2

Annex B
SEC Form 17-C Dated and Received 06 September 2018

3
5
 FINAL PROSPECTUS

SUN LIFE OF CANADA PROSPERITY

BALANCED FUND, INC.

(Open-end Investment Company)

The Fund’s current authorized capital stock consists of Four Billion (4,000,000,000) common shares
with a par value of PHP0.01 per share. The Offer Shares consisting of One Billion (1,000,000,000)
common stock with a par value of PHP0.01 per share will be offered at current net asset value. The
Offer Shares will be traded over the counter.

Sun Life Asset Management Company, Inc.

Investment Company Adviser and Principal Distributor
8th Floor, Sun Life Centre
5th Street corner Rizal Drive, Bonifacio Global City, Taguig City
Tel. No. (632) 555-8888

The date of this Prospectus is 17 July 2014.

THIS PROSPECTUS SHOULD BE READ CAREFULLY BEFORE INVESTING AND RETAINED

FOR FUTURE REFERENCE.
 SUN LIFE OF CANADA PROSPERITY BALANCED FUND, INC.
(A corporation organized under Philippine laws)

This Prospectus relates to the offer of 1,000,000,000 shares of the Sun Life of Canada Prosperity
Balanced Fund, Inc. (the “Fund”) with a par value of PHP0.01 per share at an offer price of the current
Net Asset Value Per Share (“NAVPS”).

Total gross proceeds of the 1,000,000,000 Offer Shares, if sold as of 31 May 2014, are estimated at
PHP3,558,800,000 (computed by multiplying 1,000,000,000 Offer Shares by PHP3.5588 NAVPS as
of 31 May 2014).

The net proceeds from the sale of securities will be used to invest in a mix of Peso-denominated and
foreign-currency denominated, high-quality debt (bonds) and equity securities from both local and
foreign issuers. For a more detailed discussion, please refer to the section entitled “Use of Proceeds”.

The shares are being offered in the Philippines through Sun Life Asset Management Company, Inc.
(“SLAMCI”). SLAMCI is being paid the following fees: (a) as the Fund’s adviser and manager, an
annual fee of 1.00% of the Assets Under Management (“AUM”), estimated at PHP162,344,216.89,
inclusive of VAT; and (b) as the Fund’s distributor, an annual fee of 1.00% of AUM, estimated at
PHP162,344,216.89, inclusive of VAT. For a more detailed discussion on the Investment Manager,
please refer to the section entitled “Plan of Distribution”.

All of the offered shares are common shares, voting with identical rights and privileges, and may be
owned by any person or entity, regardless of nationality.

The Board of Directors of the Fund has the power to fix and determine the amount to be reserved or
provided for declaration and payment of dividends from the Fund’s unrestricted retained earnings.
The amount of such dividends (either in cash, stock, property or a combination of the foregoing) will
depend on the Fund’s profits, cash flows, capital expenditure, financial condition, and other factors.
The existence of surplus profit arising from the operation of the Fund is needed before a dividend can
be declared. The surplus profits or income must be a bona fide income founded upon actual earnings
or profits. Actual earnings or profits shall be the net income for the year based on the audited financial
statements, adjusted for unrealized items, which are considered not available for dividend declaration.

Cash dividends and property dividends may be declared by the Board of Directors and no stockholder
approval is required. Stock dividends paid on the Offer Shares are subject to approval by both the
Board of Directors and the stockholders representing at least two-thirds (2/3) of the outstanding
capital stock of the Fund at a stockholders’ meeting called for such purpose.

Under the Corporation Code, Corporations with surplus profit in excess of 100% of its paid-in capital
stock are required to declare dividends (cash or stock) and distribute it to its stockholders.

Dividends so declared will be automatically reinvested in additional shares on behalf of the

shareholders, without sales charges, at the NAVPS on the payment date established for such
dividends. Shareholders may also elect not to have dividends reinvested and receive payment in
cash, net of tax.

The Fund shall not participate in any underwriting or selling group in connection with the public
distribution of securities, except for its own capital stock.

Unless otherwise stated, the information contained in this Prospectus has been supplied by the Fund,
which accepts full responsibility for the accuracy of the information and confirms, having made all
reasonable inquiries, that to the best of its knowledge and belief, there are no material facts the
omission of which would make any statement in this Prospectus misleading in any material respect.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information contained herein is correct as of any time subsequent to
the date hereof.

2
ALL REGISTRATION REQUIREMENTS HAVE BEEN MET AND ALL INFORMATION CONTAINED
HEREIN IS TRUE AND CURRENT.

MA. KARENINA M. CASAS

President

SUBSCRIBED AND SWORN to before me this __th day of _____________ 2014, the affiant
exhibiting to me her Philippine Passport No. XX 5673744 issued in Manila on March 4, 2010.

Notary Public

Doc. No. ___;

Page No. ___;
Book No. ___;
Series of 2014.

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 TABLE OF CONTENTS

SUMMARY 8
THE FUND 8
FINANCIAL HIGHLIGHTS (In Pesos) 8
RISKS OF INVESTING 8
TERMS OF THE OFFER 9
RISK FACTORS 14
USE OF PROCEEDS 15
Estimated Expenses 16
DETERMINATION OF OFFERING PRICE 17
PLAN OF DISTRIBUTION 17
CUSTODIANS OF PORTFOLIO SECURITIES 18
INVESTMENT COMPANY ADVISER 18
TRANSFER AGENT 19
CAPITALIZATION 19
SECURITIES OF THE FUND 19
LEGAL MATTERS 20
INDEPENDENT AUDITORS 20
The Fund 20
Competition 21
Investment Objectives and Legal Restrictions 22
Policies with Respect to Security Investments 23
Prevention of Money-Laundering and Terrorist Financing 24
Compliance with Data Privacy Act of 2012 (Republic Act No. 10173) 24
Compliance with Foreign Account Tax Compliance Act 24
Effect of Existing or Probable Governmental Regulations on The Business 25
Employees 25
DESCRIPTION OF PROPERTY 27
LEGAL PROCEEDINGS 27
Market Information 27
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 28
MATERIAL CHANGES IN THE 1ST QUARTER FINANCIAL STATEMENTS 28
ANALYSIS COVERING THE CALENDAR YEARS 2012-2013 29
MATERIAL CHANGES IN THE 2013 FINANCIAL STATEMENTS 30
MATERIAL CHANGES IN THE 2012 FINANCIAL STATEMENTS 30
Top 5 Key Performance Indicators for the year ending 31 December 2013 and the period
ending 31 March 2014. 31
Tax Fees 33
All Other Fees 33
COMPLIANCE WITH LEADING PRACTICES ON CORPORATE GOVERNANCE 36
EXECUTIVE COMPENSATION 37
SECURITY OWNERSHIP OF CERTAIN RECORD AND BENEFICIAL OWNERS AND
MANAGEMENT 37
Changes in Control 37
Following are the interlocking directors and officers of SLAMCI and the Fund: 38
SUMMARY OF PRINCIPAL AGREEMENTS 38
MANAGEMENT AGREEMENT 38
DISTRIBUTION AGREEMENT 38
CUSTODY AGREEMENTS 39
INSTRUMENTS OR STATEMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS 39
TAXATION 39

4
PRINCIPAL PARTIES TO THE OFFER

REGISTRANT

Sun Life of Canada Prosperity Balanced Fund, Inc.

8th Floor, Sun Life Centre
5th Avenue corner Rizal Drive, Bonifacio Global City, Taguig City
e-mail: [email protected]
Website: www.sunlifefunds.com
Telephone No. 849-9888
Fax No. 849-9744

INVESTMENT COMPANY ADVISER, DISTRIBUTOR AND TRANSFER AGENT

Sun Life Asset Management Company, Inc.

8th Floor, Sun Life Centre
5th Avenue corner Rizal Drive, Bonifacio Global City, Taguig City
e-mail: [email protected]
Website: www.sunlifefunds.com
Telephone No. 555-8888
Fax No. 849-9744

CUSTODIAN BANKS

Citibank, N.A.
Citibank, N.A. 21st Floor, Philamlife Tower
8767 Paseo de Roxas
Makati City 1226, Philippines

Deutsche Bank, A.G

23rd Floor, Tower One, Ayala Triangle
Ayala Avenue, Makati City

Hong Kong and Shanghai Banking Corp.

7th Floor, HSBC Centre
3058 Fifth Avenue West
Bonifacio Global City, Taguig City

LEGAL COUNSEL

Romulo Mabanta Buenaventura Sayoc & De Los Angeles Law Office

21st Floor, Philamlife Tower
8767 Paseo De Roxas
Makati City, Philippines

INDEPENDENT AUDITOR

Navarro Amper& Associates / Deloitte Touche Tohmatsu

19/F Net Lima Plaza
5th Avenue corner 26th Street
Bonifacio Global City, Taguig City

5
 GLOSSARY

ACS Authorized Capital Stock

AUM Assets Under Management

BSP Bangko Sentral ng Pilipinas

Business Day A day in which all of the markets where the Fund’s assets
are traded and open for clearing of funds and trading in
securities, and each business day will end at the hour and
minute when such last exchange closes for trading of
securities for the day.

Dealers Eligible securities dealers that have entered into an

agreement to sell shares with the Fund’s Principal
Distributor

Fund Sun Life of Canada Prosperity Balanced Fund, Inc.

Grepalife Funds Grepalife Bond Fund Corporation

Grepalife Fixed Income Fund Corporation
Grepalife Dollar Bond Fund Corporation

NAVPS Net Asset Value Per Share

Offer The offering for subscription of shares of common stock at

an offer price of the current NAVPS.

