SEI is increasing diversification in a selection of its asset allocation funds.

SEI made asset allocation changes to four funds while striving to maintain the risk profile of each fund.

In equities the following themes guided our changes:

• Reduce home country bias by lowering allocations to Canadian equities in favour of foreign equities—particularly U.S. equities.
  • The S&P/TSX Composite Index is comprised of approximately 239 constituents with the largest accounting for 6.1% and the top-10 representing 36.1% of the index as of 4/29/22 (Source S&P Dow Jones Indices).
  • By comparison, the MSCI ACWI Index has about 2,937 constituents with the largest being 4.25% and the top-10 15.92% of the index as of 4/29/22 (Source MSCI).
• Domestic smaller companies were removed from some portfolios as home country bias reduction would have moved some allocations below the minimum 3%.
  • Where possible, U.S. smaller companies were increased to help offset the loss of domestic small caps.
• Managed volatility remains an important allocation—although there were some reductions, the allocation largely remained the same.

For fixed income:

• We continue to view U.S. high-yield bonds as a hybrid equity/fixed income allocation.
• Canadian fixed income remains the best diversifier for portfolios with primarily equity risk.
  • Given this view, additions to fixed income will be heavily weighted towards Canadian fixed income for its diversification properties.

Background

SEI Investments Company (SEI) has a dedicated Advice Group (Advice) that researches and regularly reviews capital-market assumptions (CMAs) based on the team’s macroeconomic research. Advice builds SEI’s asset allocation models and strategies. As it reviews asset classes and updates long-term risk and return characteristics, changes are made to the selection and allocation of SEI’s models and strategies to improve efficiency. SEI offers a variety of asset allocation funds spanning a broad risk-return spectrum, allowing investors to participate in different levels of returns commensurate with different levels of risk. SEI selects and allocates to several asset classes in its Funds, aiming to build diversified portfolios that efficiently generate returns within a specific risk tolerance. SEI develops proprietary CMAs for its asset classes based on quantitative analysis and Advice’s qualitative judgment. Advice uses various historical and forward-looking techniques in developing its CMAs and then uses its CMAs to determine asset allocation within SEI’s models and strategies.

Index Definitions

The MSCI ACWI Index is a market-capitalization-weighted index composed of over 2,000 companies, and is representative of the market structure of 48 developed and emerging-market countries in North and South America, Europe, Africa and the Pacific Rim. The index is calculated with net dividends reinvested in U.S. dollars.

The S&P/TSX Composite is the headline index for the Canadian equity market. It is the broadest in the S&P/TSX family and is the basis for multiple sub-indices including but not limited to equity indices, Income Trust Indices, Capped Indices, GICS Indices and market cap based indices.

 

Important Information

SEI Investments Canada Company, a wholly owned subsidiary of SEI Investments Company, is the Manager of the SEI Funds in Canada. The percentage weightings of the Underlying Funds may be changed from time to time at the Manager’s discretion. The portfolio managers or the allocations of assets to a particular portfolio manager within a Fund are subject to change from time to time at the Manager’s discretion.

The information contained herein is for general information purposes only and is not intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment. You should not act or rely on the information contained herein without obtaining specific legal, tax, accounting and investment advice from an investment professional. This information should not be relied upon by the reader as research or investment advice regarding the Funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. There is no assurance as of the date of this material that the securities mentioned remain in or out of the Funds.

This material may contain "forward-looking information" ("FLI") as such term is defined under applicable Canadian securities laws. FLI is disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action. FLI is subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from expectations as expressed or implied in this material. FLI reflects current expectations with respect to current events and is not a guarantee of future performance. Any FLI that may be included or incorporated by reference in this material is presented solely for the purpose of conveying current anticipated expectations and may not be appropriate for any other purposes.

There are risks involved with investing, including loss of principal. Diversification may not protect against market risk. There may be other holdings which are not discussed that may have additional specific risks. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavourable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Bonds and bond funds will decrease in value as interest rates rise.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus of the SEI Funds and the Underlying before investing. Mutual fund securities are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer, they are not guaranteed. There can be no assurances that a money market fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Mutual fund are not guaranteed, their values change frequently and past performance may not be repeated.