Sun CI Linked Deposit Notes, Protection Plus Class, Series 3 Available January 15 – March 2, 2007...

Sun CI Linked Deposit Notes, Protection Plus Class, Series 3

Available January 15 – March 2, 2007

(JHN 226)

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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 3 product. © Sun Life Financial Trust Inc., 2007.

TM Harbour Advisors, CI Investments and the CI Investments design are trademarks of CI Investments Inc.


Performance is linked to a globally diversified Fund Portfolio of popular CI Mutual Funds with proven managers

• CI Global High Dividend Advantage Fund• Harbour Growth & Income Fund• Signature Dividend Fund

Dynamic Asset Allocation Strategy • Potential to gain 200% exposure to a Fund Portfolio of three popular Canadian mutual funds

managed by CI Investments• Hedge against losses when performance of the Fund Portfolio is negative

Principal Protection at Maturity• 100% protection of the initial investment at maturity (5-year term), regardless of the performance

of the Fund Portfolio

Tax Efficient• Interest income will not be taxed until it is paid at maturity, providing the potential for tax-

deferred growth• Potential capital gains/loss treatment if Notes are sold prior to maturity. (BMO Capital Markets,

subject to normal conditions, will use reasonable efforts to maintain a secondary market for the Notes.)

Key Features


Globally diversified portfolio providing the potential for growth with low volatility.


Historical data are based solely on the Funds in the underlying Fund Portfolio and are not a representation of backtested historical performance of the Note. The performance data provided do not reflect the fees nor the expenses of the Note Program, do not take into account the dynamic asset allocation of the Note Program and do not include the performance of the Notional Bond Portfolio. The past performance of the Funds may not be repeated and may not be indicative of the future performance of the Funds or the Note.

Fund portfolio provides potential for growth with low volatility.

For all illustrations of performance related to the Fund Portfolio, the Citigroup BMI World Total Return Index C$ was used as a proxy for CI Global High Dividend Advantage Fund prior to January 31, 2006. Therefore, the performance shown does not represent the actual historical performance of the Fund Portfolio, nor does it represent what the actual historical performance of the Fund Portfolio would have been if CI Global High Dividend Advantage Fund had existed during the entire performance measurement period shown.


For clients who:• Want potentially higher returns than fixed-income securities.

• Are concerned about short-term volatility and are looking for more stable returns.

• Want to lock-in current gains, but still participate in future growth opportunities of a globally diversified portfolio.

• Are looking for an alternative to income trusts.

• Want principal protection and are willing to accept possibility of no return in order to access upside potential of equity investments.

Continued low interest rate environment:

Recent increases have not been significant, although it has 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 locking in gains.

An Effective Investment Alternative

Provide your clients with 100% principal protection at maturity plus exposure to dividend investing.


Building your Business• Revenue • Investment solutions

– Equity exposure– Enhanced yield and growth potential – Tax efficiency– High net worth applications– Asset gathering campaigns

• Prospecting tool• GIC / fixed income alternative• Hedging tool


Advisor Tools

• Advisor Guide• PowerPoint Presentation • Admat• Prospecting Letter• Client Flyer• Guide to Principal Protected Notes (available only on ABC)


How does the Dynamic Asset Allocation work?

• 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 rebalanced in accordance to a pre-determined asset allocation formula.• The leveraging or de-leveraging of the Fund Portfolio will occur based on the Distance between the

current values of the Fund Portfolio and the present value of a notional bond tied to the Maturity Date. • The dynamic asset allocation strategy provides 100% initial Basket exposure (with potential for 200%

exposure) to the Fund Portfolio and 100% principal protection ($100 per note) at maturity.

Fund Portfolio

Reallocation according to a pre-determined allocation grid

Net proceeds of $97 is anticipated to be fully invested into the Fund Portfolio.