Offer Shares One Billion (1,000,000,000) with a par value of One

Centavo (PHP 0.01) per share for a total amount of Pesos:
Ten Million (PHP 10,000,000.00)

Peso / PHP The currency of the Republic of the Philippines

PIFA Philippine Investment Funds Association, Inc.

R. A. No. 2629 Investment Company Act

R. A. No. 8799 Securities Regulation Code

R. A. No. 9160 Anti-Money Laundering Act of 2001, as amended

R. A. No. 10168 The Terrorism Financing Prevention and Suppression Act

of 2012

R.A. No. 10173 Data Privacy Act of 2012

SEC or the Commission Securities and Exchange Commission

SLAMCI or Investment Company Sun Life Asset Management Company, Inc.

Adviser

SLFPI Sun Life Financial Plans, Inc.

SLOCPI Sun Life of Canada (Philippines), Inc.

6
Sun Life Prosperity Funds Sun Life of Canada Prosperity Bond Fund, Inc.
Sun Life of Canada Prosperity Balanced Fund, Inc.
Sun Life of Canada Prosperity Philippine Equity Fund, Inc.
Sun Life Prosperity Money Market Fund, Inc.
Sun Life Prosperity GS Fund, Inc.
Sun Life Prosperity Dollar Advantage Fund, Inc.
Sun Life Prosperity Dollar Abundance Fund, Inc.
Sun Life Prosperity Dynamic Fund, Inc.
UITF Unit Investment Trust Fund

7
 SUMMARY

The following summary is qualified in its entirety by the more detailed information appearing
elsewhere in this Prospectus. Certain terms used herein are defined under “Glossary”.

THE FUND

The Fund is a Philippine corporation registered as an open-end investment company under R. A.

2629 and R. A. 8799, on December 21, 1999 under SEC Registration No. A199908713. The Fund’s
investment objective is to provide moderate growth and a steady income stream through investments
in high quality equity securities and high quality corporate and government debt securities.

Open-end mutual fund companies in the Philippines are organized as stock corporations. The Fund
may become fully subscribed at any point in time. In such case, the Fund would continue to accept
deposits for future subscription (“DFFS”) in anticipation of an increase in capital, subject to the
requirements of the law and regulations on the same. The DFFS accepted would be earmarked for
the issuance of the appropriate number of shares that the DFFS would have purchased as of date of
acceptance. Upon approval of the increase in authorized capital stock and upon registration of the
new shares resulting therefrom with the SEC, the Fund would release the shares the DFFS had
purchased, according to the “first in, first out” rule.

FINANCIAL HIGHLIGHTS (IN PESOS)

For the Period 31-Mar-14 31-Dec-13 31-Dec-12 31-Dec-11

Ended Unaudited Audited Audited Audited
Gross Investment
722,088,729.37 (321,001,216) 2,547,305,121 549,553,855
Income
Operating
109,827,390.48 452,315,359 247,470,658 212,003,929
Expenses
Provision for
10,285,850.93 109,637,985 35,065,230 15,968,840,
Income Tax
Net Investment
601,975,487.96 (882,954,560) 2,264,769,233 321,581,086
Income
Total Assets 17,176,016,394 16,276,988,973 12,059,927,361 8,725,564,884
Liabilities 291,209,533 44,765,210 121,307,254 55,235,677
Net Assets 16,884,806,862 16,232,223,763 11,938,620,107 8,670,329,207
Net Assets Value
3.4903 3.3652 3.4129 2.7223
per Share

RISKS OF INVESTING

Prospective investors should carefully consider the matters addressed under “Risk Factors” before
making an investment decision regarding the Offer Shares. Each of these matters could have
adverse consequences to the Fund.

These risks (as described and explained under “Risk Factors”) include:

 Market Risk: Interest Rate Risk

 Credit Risk
 Liquidity Risk
 Regulatory Risk
 Non-guarantee Risk
 Dilution Risk
 Large Transaction Risk
 Fund Manager Risk

8
The enumerated risks could adversely affect the redemption value of the securities for the
shareholders resulting in losses should the shareholder redeem his shares when the NAVPS of the
Fund is below his acquisition cost. For a more detailed discussion of these risks to be considered in
connection with an investment in the Fund’s shares, see “Risk Factors”.

TERMS OF THE OFFER

The Fund is offering 1,000,000,000 shares of common stock with a par value of PHP 0.01 per share,
at an offer price of the current NAVPS. The Offer Shares are being offered in the Philippines through
SLAMCI.

Minimum Initial Investment PHP5,000.00

Minimum Subsequent PHP1,000.00

Investment

Minimum Redemption PHP1,000.00.

Amount
The minimum redemption amount of PHP1,000.00 is
observed unless the redemption is part of a special
arrangement or other services offered by SLAMCI.
Should the shares of the investor fall below the minimum
redemption amounts after redemption, SLAMCI may, without
notice, redeem the remaining shares and pay the proceeds to
the investor. The Fund reserves the right to change the
minimum maintaining balance from time to time as it deems
necessary.

Offer Price The Offer Price per Offer Share is the current NAVPS.

Voting Rights Each holder of a share in the Fund is entitled to one vote, in
person or by proxy, for each share held by such shareholder.

Dividends The Board of Directors of the Fund has the power to fix and
determine the amount to be reserved or provided for
declaration and payment of dividends from the Fund’s
unrestricted retained earnings. The amount of such dividends
(either in cash, stock, property or a combination of the
foregoing) will depend on the Fund’s profits, cash flows,
capital expenditure, financial condition, and other factors. The
existence of surplus profit arising from the operation of the
Fund is needed before a dividend can be declared. The
surplus profits or income must be a bona fide income
founded upon actual earnings or profits. Actual earnings or
profits shall be the net income for the year based on the
audited financial statements, adjusted for unrealized items,
which are considered not available for dividend declaration.
Cash dividends and property dividends may be declared by
the Board of Directors and no stockholder approval is
required. Stock dividends paid on the Offer Shares are
subject to approval by both the Board of Directors and the
stockholders representing at least two-thirds (2/3) of the
outstanding capital stock of the Fund at a stockholders’
meeting called for such purpose.

Under the Corporation Code, Corporations with surplus profit

9
 in excess of 100% of its paid-in capital stock are required to
declare dividends (cash or stock) and distribute it to its
stockholders.

Eligibility Both Philippine nationals and non-Philippine nationals can

subscribe to the Fund’s Shares, including the Offer Shares.

Application and Payment Shares of the Fund are sold on cash basis only. Installment
sales will not be made.
Shares of the Fund are offered for sale on a continuous basis
at the NAVPS through SLAMCI’s registered representatives
and dealers. The dealers and registered representatives are
required to forward to SLAMCI the prescribed and complete
documents to purchase shares of the Fund on the same
business day they are received. For purposes of facilitating
transactions, the completed documents may be submitted
electronically through fax or on-line, or any mode of
transmittal which SLAMCI may establish and deem
acceptable from time to time. All payments to be forwarded
to and received by SLAMCI should come with and must be
supported by the appropriate documents. Payments must
also be forwarded and received by SLAMCI through
mediums recognized and accredited by SLAMCI. The
investor’s account will be credited for the subscription only
when the payment is in the form of cash, cheque or electronic
transfer. The subscription will not be processed into the
investor’s account until the payments have become available
to the Fund for investment deployment. Investors should
inquire with their banks the clearing time required for each
form of payment and when their investments will be available
to the Fund. Applicable bank charges will be deducted from
the investible amount.
SLAMCI has the option to process local cheques
denominated in Philippine Pesos as cleared funds provided
that:

1. The Investor accomplishes a Waived Clearing Form upon

payment.

2. The cheque will be deposited into a bank accredited by

SLAMCI for such purpose.

To reduce the adverse effect to existing investors of large

redemptions in the Fund, a subscription may be amended or
rejected if it makes the investor a holder of 10% or more of
the Fund’s net assets on subscription date.

Sales Loads The investor may choose to buy shares of the Funds on a
“front-end” (Option A) or a “back-end” (Option B) basis, as
described below:

Option A Sales commission will be paid to the investor’s mutual fund

dealer when shares of the Fund are bought. Under this
purchase option, the investor may redeem his shares free of
charge at any time.
The commission shall not exceed 2% of the investor’s total
purchase cost (2.04% of the net invested amount).

10
Option B Allows all of an investor’s money to be invested, with no initial
sales commission deducted. SLAMCI pays a commission to
the dealer on the investor’s purchase. In return, the investor
agrees to “repay” SLAMCI a deferred sales charge (“DSC”)
plus VAT, but only if the investor sells the investment, or a
portion thereof, within 5 years. The DSC rate declines the
longer an investor holds the investment, and disappears after
five (5) years. (See Exhibit 1)
In order to reduce the DSC payable, the oldest shares of the
investor in the Fund will be redeemed first, unless the
investor chooses to have subsequently purchased shares
redeemed first.

Subscription Process Subscriptions received by SLAMCI or its authorized

distributors by 12 o’clock noon on a business day will be
processed at the NAVPS determined at the close of business
that day.
SLAMCI reserves the right to reject any specific subscription
or to restrict purchases by a particular investor, for example,
when such purchase is contrary to the best interests of the
other shareholders or would otherwise disrupt the
management of the Fund. This decision will be made within
two (2) business days after receipt of the subscription and, in
the event of a rejection, the subscription amount will be
returned as soon as possible to the investor without interest
and after deducting applicable bank charges.

