The Sun Life Prosperity Bond Fund is designed to provide regular interest income and preservation of capital through investments in government and high-quality corporate debt securities that together, represent below average risk.

One's investment buys a fully-diversified portfolio of bonds, chosen for both their income potential, and the quality and reputation of the organizations that back or "secure" those bonds. With a host of bonds, representing the spectrum of what the bond market has to offer, investors in the Sun Life Prosperity Bond Fund are perfectly positioned to benefit from opportunity in the short, medium and long-term bond markets.

How Sun Life Prosperity Bond Fund works for you…

As income earning potential.
The Sun Life Prosperity Bond Fund generates regular income. This is possible because a fund's portfolio contains a range of bonds or other debt securities, each distributing interest income at different, pre-determined periods during the year. That constant flow of income distributions into the fund represents the steady income that fund investors are earning and accumulating on their investment.

The fund can also generate capital gains, as the bonds held in the fund's portfolio have fluctuating values. If the Portfolio Manager chooses to sell a bond or another debt security that was purchased at a cost which is lower than its value at the time it is sold, a capital gain will be realized by the fund. This can cause the value of your bond fund shares to increase.

A better return than cash, less risk than with equities.
As a group, fixed-income securities have an attractive trade-off between the risk you accept as an investor, and the returns from which you can benefit. This is called a risk/return profile and for bond funds, this profile falls somewhere between cash and stocks. Let us explain.

Cash investments are very safe, with little chance of loss due to market conditions but historically, they have provided lower average rates of return. On the other hand, equities experience periodic losses; yet of all asset classes, they average the highest annualized returns. Bond investments, with moderate returns, generally experience fewer down years than stock market investments, making them a good choice for conservative investors, or a stabilizing element within a more aggressive portfolio.

Benefiting from expert research and an in-depth understanding of the bond market.
Bonds are the loans of the investment world. And because they represent a financial obligation, they have a value, and that value is based not just on the amount of the original loan (or its "face value") but also on the interest rate that the bond carries.

A bond's market value will change depending on a number of factors, including changes in the general level of interest rates from the time a bond is issued until it matures. As a result, all bonds, once they are issued, can be bought and sold as those values change, just like stocks. And, just like stocks, timing one's buy and sell decisions is sometimes difficult for the average investor.

With Sun Life Prosperity Bond Fund, however, a professional manager is paid to constantly monitor the bond market and make those important decisions. And, they do so based on their knowledge of the bond market, familiarity with the credit ratings of bond issuers, and in-depth assessments of the effect of interest rate changes on the markets and on the portfolio of bonds they manage. Their full-time job is to select and monitor quality investments that can maximize the overall rate of return to the fund's investors.

A strict investment policy.
The Sun Life Prosperity Bond Fund will invest only in high quality fixed-income securities issued by the Philippine government and prime Philippine companies. With the exception of government issues, the fund may not invest more than 10% of its assets in any single enterprise or company.

Professional investment management.
The fund gives you affordable access to high caliber investment management that is usually reserved for corporations, institutions and the very wealthy. Successful investing takes knowledge and careful research. With international operations, subsidiaries and joint ventures serving millions of people in Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Indonesia, India, and China, Sun Life Financial is a global force in financial services.

The team of investment professionals located in the Philippines, who have been mandated to manage the portfolio of the Sun Life Prosperity Bond Fund, are presently managing assets in excess of Php 54.11 Billion¹.

Investing for the long term.
When you invest in a mutual fund, you are investing in a diversified portfolio of securities that normally fluctuate in value. To obtain the best results, they should generally be regarded as long-term investments, which means they should be held for seven years or more.

The securities markets in which mutual funds invest tend to rise and fall over the short-term, as will the value of your investment. Your ability to withstand short-term volatility, especially on the down-side, will generally result in greater returns over the long-term. When the value of your investments decreases, and it will from time to time, be patient.

Let your investments work for you.

How much of your investment you want to put in the Sun Life Prosperity Bond Fund - whether as a mere stabilizing element in a more aggressive portfolio, or a little bit more - may be determined by knowing your risk tolerance, time horizon, and investment objective. Once you have decided how much you want to place in the Fund, you will be given three purchase options:

Option A (front-end sales load) requires that you pay the sales charge upon investing. Option B (back-end sales load), on the other hand, requires that you pay a sales charge only if you redeem (sell your shares to the fund) within seven years, with the charges on a decreasing rate per year, reaching zero after the seventh year.

The third sales load option (Option C) is called the front-end load with redemption fee. Purchasing shares under this option means paying a lower sales charge upon entry (compared to Option A), and a lower sales charge upon redemption (compared to Option B). The sales charge upon redemption will only be paid if you redeem in less than 2 years. The minimum initial investment for this option, however, is pegged at Php 1,000,000.

All of these options also allow you to transfer between selected peso-denominated funds as much as four times a calendar year, free of charge.

Note: ¹as of end-December 2004.