would
become fully allocated to Bonds and Options will track 20% of the
performance of the underlying Fund Portfolio as if 100% of the
distributions on Units are reinvested in the Basket. If the Distance
recovers (above 2.0%), then allocations to the Fund Portfolio will
occur and no Options will be included.
At current rates, The initial Dt is approximately 13.2%, which
allocates 100% to the underlying portfolio
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Reinvestment Feature: Example of Protection Event
120.00
Basket Value: 102.08
Fund Value:
93.75
Outperformance: 8.9%
NAV
100.00
Fund Price Performance
Coupon Bond Price
Dollars per $100 Note
80.00
60.00
40.00
20.00
0.00
0
1
2
3
4
5
time (years)
This example assumes MER of the Fund Portfolio is 1.99%, a constant borrowing rate of 3.95%, and a constant
yield on the Fund of 4.65% over the five-year term of the Deposit Notes.
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Fees and Expenses of the Sun CI Linked Deposit
Notes Protection Plus Class, Series 1
Maximum fee of 2.95%
100%+ Allocated to Fund Portfolio
100% Allocated to Notional Bond Portfolio
Total Fees on FP
=
2.95%
Total Fees on NBP
=
0.95%
Rebalancing between the Fund Portfolio and the NBP will determine fee charges.
Maximum fee does not include any fees/costs associated with leveraging. The initial basket value
and variable return will be based on $97 per note.
An Early Trading Charge will apply to secondary market redemption orders placed within the first 720
days from issuance determined as follows:
If redeemed within
1 to 180 days
181 to 360 days
361 to 540
541 to 720
4.00%
3.00%
2.00%
1.00%
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Benefits of the Sun CI Linked Deposit Notes Protection
Plus Class Structure in any market scenario

In market conditions where the Fund Portfolio performs well, additional
exposure to the Fund Portfolio may be achieved through leverage
generating enhanced returns.

In market conditions where the Fund Portfolio performs negatively,
reduced exposure to the Fund Portfolio may dampen losses in an effort to
allow participation in any subsequent recovery.

In a rising interest rate environment, continued exposure to the Fund
Portfolio increases growth potential to keep pace with higher interest
rates.

In a declining interest rate environment, reinvestment of all distributions
will help preserve exposure to the Fund Portfolio.

100% capital protection at maturity regardless of the performance of
the Fund Portfolio.
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Summary of Terms
Issuer
Sun Life Financial Trust Inc.
Issue Date
July 26, 2006
Maturity Date
July 27, 2011 (Term to Maturity: Five years)
Issue Size
Subscription Price: $100 per Deposit Note
Minimum Purchase: $2,000 (20 Deposit Notes)
Maximum Issue
$25 Million. Sun Life Financial Trust Inc. reserves the right to increase amount.
Fees & Expenses
Blended rate equal to 2.95% of value of units of Fund Portfolio and 0.95% of the face amount of the
Notional Bond Portfolio. Interest on loan facility of BA’s, plus 25 bps per annum. All fees and expenses
calculated daily and payable monthly in arrears.
Compensation
3.0% compensation paid up front, 0.50% annual trailer / paid quarterly.
Eligibility
100% eligible for RRSP, Spousal RRSP, Open and LIRA/Locked-in RSP accounts. For RSP accounts,
BMO Trust Company will act as trustee. Note: The product cannot be purchased for an RRSP account
by clients who turn age 65 or older by December 31, 2006.
Secondary Market
BMO Nesbitt Burns, subject to normal conditions, will use reasonable efforts to maintain a secondary
market for the Notes. Notes sold in the secondary market will be subject to an early trading charge,
deductible from the proceeds of the Notes, for the first 720 days from issuance.
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Advisor Tools
• Conference Call replay
(with synchronized PPT)
•
•
•
•
•
•
Road Map
Advisor Guide
PowerPoint Presentation
Client Flyer
Prospecting Letter
Admat
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THANK YOU
For more information please visit:
www.ci.com/depositnotes
or
Contact your CI Sales Team
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