Cut-Off Period If received after 12 o’clock noon, subscriptions will be

processed at the NAVPS calculated for the next business
day.
Shares are redeemable at any time at their NAVPS. Further,
Redemption Process
redemption of transferred shares originally under Option “B”
or “C” (under the old Sales Load structure as discussed in
Exhibit 1) will be subjected to the applicable deferred sales
charge.

A shareholder may request for the redemption of his shares

by delivering an order ticket or any document to be
prescribed and recognized by SLAMCI for redemption to a
registered representative or dealer or to SLAMCI. The order
ticket for redemption must be accompanied by the
appropriate certificate(s), if applicable, representing the
shares to be redeemed.

The redemption price is the NAVPS at the close of business

day if order ticket is received on or before 12 o’clock noon.
After 12 o’clock noon, the order ticket is deemed to have
been received the following business day, and the
redemption price will be the NAVPS determined at the close
of business on the next business day.

Payment upon redemption will be made either by issuing a

cheque to the registered shareholder or through bank
remittance. Payments for shares redeemed, less any
redemption charges and taxes applicable, will be made by
the Fund within seven (7) business days from its receipt of
the request for redemption. Payment made through bank
remittance may be subjected to applicable bank charges,

11
 subject to client’s arrangement with the remitting and
receiving bank. SLAMCI reserves the right to deduct any
applicable bank charges from the redemption value. For
payment made through cheque issuance, investor will
receive payment within seven (7) banking days from date of
redemption for the amount redeemed.

The Fund may suspend redemptions or postpone the date of

payment for a redemption upon the occurrence of any of the
following: (i) when the Philippine banking system is closed,
(ii) for any period when normal trading is restricted or
suspended in the markets where the Fund may be
investing,(iii) for any period during which an emergency
exists as a result of which (A) disposal by the Fund of
securities owned by it is not reasonably practicable or (B) it is
not reasonably practicable for the Fund to fairly determine
the value of its net assets, (iv) when any breakdown occurs in
the means of communication normally employed in
determining the value of any of the investments of the Fund
or when for any other reason the value of any of the
investments or other assets of the Fund cannot reasonably or
fairly be ascertained, (v)when the shareholder fails to
surrender to SLAMCI the original share certificate on the
redeemed or transferred shares, or (vi) all other conditions for
the suspension of redemption are subject to the approval of
SEC per Section 22(b) (3) of R. A. No. 2629.

The SEC may, whenever necessary or appropriate, in the

public interest or for the protection of investors, suspend the
redemption of securities of open-end companies.

No deferred sales charge or redemption fee is imposed on

redemptions on transferred shares under Option B or Option
C (under the old Sales Load structure as discussed in Exhibit
1) in case of death of the investors. In order to qualify for this
waiver, redemption must be made within 1 year of a
shareholder’s death. SLAMCI must be notified in writing of
such death at the time of the redemption request either by
the legal heir or administrator of the estate appointed by the
court. SLAMCI must be provided with satisfactory evidence
of the death, identity of the heirs, or appointment of the
administrator, or such other documents necessary to process
the redemptions.

Restriction on Issue and SLOCPI and its nominees, who are original shareholders of
Transfer of Shares the Fund, shall not be allowed to sell, transfer, convey,
encumber or otherwise dispose of their shares within twelve
(12) months from the original registration of the Funds. Each
share of stock of the Fund is a voting stock with voting rights
equal to every outstanding share of stock. As of the date of
this Prospectus, this holding period has expired.

Transfers among Sun Life At any time, an investor who purchased shares of the Fund
Prosperity Funds may request through a registered representative that such
shares be redeemed and the proceeds reinvested in shares
of one (1) or more eligible SLAMCI-managed funds, i.e. Sun
Life Prosperity Money Market Fund, Inc., Sun Life of Canada
Prosperity Balanced Fund, Inc., Sun Life of Canada
Prosperity Philippine Equity Fund, Inc. and Sun Life

12
 Prosperity GS Funds, Inc., subject to sales load upon entry.
Transfer from other eligible SLAMCI-managed funds is
allowed. However, the investor’s original purchase option
may not be changed upon such transfer. If the investor
originally purchased on a front-end basis, then the investor
cannot shift to the back end option when transferring.
A transfer of back end share does not trigger a deferred sales
charge (“DSC”). The “new” shares purchased on a transfer
are deemed to have the same date of purchase as the
original shares that were redeemed to make the transfer.
The minimum transfer amount is PHP1,000.00, provided that
the investor already has the minim required investment with
the Fund to which the transfer shall be made. The order
ticket to transfer must be made through the registered
representative or dealer who must forward the order ticket to
transfer to SLAMCI on the same day. On SLAMCI’s receipt
of an order ticket to transfer, shares will be redeemed by the
Fund, subject to the foregoing provisions on redemption, and
the proceeds of redemption will be applied to the purchase of
shares of another fund, at the applicable NAVPS, subject to
the provisions governing the purchase of the shares of the
other fund.
*Please see Exhibit 1 for details of front end and back end
sales loads.

Pre-emptive Right No stockholder shall, because of his ownership of stock,

have a pre-emptive or other right to purchase, subscribe for,
or take any part of any stock or of any other securities
convertible into carrying options or warrants to purchase
stock of the registrant.

Stock Certificate In the interest of economy and convenience, certificates of

shares will only be issued if so requested in writing by the
shareholder. Because the legal requirements for replacing
lost certificates entail costly and lengthy procedures, a fee of
PHP1,000.per certificate will be charged to replace lost
certificates.
Shareholders are given official receipts and confirmation slips
upon subscription. Shares are recorded on a stock register
by SLAMCI, and shareholders who do not elect to receive
certificates have the same rights as if certificates had been
issued to them.

RISK DISCLOSURE STATEMENT

GENERAL WARNING

The price of securities can and does fluctuate, and any individual security may experience upward or
downward movements, and may even become valueless. There is an inherent risk that losses may
be incurred rather than profit made as a result of buying and selling securities.

Past performance is not a guide to future performance.

There is an extra risk of losing money when securities are bought from smaller companies. There
may be a big difference between the buying price and the selling price of these securities.

13
An investor deals in a range of investments each of which may carry a different level of risk.

PRUDENCE REQUIRED

The risk of disclosure does not purport to disclose all the risk and other significant aspects of investing
in these securities. An investor should undertake his own research and study on the trading of
securities before commencing any trading activity. He may request information on the securities and
issuer thereof from the Commission which are available to the public.

PROFESSIONAL ADVICE

The investor should seek professional advice if he is uncertain or has not understood any aspect of
the securities or the nature of risks involved in trading of securities, especially high risk securities.

RISK FACTORS

Before investing, potential investors should consider carefully the factors set forth below in
conjunction with the other information contained in this Prospectus, in evaluating an investment in the
Offer Shares.

There are many potential advantages to investing in mutual funds and in the Offer Shares. However,
in deciding to invest, the investor is strongly advised to also consider the risks involved in investing in
mutual funds, and in the Offer Shares, as well as the risks that the Fund faces, given its underlying
assets whose respective values essentially affect the Fund’s overall net asset value.

The Fund’s Risk Officer is responsible for overseeing the management of risks resulting from the
Fund’s business activities. He reports to the Audit and Compliance Committee of the Board of
Directors. His duties and responsibilities include, among others: monitoring the investments of the
Fund to ensure that all identified gaps in management’s risk and management processes are resolved
on a timely basis; provide leadership to facilitate management’s understanding of the risk
management framework, policies and processes; ensuring that the Philippine risk management
organization is appropriately staffed with individuals who have the requisite skills and competencies,
and that the organization structure and reporting relationships are appropriate and sufficiently
independent; organizing and participating in the risk workshops of the annual risk identification
process; ensuring that business units identify plausible risk scenarios; ensuring that risk-based
measurement and reporting metrics, including risk limits and exception reporting are established;
assigning risk category to the final risk lists; providing expertise in the development of action plans to
address the risks identified; reviewing and updating the risk report quarterly; identifying and escalating
as appropriate any missed target dates for key risk action plans; and providing documented quarterly
status updates on key risks to the Audit and Compliance Committee. Pursuant to the foregoing, the
Risk Officer has identified the risks enumerated below in order of importance:

Market Risk: Interest Rate Risk is a type of Market Risk which is applicable to the Fund’s
investments in bonds, if any. This refers to the increase/decrease of a bond price due to
movement in market factors such as changes in interest rates. A change in interest rates is the
period when interest rates rise or fall thus causing the decline or increase in the market price of
the bonds held by the Fund, if any. This risk is minimized by closely monitoring the direction of
interest rates and aligning it with the appropriate strategy of the Fund.

Credit Risk: Investments in bonds carry the risk that the issuer of the bonds might default on its
interest and principal payments. In the event of default, the Fund’s value will be adversely
affected and may result in a write-off of the concerned asset held by the Fund. To mitigate the
risk, each Issuer/Borrower/Counterparty passes through a stringent credit process to determine
whether its credit quality complies with the prescribed standards of the Fund. Further, the credit
quality of the Issuer/Borrower/Counterparty is reviewed periodically to ensure that excellent
credit standing is maintained. Moreover, a 10% exposure limit to a single entity is likewise
observed.

14
 Liquidity Risk: The Fund is usually able to service redemptions of investors within seven (7)
banking days after receipt of the notice of redemption by paying out redemptions from available
cash or near cash assets in its portfolio. However, when redemptions exceed the Funds
available cash or near cash assets in its portfolio, the Fund will have to sell its other security
holdings; and during periods of extreme market volatility, the Fund may not be able to find a
buyer for such assets. Consequently, the Fund may not be able to generate sufficient cash from
its sale of assets to meet the redemptions within the normal seven (7) banking day period. To
mitigate this, the Fund maintains adequate highly liquid assets in the form of cash, cash
equivalents and near cash assets in its portfolio. As the Fund’s portfolio is composed of liquid
assets, liquidity risk is deemed low.

