Gerald Allaye-Chan Sun Life Financial Inc SLF-T COMMENT May 29, 2009

IFC did well this year, but SLF has done better. MFC was hit by variable annuity issues. SLF is stabler. Insurers were undercapitalized, but have seen more capital since Covid. Interest rates in US and Canada have bottomed, he thinks.

All the insurance names, both in Canada and the US, continue to work. If interest rates do, in fact, go higher, that will only be beneficial for lifecos and other insurers. The chart looks fantastic. Good run, so there is some weakening in the intermediate term.

If a long-term holding, best thing you can do is sit on your hands and do nothing except participate in the DRIP program. Especially if he's right on the broader call of rates being 8-10% in the secular bear market of 2030-40, should be a big tailwind for insurers.

A lifeco, but also offers investment products. Solid, dependable. Never very exciting growth, well capitalized, prudent capital allocator. Dividend well covered and should grow. Asian angle gives it a bit of growth. Yield is ~4%.

He also owns MFC, and you can give that one a look. Similar business to SLF.

MFC has a slightly better dividend than SLF right now, though he likes both names. MFC is also slightly cheaper than SLF, so that's why MFC is in his portfolio.

Was a little turbulent after its earnings miss, but it remains solid. Don't sell. It will return to and exceed previous highs.

Benefits from demographics and growth engine in Asia. Recent results not that strong; dig more into those before you jump in. Good, long-term business.

Some weakness in recent results. Sometimes when a stock's run up, and results come in lighter than expected, stock sells off on a trade. Fundamentals haven't shifted significantly. Relatively stable earnings, so it's good for income. Asset management divisions can be lumpy with interest rate moves. Reasonable investment for income with some growth.

She owns CB.

Best-performing insurer through the financial crisis. Largest foreign insurer in India, so not just in Canada. Great job in life insurance and asset management. Conservatively run. Steady dividend grower. Looking for 7-10% earnings growth over time. Core holding for him.

As a value investor, not growth, he didn't like SLF when markets were ripping higher late last year. However, if this falls down to its trend line of $70, he would buy.

Over time it should get back to $88. Life insurance companies have less exposure to tariffs and recession than banks. Banks are more vulnerable to rising unemployment. Near term, life insurance companies are better buys than banks but longer term banks are better.