Notional Bond Portfolio

Initial Purchase $100


Dynamic Asset Allocation Strategy“Distance” is the benchmark for rebalancing

MaturityTime

Value

Principal Repayment($100)

Basket Value

Price of theCoupon Bond

Dele

vera

ging

Leve

ragi

ngDistance

Initial Investment($97)

Rele

vera

ging


How do Sun CI Deposit Notes determine exposure?

Dt = % difference between the current values of the Fund Portfolio and

the present value of a notional bond tied to the Maturity Date

- The weighting of the Fund Portfolio will be monitored daily and adjusted accordingly. - Added exposure to the Fund Portfolio is achieved by borrowing through a low cost loan facility (the cost of leverage is one-month BA’s plus 0.25% p.a.).- Minimum 20% exposure to the Fund Portfolio will be maintained in all scenarios.

Distance Weighting

Dt > 60% 200%

50% <Dt=< 60% 180%

40% <Dt=< 50% 160%

30% <Dt=< 40% 140%

18% <Dt=< 30% 120%

10% <Dt=< 18% 100%

7% <Dt=< 10% 80%

5% <Dt=< 7% 60%

3% <Dt=< 5% 40%

2% <Dt=< 3% 20%

Dt=< 2% 0%

The greater the Distance (Dt), the greater the allocation to the Fund Portfolio, up to a possible 200%.


If the Distance falls to 2.0% or below

• 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%

• Allocations to the Fund Portfolio will occur and no options will be included.

Minimum Exposure to the Fund Portfolio


Example of Positive Performance

This example assumes the MER of the Underlying Funds is 2.02%, a constant borrowing rate of 3.95%, and a constant yield of 4.65% on the fund over the 5-year term of the Deposit Notes.

This example does not represent the Series 3 product and has been provided for illustrative purposes only.

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

200.00

0 1 2 3 4 5

time (years)

Do

llars

per

$10

0 N

ote

NAV

Fund Price Performance

Coupon Bond Price

Loan

Basket value: 161.79Fund value: 146.55Outperformance: 10.4%


Example of Protection Event

This example assumes the MER of the Underlying Funds is 2.02%, a constant borrowing rate of 3.95%, and a constant yield of 4.65% on the fund over the 5-year term of the Deposit Notes.

This example does not represent the Series 3 product and has been provided for illustrative purposes only.

0.00

20.00

40.00

60.00

80.00

100.00

120.00

0 1 2 3 4 5

time (years)

Dol

lars

per

$10

0 N

ote

NAV

Fund Price PerformanceCoupon Bond Price

Basket value: 102.08Fund value: 93.75Outperformance: 8.9%


100% Reinvestment of Fund Distributions

• 100% of any distributions payable by the Fund Portfolio will be reinvested in additional units of the Basket.

Tax Efficient

• Interest income will 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.

• Hedge against losses when performance of the Fund Portfolio is negative.

Enhanced Performance

• Reinvestment of fund distributions should increase Distance, providing the opportunity for increased exposure to the Fund Portfolio.

Benefits of Reinvestment of Fund Distributions


Benefits in Any Market Scenario

• Where the Fund Portfolio performs well, additional exposure to the Fund Portfolio may be achieved through leverage generating enhanced returns.

• 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 potential growth 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% principal protection at maturity regardless of the performance of the Fund Portfolio.


Summary of Terms

Issuer Sun Life Financial Trust Inc.

Issue Date March 23, 2007

Maturity Date March 23, 2012 (Term to Maturity: Five years)

Issue Size Subscription Price: $100 per Deposit NoteMinimum Purchase: $2,000 (20 Deposit Notes)

Maximum Issue $30 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.

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, 2007.

Secondary Market BMO Capital Markets, 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.

Selling period Jan 15 – March 2nd

THANK YOU

For more information please visit:

www.ci.com/depositnotesor

Contact your CI Sales Team

Sun CI Linked Deposit Notes, Protection Plus Class, Series 3 Available January 15 – March 2, 2007...

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Transcript of Sun CI Linked Deposit Notes, Protection Plus Class, Series 3 Available January 15 – March 2, 2007...