The following are additional risks present in managing the Fund, however, non-quantifiable.

Regulatory Risk: The Fund’s investments and operations are subject to various regulations
affecting among others, accounting of assets and taxation. These regulations occasionally
change, and may result in lower returns or even losses borne by the investors. For example, a
higher tax imposed on the sale or purchase of underlying assets of the Fund may result in lower
net asset value of the Fund. To mitigate this risk, SLAMCI adopts global best practices. Further,
it maintains regular communications with the relevant government agencies to keep itself abreast
of the issues giving them concern, and to have the opportunity to help them set standards for
good governance. SLAMCI also takes an active participation in the Philippine Investment Funds
Association, Inc. (“PIFA”), an association of mutual fund companies in the Philippines.

Non-guarantee: Unlike deposits made with banks, an investment in the Fund is neither insured
nor guaranteed by the Philippine Deposit Insurance Corporation (“PDIC”). Hence, investors
carry the risk of losing the value of their investment, without any guaranty in the form of
insurance. Moreover, as with any investment, it is important to note that past performance of the
Fund does not guarantee its future success.

Dilution Risk: Being an open-end mutual fund, various investors may effectively subscribe to
any amount of shares of the Fund. As such, investors face the risk of their investments being
diluted as more investors subscribe to shares of the Fund. The influence that the investors can
exert over the control and management of the Fund decreases proportionately.

Large Transaction Risk: If an investor in a Fund makes a large transaction, the Fund’s cash
flow may be affected. For example, if an investor redeems a large number of shares of a Fund,
that Fund may be forced to sell securities at unfavorable prices to pay for the proceeds of
redemption. This unexpected sale may have a negative impact on the net asset value of the
Fund.

Fund Manager Risk: The performance of the Fund is also dependent on the Fund Manager’s
skills. Hence, the Fund may underperform in the market and/or in comparison with similar funds
due to investment decisions made by the Fund Manager, and may also fail to meet the Fund’s
investment objectives. The Board of Directors of the Issuer, however, shall ensure that all
investment policies and restrictions enumerated in this Prospectus are strictly followed.

The above risk factors are by no means exhaustive. New and/or unidentified risks may arise given
the fast changing financial markets and economic environment.

Classification of the Fund into high, moderate or low risk investment: In furtherance of its
investment objective, that is, to generate income in Philippine Pesos consistent with prudent
management of the Fund’s assets, the Fund’s portfolio may consist of fixed income and other related
securities of the Philippine Government, and commercial papers issued by corporations within the
Philippines, certificates of deposits, and other short-term instruments. Considering the nature of the
aforementioned investments, the Fund is classified as a low-to-moderate risk investment.

USE OF PROCEEDS

Proceeds from the sale of the Offer Shares will be used to invest in high-quality debt instruments
issued by the Republic of the Philippines and prime Philippine companies.

15
The Fund’s investment manager shall be guided by the Fund’s Investment Policies and legal
limitations. All the proceeds from the sale of shares, including the original subscription payments at
the time of incorporation constituting the paid in capital of the Fund, shall be held by the designated
custodian banks.

The Fund shall not make loans to other interested persons such as members of its Board of Directors,
officers of the Fund and any of its affiliates/affiliated corporations. The Fund shall not acquire assets
or finance the acquisition of other business. It does not have any existing debt, thus, proceeds shall
not be utilized to settle any existing indebtedness or obligation.

Expenses charged to the Fund include, but are not limited to, remuneration of the members of the
Board who are not officers and/or employees of SLOCPI and/or SLAMCI, SEC filing fees,
documentary stamp taxes, registration statement fees, transfer, distribution, and management fees.

Below are the estimated expenses for the registration of the Offer Shares:

Estimated Expenses
SEC Registration Fees PHP 1,453,516.25
Publication 28,224.00
Documentary Stamp Tax 50,000.00
Professional Fees 100,000.00
TOTAL PHP 1,631,740.00

The net proceeds of the Fund are estimated to be as follows:

Gross Proceeds PHP 3,558,800,000.00

Less: Estimated Expenses 1,631,740.00
Net Proceeds PHP 3,557,168,260.00

The proceeds from the sale of the Offer Shares will not be used to reimburse any officer, director,
employee or shareholder for service rendered, assets previously transferred, money loaned or
advanced or otherwise.

16
 DETERMINATION OF OFFERING PRICE

The Offer Price will be the NAVPS as at the end of the day. NAVPS is computed by dividing net
assets (total assets1 less total liabilities2) by the total number of shares issued and outstanding, plus
the total number of units outstanding due to DFFS and for conversion to shares, if any, as of the end
of the reporting day.

Completed subscriptions received by SLAMCI or its authorized distributors by 12 o’clock noon will be
processed at the NAVPS determined by SLAMCI at the close of business that day. If received after
12 o’clock noon, subscriptions will be processed at the NAVPS calculated for the next business day.

The Fund will compute and post the NAVPS on a daily basis and will publish such daily prices in at
least two (2) newspapers of general circulation in the Philippines; and post them daily in a
conspicuous place at the principal office of the Fund as well as in all of its branches which are
designated redemption centers.

PLAN OF DISTRIBUTION

The Fund does not have any underwriter, and has not entered into any underwriting agreement.
There are no shares designated to specified persons. There is no plan to apply for listing in any
exchange the shares of Registrant. Thus, none of the Registrant’s shares are to be allocated to an
exchange and/or to its members.

PRINCIPAL DISTRIBUTOR

SLAMCI serves as the Fund’s Principal Distributor. An annual fee of 1.00% of AUM (estimated at PHP
164,614,987.81) is paid by the Fund for the distribution services of SLAMCI. As principal distributor,
SLAMCI will continuously offer for sale shares of the Fund through its registered representatives
legally qualified to sell the Fund’s shares and dealers with whom it has entered into distribution
agreements. SLAMCI’s registered representatives are Sales Agents, who are entitled to collect
commission rates of not exceeding 1% of front end sales load and/or not exceeding 3% of sales
amount for back end sales loads.

Any order for shares may be rejected by SLAMCI. The SEC, Fund, or SLAMCI may suspend the
continuous offering of shares to the general public at any time in response to conditions in the
securities markets or otherwise and may thereafter resume such offering from time to time. Neither
SLAMCI nor the eligible agents are permitted to withhold placing orders to benefit themselves from a
price change.

All proceeds from sale of shares/securities, including the original subscription/payments at the time of
incorporation constituting the paid-in capital of the Fund shall be held by the designated custodian
banks.

1
The assets of the Fund shall be deemed to include (i) all cash on hand, or on call, (ii) all bills, notes and accounts
receivables, (iii) all shares of stocks and subscription rights, and other securities owned or contracted for the Fund, other
than its own capital stock, (iv) all stock and cash dividends and cash distributions to be received by the Fund but declared
to stockholders of record on a date on or before the date as of which the net asset value per share of the Fund is being
determined, (v) all interests accrued on any interest-bearing security owned by the Fund, (vi) all real properties and
interests therein, and (vii) all other property of every kind and nature including prepaid expenses.
2
The liabilities of the Fund shall be deemed to include (i) all bills, notes and accounts payable, (ii) all administrative
expenses payable and/or accrued (including management fees), (iii) all contractual obligations for the payment of money
or property, including the amount of any unpaid dividend declared upon the Fund’s stock and payable to shareholders of
record on or before the date on which the value of the Fund is being determined, (iv) all reserves authorized or approved
by the Board of Directors for taxes or contingencies, and (v) all other liabilities of the Fund of whatsoever kind and nature
except liabilities represented by the outstanding capital stock and surplus of the Fund.

17
CUSTODIANS OF PORTFOLIO SECURITIES

CITIBANK, N.A. DEUTSCHE BANK, A. G. HSBC

8741 Paseo de Roxas 23rd Floor, Tower I, Ayala 7/F HSBC Centre
Makati City Triangle 3058 Fifth Avenue West
Ayala Avenue, Makati City Bonifacio Global City, Taguig
City

In consideration of the services to be rendered by the custodians, the Fund shall pay the custodians
all fees, charges and obligations incurred from time to time for services rendered pursuant to the
Direct Custodial Services Agreements between each registrant and custodian with the terms of the
fees schedule specified from time to time by the custodian, upon prior notice to the registrants. The
custodianship fees are usually quoted as a percentage per annum (% p.a.) of the securities’ notional
or market value, billed at every month-end. The designated custodians also charge transaction fees
for the purchase and sale of portfolio securities, usually at a flat fee per transaction.

INVESTMENT COMPANY ADVISER

1. SLAMCI is an Investment Company Adviser incorporated on 18 January 2000 and started

commercial operations on 1 May 2000. Its primary purpose is to manage, provide and render
management and technical advice and service for mutual funds, corporations, natural persons
and other entities and in connection therewith, as far as may be permitted by law, to purchase,
subscribe for or otherwise acquire, mortgage, sell or otherwise dispose of, and deal in securities
of every kind and description including, but not limited to, stocks, bonds, notes, commercial
papers and to promote, manage and participate in the distribution of any securities, to the extent
provided by law.

2. SLAMCI is a licensed investment company adviser and holds a current license from the SEC. The
license of SLAMCI was renewed on 29 November 2013.

In a letter dated 05 July 1999 addressed to the PIFA 3, the SEC advised of the suspension of the
implementation of SEC-BED Memorandum Circular No. 1, series of 1999, which required
investment managers and/or advisers to secure a license as a securities broker on or before 30
June 1999.

There is no arrangement whereby SLAMCI has the right to designate or nominate a member or
members of the Board of Directors of the Fund. Thus, there is no director so designated or
nominated pursuant to an agreement between SLAMCI and the Fund.

There is no share designated to be sold to specified persons. No share is to be designated to an

exchange and/or its members, or by an exchange to its members.

3. SLAMCI’s registered office address is at the 8th Floor Sun Life Centre, Bonifacio Global City,
Taguig City.

4. Affiliated company of the Fund which is also an affiliated company of SLAMCI is:
Name Address Nature of Affiliation
Sun Life of Canada 2nd Floor, Sun Life Centre, 5th Stockholder
(Philippines), Inc. Avenue corner Rizal Drive,
Bonifacio Global City, Taguig City

5. The services provided by SLAMCI are subject to the supervision of its officers and directors.
They include marketing the Fund, being responsible for investments, investor communications,
fund accounting, shareholder record-keeping and other day-to-day administration of matters
related to the corporate existence of the Fund, maintenance of records and preparation of
Shareholder reports, Board of Directors’ meetings and annual Shareholders’ Meetings.

3
Then called the Investment Company Association of the Philippines.

18
 As compensation for the management services and facilities provided by SLAMCI, an annual fee
of 0.75% of AUM shall be paid by the Fund. In addition, an annual fee of 0.75% of AUM is also
charged to the fund for the distribution services of SLAMCI.

The Fund is responsible for its own operating expenses. At times, SLAMCI may reduce its fees
and/or pay expenses in order to reduce the Fund’s aggregate annual operating expenses. This
arrangement may be revised or discontinued by SLAMCI at any time.

6. As Investment Company Adviser, SLAMCI is also primarily responsible for the execution of the
Fund’s portfolio transactions and the allocation of brokerage commissions. SLAMCI makes
investment decisions, prepares and makes available research and statistical data, and invests
with respect to the purchase and sale of securities on behalf of the Fund, including the selection
of brokers and dealers to carry out the transactions, all in accordance with the Fund’s investment
objective and policies. SLAMCI maintains records and furnishes or causes to be furnished all
required reports.

7. SLAMCI may, at its expense, engage the services of consultants and other persons or firms to
furnish SLAMCI statistical and other information, advice regarding economic factors and trends,
information with respect to technical and scientific developments, and such other information,
advice and assistance as SLAMCI may desire, including investment management and other
related duties.

TRANSFER AGENT

SLAMCI also serves as the Fund’s Transfer Agent. Transfer Agent services include, but are not
limited to, account/certificate registration, processing of dividend and capital gains cheques, periodic
preparation and mailing of shareholder statements and management reports, as required.

In consideration of the services to be rendered by the Transfer Agent, the Fund shall pay the Transfer
Agent an amount equivalent to an annual fee of 0.15% of AUM as stipulated in the Transfer Agent
Agreement between the Fund and SLAMCI. Fees will begin to accrue on the first day of the Fund’s
operations.

DESCRIPTION OF SECURITIES TO BE REGISTERED

CAPITALIZATION

On the date of incorporation, the Fund had an authorized capital stock of Two Hundred Million Pesos
(PHP200,000,000.00) divided into Two Hundred Million (200,000,000) shares with a par value of One
Peso (PHP1.00) per share. Out of the original authorized capital stock, Fifty Million Pesos
(PHP50,000,000.00) worth of shares have been subscribed and paid upon incorporation. Since then,
the authorized capital stock has been decreased on 12 May 2006 to Two Million Pesos
(PHP2,000,000.00) divided into Two Hundred Million (200,000,0000) shares with a par value of One
Peso (PHP1.00) per share.

On January 17, 2014, the SEC approved the increase in the authorized capital stock of the Fund from
Forty Million Pesos (Php40,000,000.00) divided into 4,000,000,000 shares of the par value of Php 0.1
to Fifty Million Pesos (Php 50,000,000.00) divided into 5,000,000,000 shares of the par value of Php
.01 per share.

As of 31 May 2014, the Fund has an outstanding capital stock of 4,745,487,578 shares, equivalent to
PHP 16,888,241,192.50 at a NAVPS of PHP 3.5588.

SECURITIES OF THE FUND

Each share of stock of the Fund is a voting stock with voting rights equal to every other outstanding
share of stock of the same Fund, and subject to the following conditions:

1. Distribution of Dividends. Each shareholder has a right to any dividends declared by the Fund.

19
2. Denial of Pre-emptive Rights. No stockholder shall, because of his ownership of stock, have
pre-emptive or other right to purchase, subscribe for, or take any part of any other securities
convertible into or carrying options or warrants to purchase stock of the Fund.
3. Right of Redemption. The holder of any share of the Fund, upon its presentation to the Fund or
to any of its duly authorized representatives, is entitled to receive by way of redemption
approximately his proportionate share of the Fund’s current net assets or the cash equivalent
thereof.
4. Modification of Rights of Shareholders. The rights of shareholders of the Fund shall not be
modified except by amendment of the Fund’s Articles of Incorporation and/or By-Laws.
Other than the above and those provided by law, there are no other material rights accorded to the
shareholders.

While DFFS holders are not shareholders (hence, they do not have the rights to vote and receive
dividends), they have the right to ask for a return of their DFFS amounts at any time based on the
NAVPS at the time of redemption.

INTERESTS OF NAMED EXPERTS AND INDEPENDENT COUNSEL

LEGAL MATTERS

Certain legal matters under Philippine law will be passed upon for the Fund by Romulo Mabanta
Buenaventura Sayoc & De Los Angeles Law Office. Except as otherwise disclosed herein, no
independent counsel has or will receive any direct or indirect interest in the Fund or in any securities
thereof (including options, warrants or rights thereto) or acted or will act as promoter, underwriter,
voting trustee, director or employee of the Fund.

INDEPENDENT AUDITORS

The Financial Statements of the Fund together with the notes thereto have been examined by
Navarro Amper & Associates / Deloitte Touche Tohmatsu (“Deloitte”), independent public
accountants, as indicated in their report with respect thereto and included herein. The reports have
been so included in reliance upon the authority of these experts in giving such reports. Deloitte has
given, and not withdrawn, its consent to the inclusion of these reports as they appear herein.

Deloitte will continue being the external auditors for the Fund. Deloitte will not have any direct or
indirect interest in the Fund or in any securities thereof (including options, warrants or rights thereto)
nor has it acted at any time as promoter, underwriter, voting trustee, director, officer or employee of
the Fund.

INFORMATION WITH RESPECT TO THE REGISTRANT

DESCRIPTION OF BUSINESS

The Fund

The Fund is a Philippine corporation registered as an open-end investment company under R. A.

2629 and R. A. 8799, on December 21, 1999 under SEC Registration No. A199908713. The Fund’s
investment objective is to provide moderate growth and a steady income stream through investments
in high quality equity securities and high quality corporate and government debt securities.

The Fund is part of the Sun Life Prosperity Funds (the “Funds”). The Sun Life Prosperity Funds make
investing simple, accessible and affordable. The Sun Life Prosperity Funds offer a unique “family of
funds” to choose from. The “family of funds” concept allows investors to modify their investment
strategies over time, by letting them transfer from one fund to another, as their needs dictate, as much
as four times a year without paying any fees.

20
Given the nature of the Fund, its revenue is primarily derived from Investment income and is broken
down as follows:

December December
March 2014 2013 2012
Interest Income - Bank deposits 134,577.71 94,903.86 173,839.15
Interest Income – SSA 6,694,983.06 18,670,733.35 173,771.86
Interest Income - Treasury Notes 44,581,835.06 167,234,502.90 148,506,790.80
Interest Income – Treasury Bills 220,430.89
Interest Income - Corp Loan 2,187,300.16
Dividend Income - Common
Stock 96,552,345.74 233,824,998.58 145,227,930.04

Distribution

For a detailed discussion of the Fund’s distribution methods, please refer to the section on “Plan of
Distribution”.

Competition

The Fund principally competes directly with the Unit Investment Trust Funds (“UITFs”) offered by
commercial banks, and other mutual funds in the Philippines in terms of returns and the associated
risks of the return. The Fund’s market strength is its wide distribution network that provides strategic
distribution of Fund shares and the financial stability and reputation of its Investment Company
Adviser, SLAMCI. The Fund intends to compete principally based on the reputation of SLAMCI for
superior investment performance and corporate governance coupled with its distribution network and
superior backroom operations.

The Fund participates in the mutual funds sector which is a sub-sector of the financial services
industry. There are no national geographical boundaries as the nature of the industry and prevailing
technology make it possible for the various players to offer their services to almost any place in the
country.

In terms of net asset value, the group of funds managed by SLAMCI on a consolidated basis is the
second largest in its field. Below are the top three (3) mutual fund companies in the Philippines in
terms of Net Asset Value (NAV) as of 31 March 2014.

Mutual Fund Company/Investment Net Asset Value Market Share

Company Adviser
ALFM Mutual Funds PHP 68,850 Million 47.09%
Sun Life Asset Management Co., Inc. PHP 28,699 Million 19.63%
Philam Asset Management, Inc.* PHP 23,968 Million 16.39%
*Includes GSIS Mutual Fund, Inc.

Below are the top three (3) mutual fund companies in the Philippines in terms of Net Asset Value
(NAV) as of 31 March 2014.

Mutual Fund Company/Investment Net Asset Value Market Share

Company Adviser
ALFM Mutual Funds PHP 97,439 Million 47.62%
Sun Life Asset Management Co., Inc. PHP 41,115 Million 20.09%
Philam Asset Management, Inc.* PHP 32,215 Million 15.74%
*Includes GSIS Mutual Fund, Inc.

21
In its category, the Fund is largest; with ALFM Growth Fund, Inc. and Philam Fund, Inc. holding
significant market positions below the Fund. Below are the top three (3) mutual fund companies in the
Balanced Fund category as of 31 March 2014:

Mutual Fund Company Net Asset Value Market Share*

Sun Life Prosperity Balanced Fund PHP 11,939 Million 8.17%
Philam Fund, Inc. PHP 5,082 Million 3.48%
ALFM Growth Fund, Inc. PHP 4,805 Million 3.29%
*as a percentage of the mutual funds
industry AUM

Below are the top three (3) mutual fund companies in the Balanced Fund category as of 31 March
2014:

Mutual Fund Company Net Asset Value Market Share*

Sun Life Prosperity Balanced Fund PHP 16,234 Million 7.84%
ALFM Growth Fund, Inc. PHP 7,185 Million 3.47%
Philam Bond Fund Inc. PHP 2,480 Million 1.20%
*as a percentage of the mutual funds
industry AUM
.

Transactions with and/or Dependence on Related Parties

SLAMCI is an affiliate of the Fund. It is also the Fund’s Principal Distributor, Transfer Agent and
Investment Company Adviser. For a fuller discussion, please see “Summary of Principal Agreements”
and “Certain Relationships and Related Transactions.”

Investment Objectives and Legal Restrictions

The Fund aims to generate income in Philippine Pesos consistent with prudent management of the
Funds’ assets.

The Fund is governed by the following fundamental investment policies:

1. The Fund shall not issue senior securities.

2. The Fund shall not incur any further debt or borrowing unless at the time of its incurrence or
immediately thereafter there is an asset coverage of at least three hundred percent (300%) for all
its borrowings. In the event that such asset coverage shall at any time fall below three hundred
percent (300%), the Fund shall within three (3) days thereafter, reduce the amount of its
borrowings to an extent that the asset coverage of such borrowings shall be at least three
hundred percent (300%).

3. The Fund shall not participate in any underwriting or selling group in connection with the public
distribution of securities, except its own capital stock.

4. The Fund will generally maintain a diversified portfolio. Industry concentrations may vary at any
time depending on the investment manager’s view on the prospects.

5. The Fund shall not invest more than twenty percent (20%) of its net assets in real estate
properties and developments, subject to investment restrictions and/or limitations under
applicable law, if any.

6. The Fund shall not purchase or sell commodity futures contracts.

7. The Fund shall not make any loan to other persons, or to other interested persons such as the
members of the Board of Directors, officers of the Fund and any affiliates, or affiliated
corporations of the Fund. However, it shall engage in legally permissible lending operations
considered by its Board of Directors to be financially solid and sound.

22
8. The proportion of the Fund’s assets that shall be invested in each type of security shall be
determined from time to time, as warranted by economic and investment conditions.

9. Subscribers are required to settle their subscriptions in full upon submission of their application for
subscriptions.

10. The Fund may use various techniques to hedge investment risks.

11. The Fund will not change its investment objectives without the prior approval of a majority of its
shareholders and prior notice to the SEC.

Policies with Respect to Security Investments

1. Type of securities, which the registrants may invest in, and the proportion of the assets which may
be invested in each such type of security.

The Fund’s objective is to generate as high a level of current income as is considered consistent
with the preservation of capital and general fund liquidity. For purposes of liquidity, regulations
require that each Fund invest a minimum of five percent (5%) of the Fund’s net assets in liquid or
semi-liquid assets, such as:

i. Treasury notes or bills, certificates of indebtedness issued by the BSP which are short-term,
and other government securities or bonds and such other evidence of indebtedness or
obligations, the servicing and repayment of which are fully guaranteed by the Republic of the
Philippines; and

ii. Savings or time deposits with government-owned banks or commercial banks, provided that
in no case shall any such savings or time deposit accounts be accepted or allowed under a
“bearer” or “numbered” account or other similar arrangements.

The Fund expects to invest more than 10% in the aforementioned securities and deposits.

2. Percentage of assets, which the Fund may invest in the securities of any one issuer.

The maximum investment of the Fund in any single enterprise shall not exceed the amount
equivalent to fifteen percent (15%) of the Fund’s net asset value except obligations of the
Philippine Government or its instrumentalities.

3. Percentage of outstanding securities of any one issuer, which the Fund may acquire.

The total investment of the Fund shall not exceed ten percent (10%) of the outstanding securities
of any investee company.

4. Investment in other companies for the purpose of exercising control or management.

The Fund has no intention of exercising control or management over other companies.

5. The Fund shall not purchase from or sell to any of its officers or directors or the officers or
directors of its Investment Adviser, Manager or Distributor or firms of which any of them are
members, any security other than the Fund’s own capital stock.

6. The total operational expenses of the Fund shall not exceed ten percent (10%) of its total
investment fund or total net worth.

7. Until the SEC provides otherwise, the Fund shall not short sell securities or invest in any of the
following:

i. Margin purchases of securities (investment in partly paid shares are excluded),

23
 ii. Commodity futures contracts,
iii. Precious metals, and
iv. Unlimited liability investments such as a general partnership.

8. Minimum investment is PHP5,000.00 while subsequent investment is PHP1,000.00.

9. SEC Memorandum Circular No. 10, series of 2006 requires that investment in bonds and
evidence of indebtedness registered and traded on an organized market in a foreign country
whose issue and issuer borrower are rated at least BBB.

10. Investments in foreign securities shall be in accordance with SEC Memorandum Circular No. 7,
series of 2005, as amended entitled “Guidelines on the Evaluation of Foreign Investments by
Mutual Fund Companies.”

Prevention of Money-Laundering and Terrorist Financing

As part of the Fund’s responsibility for the prevention of money-laundering under the Anti-Money
Laundering Act of 2001 (R. A. 9160), as amended, the Terrorism Financing Prevention and
Suppression Act of 2012 (R.A. 10168) and other relevant rules and regulations, the Fund or an entity
acting on its behalf may require evidence verifying the identity of a prospective purchaser of shares
and the source of the relevant funds. Whether or not such evidence will be required and, if so, the
nature and extent of such evidence will depend on the particular circumstances. The Fund and any
entity acting on its behalf reserve the right to request such information as considered necessary to
verify the identity of a proposed purchaser of shares in each case, and the Fund has absolute
discretion to refuse to accept a subscription for shares in the event of delay or failure in the provision
of any such information required. The Fund and /or relevant government agencies shall immediately
preserve the subject property or funds upon receipt of the notice of a freeze order, in accordance with
the order of the court of competent jurisdiction or the AMLC. The owner or holder of the property or
funds shall be given a copy of the notice of the freeze order.

Compliance with Data Privacy Act of 2012 (Republic Act No. 10173)

To enable the Fund to comply with the requirements of the Data Privacy Act of 2012 (Republic Act
No. 10173), the Fund requires all investors to expressly authorize the Fund to collect, process, use,
destroy his/her personal and sensitive personal information and any information related to him/her
and his/her account as well as its sharing, transfer and/or disclosure to any of the Fund’s branches,
subsidiaries, affiliates, agents and representatives, industry associations and third parties such as but
not limited to outsourced service providers, external auditors, and local and foreign regulatory
authorities in relation to any matter including but not limited to those involving anti-money laundering
and tax monitoring, review and reporting, statistical and risk analysis, provision of any products,
service, or offers made through mail/email/fax/SMS/telephone, customer satisfaction surveys;
compliance with court and other lawful orders and requirements. The Fund further requires the
investors to holds the Funds and SLAMCI free and harmless from any liability that may arise from any
transfer, disclosure, processing, collection, use, storage or destruction of said information.

Compliance with Foreign Account Tax Compliance Act

For purposes of compliance with the Foreign Account Tax Compliance Act (FATCA or Chapter 4 of
the US Internal Revenue Code)particularly, Change in Circumstances (in compliance with the Foreign
Account Tax Compliance Act also known as FATCA or Chapter 4 of the US Internal Revenue Code),
the Fund requires the investors to:

1) Notify the Fund in writing and provide the required details or documents within thirty (30) days from
a change of your circumstances. Change of circumstances means any change in the investor’s
circumstances which results in the Fund being subject to tax reporting and withholding requirements
under local and/or foreign laws applicable to the investor or investor’s property (such as the US
Foreign Account Tax Compliance Act). There is a change of circumstances if there is a change in the
investor’s contact information, identification documents, place of residence, citizenship of the owner or
beneficiary, or other circumstances as defined under applicable laws;

24
2) Failure to accomplish the foregoing gives the Fund the right to exercise any of the following: a)
continue the account on the same terms and conditions; b) continue the investment on the same
terms and conditions and deduct from it any amounts that the Fund has to withhold under the
applicable laws; or c) terminate your account. The right to terminate the account will only be exercised
after the investor have failed to provide the required information within thirty (30) days from written
notice from the Fund and only after the Fund is unable to transfer your policy or take any steps other
than termination in order to comply with applicable laws.

Effect of Existing or Probable Governmental Regulations on The Business

Senate and congressional bills amending R. A. 2629, which is the main law that regulates the mutual
fund industry, have been filed. The most prominent of these are the bills on the proposed Collective
Investment Schemes Law (“CISL”). One of the noteworthy provisions of the CISL bills is the
exemption of mutual fund companies from certain requirements of the Corporation Code as regards
increasing ACS. If passed into law, this would be of possible benefit to the mutual fund companies
which, with their numerous stockholders, find it difficult to obtain the votes of stockholders
representing at least 2/3 of the outstanding capital stock to approve certain corporate actions.
SLAMCI, through PIFA, participates in the hearing and deliberation of the CISL bill. SLAMCI expects
the regulatory environment to improve with the passage of the CISL bill to the benefit of investors.

Employees

The Fund does not employ personnel. Day-to-day operations are carried out by SLAMCI pursuant to
the terms and conditions of the Management Agreement and Distribution Agreement between the
Fund and SLAMCI.

Shareholder’s Privileges

Certain privileges granting reduced sales charge and waivers may be extended by SLAMCI to
qualified investors who will apply for them.

The investor must notify SLAMCI at the time of transaction about his qualification and intention to
avail and apply for specific privileges. Failure to notify SLAMCI ahead of time about his eligibility and
intention to avail will allow SLAMCI to process the transaction subject to normal sales load charges.

SLAMCI reserves the right to approve or deny a shareholder’s application for certain privileges
according to the criteria it has set. These privileges may be revised or discontinued by SLAMCI at
any time.

1. Waiver of Front End Sales Load (Option A) for qualified investors

Front-end zero load may be granted by SLAMCI to former participants in a benefit or retirement
plan, who will convert his mutual fund retirement benefit and contribution into an individual, joint or
ITF account with Sun Life Prosperity Funds. The same benefit may also be granted to
participants of a retirement plan with at least 100 members and PHP5 Million or dollar equivalent
in total asset value or any other requirements or qualifications that may be established by
SLAMCI.

2. Free 10% Back End Redemption

An investor may be entitled to redeem up to 10% of his total shares under Back End without the
application of a redemption fee or DSC subject to certain conditions as established by SLAMCI.
An investor’s free redemption entitlement shall be based on the total number of shares owned
under Option B as of December 31 of the prior calendar year. This privilege may be extended
only to partial redemptions and is not applicable to full redemptions of back-end investments.
Redemption in excess of the allowed 10% will be subject to normal DSC.

25
 This one-time privilege per year is not automatic and should be exercised by the investor. Free
redemption entitlement is not cumulative. Unexercised entitlement cannot be carried forward to
future redemptions within the same year or succeeding calendar years.

If redeemed after five (5) years, the investment shall no longer be subject to any redemption fee.

3. Reduced Sales Charge Plan

Combination Privilege

Investors may qualify for a reduced sales load by combining subscriptions to one or more of
the Sun Life Prosperity Funds, under the following conditions:

1. The total AUM of the investor is at least PHP100,000.00 or its dollar equivalent, and this
can be obtained by adding:
 The current subscription made by the investor and “member/s of the immediate
family”, as defined below; and
 The aggregate net asset value of all the outstanding subscriptions (at the close of
the business day preceding the date of the current subscription) made by the
investor and member/s of the immediate family.

2. The total subscription of the investor is at least PHP100,000.00 or its dollar equivalent,
and this can be obtained by adding:
 The current subscription made by the investor and member/s of the immediate
family; and
 The original value of all previous subscriptions, net of redemptions, made by the
investor and member/s of the immediate family.

3. “Member of the immediate family” is defined as:

 Spouse
 Child
 Grandchild
 Parent
 Sibling
 Grandparents

4. The following accounts are not included for purposes of determining whether an investor
qualifies under this privilege:

 Shares or investments held by an investor through a Retirement Plan/Defined

Benefit Plan or other employer-employee sponsored benefit plan
 Shares held through a Trust Account under Institutional Dealers (account held in
the name of the Financial Intermediary on the investor’s behalf)
 Shares held by Corporations or business establishments of the investors.

This privilege is not automatic and should be exercised by the investor. Investors should
provide all necessary information AT THE TIME OF PURCHASE regarding accounts
eligible to be combined under this plan. Otherwise, SLAMCI will not retroact the privilege.
SLAMCI reserves the right to revise or discontinue this privilege at any time.

Letter of Intent

Investors are given the privilege to purchase “A” shares of a Fund over a 12-month period
and receive the same sales charge as if all shares had been purchased at once. An
investor can use a Letter of Intention (LOI) to qualify for reduced sales charges during the
next twelve (12) months.

26
 Investors may qualify for this privilege if the resulting total is at least PHP100,000.00 or its
dollar equivalent. The calculation of this amount would include as well the investments
made under the Combination Privilege.

When an investor signs the LOI, SLAMCI agrees to charge the investor a reduced sales
charge. The LOI does not obligate the investor to purchase additional shares. However,
upon failure to comply with the LOI at the end of the 12-month period, SLAMCI will redeem
enough shares equivalent to the additional sales charge to reflect the recalculated amount
reflecting the actual purchase level.

SLAMCI will notify the client under this program at least one (1) month prior to the
expiration of the LOI. SLAMCI reserves the right to revise or discontinue this privilege at
any time.

4. Dividends

The Board of Directors of the Fund has the power to fix and determine the amount to be reserved
or provided for declaration and payment of dividends from the Fund’s unrestricted retained
earnings. The amount of such dividends (either in cash, stock, property or a combination of the
foregoing) will depend on the Fund’s profits, cash flows, capital expenditure, financial condition,
and other factors. The existence of surplus profit arising from the operation of the Fund is needed
before a dividend can be declared. The surplus profits or income must be a bona fide income
founded upon actual earnings or profits. Actual earnings or profits shall be the net income for the
year based on the audited financial statements, adjusted for unrealized items, which are
considered not available for dividend declaration.

Cash dividends and property dividends may be declared by the Board of Directors and no
stockholder approval is required. Stock dividends paid on the Offer Shares are subject to approval
by both the Board of Directors and the stockholders representing at least two-thirds (2/3) of the
outstanding capital stock of the Fund at a stockholders’ meeting called for such purpose.
.
Under the Corporation Code, Corporations with surplus profit in excess of 100% of its paid-in
capital stock are required to declare dividends (cash or stock) and distribute it to its stockholders.

Dividends so declared will be automatically reinvested in additional shares on behalf of the

shareholders, without sales charges, at the NAVPS on the payment date established for such
dividends. Shareholders may also elect not to have dividends reinvested and receive payment in
cash, net of tax.

DESCRIPTION OF PROPERTY

The Fund has financial assets in the form of cash and fixed income securities, with additional equity
stock securities. It does not own any real property. As prescribed by SEC rules, all of the Fund’s
assets must be held by the custodian banks as enumerated on the inside back cover of this
Prospectus.

LEGAL PROCEEDINGS

There is no material pending legal proceeding to which the Fund or any of its affiliates is a party or in
which any of its properties are the subject of the proceeding.

MARKET PRICE FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER

MATTERS

Market Information

27
As there is no principal market for mutual funds in the Philippines, the shares of the Fund are traded
over-the-counter. Following are the historical highs and lows of the Fund’s stocks for the past three
(3) years (2013, 2012 and 2011), and 1st quarter of 2014:

2014 2013 2012 2011

HIGH LOW HIGH LOW HIGH LOW HIGH LOW

1st
3.5069 3.3179 3.9334 3.413 3.0512 2.7225 2.6607 2.385
Quarter
2nd
4.1345 3.3481 3.1457 2.9532 2.7638 2.6267
Quarter
3rd
3.7488 3.3146 3.1893 3.0771 2.8455 2.3996
Quarter
4th
3.6631 3.3354 3.4131 3.1674 2.7282 2.4496
Quarter

The Fund’s common stocks are available through SLAMCI as the Fund’s Principal Distributor. More
particularly, these stocks will be sold by SLAMCI’s registered representatives and eligible securities
dealers.

Holders

As of May 31, 2014, the Fund had 32,191 shareholders and 4,745,487,578 common shares
outstanding.

Top Twenty (20) Shareholders

On 7 March 2013, SEC en banc approved the confidential treatment of the list of Top 20 shareholders
of the Fund, including its 5% and 10% beneficial owners. This is to protect the investors’ privacy,
which is a privilege they enjoy when they invest in other shared investment vehicles, such as unit
investment trust funds, and when they invest in bank deposits.

Dividends

The Fund has not declared cash or stock dividends to date, but it has no restrictions that may limit its
ability to pay dividends in the future.

MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The Company was able to meet all its monetary obligations to its shareholders (for redemption) and
creditors for the period covered. It does not foresee any event that could trigger a direct or contingent
financial obligation that is material to its operations.

No material off-balance sheet transactions, arrangements, obligations (including contingent

obligations), and other relationships of the Company with unconsolidated entities/other persons were
created during the reporting period. There are also no known trends, events, or uncertainties that
have had or that are reasonably expected to have a material favorable or unfavorable impact on net
sales/revenues/income from continuing operations and liquidity.

There are no significant elements of income that did not arise from the Company’s continuing
operations.

MATERIAL CHANGES IN THE 1ST QUARTER FINANCIAL STATEMENTS

The net assets of the Company slightly increased by 4% from PHP16.2 Billion in December 2013 to
PHP16.9 Billion in March 2014. The increase mainly came from additional subscriptions of Authorized
Capital Stock (ACS) for the period.

28
Net investment profit for the period Q1 2014 reached PHP602Million; PHP1.3Billion decrease from
same period last year’s gain of PHP1.9 Billion. The decline was mainly due to unrealized loss 28
recognized for the period. Higher Management fees, custodian fees, transfer fees and regulatory filing
fees also contributed to the decrease.

Statement of Financial Position - March 31, 2014 vs. December 31, 2013

Cash decreased from PHP157 Million to PHP73 Million or by 54% but liquidity requirements are still
met.

Financial Assets at Fair Value through profit or loss increased by 10% from PHP15.1 Billion in
December 2013 to PHP 16.6 Billion in March 2014. The increase mainly came from subscriptions of
ACS that were invested into debt and equity securities.

Receivables decreased by 48% from PHP1 Billion to PHP 503 Million mainly due to amounts
outstanding from broker on investment in listed equity securities sold on or before reporting period,
which are settled three (3) days after the transaction date.

Other Current Asset pertains to prepayments advanced by SLAMCI for expenses incurred by the
Fund for the period.

Accounts Payable and Accrued Expenses went up significantly from PHP 3.7 Million to PHP254
Million. This is attributable mainly to the increase of payable to various brokers due to increase in
investment activity for the period. Also contributed to the increase is the withholding tax in
management fees which were remitted to the Bureau of Internal Revenue the following month.

Payable to Fund Manager decreased by 9%due to lower expenses for the period incurred by the
Fund which were initially paid by SLAMCI, other than management fees and transfer fees.

Statement of Comprehensive Income For three months ended – March 31, 2014 vs. March 31,
2013

Decrease in Revenues by PHP642 Million (93%) from PHP691 Million to PHP 49 Million was mainly
due to Realized Loss from Sale of Stock incurred for the period.

Increase in Operating Expenses of PHP22 Million (27%) from PHP81 Million to PHP103 Million was
mainly due to higher Management Fees brought by higher AUM for the period. Higher Regulatory
filing fees, Custodian and Transfer Fees also contributed to the increase.

Net profit of PHP 602 Million incurred in the current period was PHP1.3Billion (68%) lower compared
to PHP1.9 Billion income in the same period last year. Decrease was mainly attributable to the
recognition of lower unrealized gain on fixed income investments and stocks for the period.

Statement of Changes in Equity

Total equity registered an increase of 4% from PHP16.2 Billion in December 2013 to PHP16.9 Billion
in March 2014.

ANALYSIS COVERING THE CALENDAR YEARS 2012-2013

The Fund registered 36% growth in net assets from PHP 11.9 Billion in 2012 to PHP 16.2 Billion in
2013. Increase mainly came from acceptance of Deposits for Future Subscriptions (DFFS).

Net loss incurred for the year was PHP883 Million, which is lower by PHP3.1 Billion compared to the
net profit of PHP2.3 Billion achieved in the same period last year. The decrease was mainly due to
the recognition of unrealized market loss on fixed income investments and investment in listed stocks.

29
MATERIAL CHANGES IN THE 2013 FINANCIAL STATEMENTS

Statement of Financial Position

Cash increased by PHP 93 Million from PHP64 Million to PHP157 Million mainly due to acceptance of
DFFS.

Financial Assets at Fair Value through profit or loss increased by 30% from PHP11.6 Billion to
PHP15.1 Billion. The increase came from the DFFS that were invested into debt and equity securities.

Due from Brokers increased by PHP615 Million from PHP371 Million in 2012 to PHP986 Million in
2013 mainly due to amounts outstanding from broker on investment in listed equity securities sold on
or before reporting period, which are settled three (3) days after the transaction date.

Dividends Receivable balance significantly increased from PHP755 Thousand in 2012 to PHP6.6
Million in 2013 due to Cash dividends declared which are usually paid one month after record date.

Due from related parties refers to deposits of investors for Mutual Funds subscriptions that were
inadvertently deposited to other companies of Sun Life. Said deposits were remitted to the Fund after
the reporting date.

Accrued Expenses significantly went down by 96% from PHP 92 Million to PHP3.7 Million. This is
attributable mainly to the decrease of payable to various brokers. Due to Brokers account pertains to
purchases of investments in listed equity securities processed on or before the reporting period, which
are settled three days after the transaction date.

Payable to Fund Manager increased by 42% from PHP29 Million to PHP41 Million due to higher
management fees brought about by higher AUM for the period.

Statement of Comprehensive Income

Revenues slightly decreased by PHP58 Million (4%) from PHP1.57 Billion to PHP 1.62 Billion due to
lower Trading Gain from Fixed Income Investment for the period.

Total Operating Expenses increased by PHP177 Million (64%) from PHP276 Million in 2012 to
PHP452 Million in 2013. The increase was mainly due to higher Management Fees, Commissions,
Regulatory Fees and expenses related to Annual Stockholders’ Meeting.

Net loss of PHP 883 Million incurred in the current period was PHP3.1 Billion (139%) lower compared
to the income of PHP2.3 Billion last year. Decrease was mainly attributable to recognition of
unrealized loss on fixed income investments and stocks.

Statement of Changes in Equity

Total equity registered an increase of 36% from PHP 12 Billion in 2012 to PHP 16 Billion in 2013.

MATERIAL CHANGES IN THE 2012 FINANCIAL STATEMENTS

The Fund registered 38% growth in net assets from PHP 8.7 Billion in 2011 to PHP 11.9 Billion in
2012. Increase came mainly from issuance of redeemable shares and from increase in net investment
income inclusive of unrealized appreciation of equity and fixed income holdings.

Gross investment income in 2012 was PHP1.5 Billion as the Fund had cashed in on gains from the
stock market resulting in an increase in gross investment income from the PHP1.2 Billion posted in
the same period last year. With the further recognition of unrealized gains from the marked-to-market
valuation of the Treasury Notes and investment in listed equities amounting to PHP1 Billion, total
profit for 2012 increased to PHP2.3 Billion from the PHP322 Million profit posted in 2011.

Cash increased by 19% to meet the Fund’s liquidity requirements.

30
Increase in Financial assets at fair value through profit or loss was mainly due to additional purchases
for the period.

Due from brokers account refers to amounts receivable from brokers arising from the sale of
investments processed on or before reporting period, which are settled three (3) days after the
transaction date. Balance increased due to increase in sale of investments for the period.

PHP 4Million of Dividends receivable in 2011 have been paid during the year while PHP755
Thousand of receivable in 2012 is to be paid in 2013. Other current assets consist of minimum
corporate income tax (MCIT) and other prepaid taxes on fixed income investments.

The entire loan receivable amounting to PHP50 Million in 2011 was predominated in 2012.

Increase in Accrued Expense Payable was mainly due to increase in Due to Brokers account.
Payable to Fund Manager increased by 16% due to higher unpaid management fees for the period
brought about by the higher AUM.

Top 5 Key Performance Indicators for the year ending 31 December 2013 and the period
ending 31 March 2014.

The performance of a fund is important to its investors. Oftentimes, it is used when making
investment decisions. That is why Key Performance Indicators (KPI), a set of quantifiable measures,
is necessary to gauge its performance in terms of meeting the Fund’s investment objective while
consistently following its investment policy. The following are the top 5 KPIs related to the Fund:

1. Total Return. The performance of a mutual fund is always expressed in terms of its total return,
which is the sum of the change in a fund's net asset value (NAV), its dividends and its capital
gains distributions over a given period of time, net of its expenses.

2. Market Conditions. A fund's true performance potential needs to be evaluated within the context
of the market environment prevailing during the different periods used.

It is most relevant to investors to measure the performance of a fund within a 5-year time frame
as it will most likely cover a mix of market conditions that may be translated into a more reliable
long-term indicator of the fund manager’s investment management abilities.

3. Benchmarks. Benchmarking is one of the most important aspects of a mutual fund's total return
performance. a fund's performance metrics only have meaning if they are compared to
appropriate "guideposts," or benchmarks.

As for the Fund, considering that it is invested in high-quality debt instruments issued by the
Republic of the Philippines and prime Philippine companies,, its performance is measured against
45% PSEi + 45% HSBC Liquid Bond Index + 10% 30-day Special Savings Account (SSA).

The PSEi is the main index of the PSE and is the most watched index among the six PSEi Series.
It measures the relative changes in the free float-adjusted market capitalization of the 30 largest
and most active common stocks listed at the PSE, thereby providing an overview of the market’s
overall condition.

The HSBC Liquid Bond Index is designed as a replicable benchmark tracking the return of fixed-
rate, straight, Philippine peso-denominated liquid bonds issued by the Philippine government.
Among others, to ensure liquidity of an index constituent, it should have a minimum outstanding
amount of Php 3 billion, with a minimum one year remaining maturity.

The following table shows how the Fund performed vis-à-vis the PSEi and the HSBC Liquid Bond
Index.

31
 Total Return

Benchmark: 45% PSEi + Sun Life of Canada

45% HSBC Liquid Bond Prosperity Balanced Fund
Index + 30-day SSA
5-Year Return 52.3% 57.4%
3-Year Return 59.7% 70.4%
1-Year Return 19.6% 25.9%
YTD Return* 19.0% 25.4%

*As of 31 March 2014

Benchmark: 45% PSEi + Sun Life of Canada

45% HSBC Liquid Bond Prosperity Balanced Fund
Index + 30-day SSA
5-Year Return 124.2% 103.6%
3-Year Return 34.5% 28.4%
1-Year Return 4.0% -0.7%
YTD Return* 3.8% -1.4%

*As of 31 March 2014

The benchmark may be changed by the Fund’s Board of Directors from time to time.

4. Peer Comparisons. Mutual funds are also compared to their peers, or peer groups, and relevant
fund categories. For example, it is common for investment research materials to compare a bond
fund, like the Fund, to funds similar in nature (peers or peer group). While this information is
made available to the Fund’s investors, the same may be found in the website of the PIFA at
www.pifa.com.ph.

5. Asset Size. Open-ended mutual funds grow their asset size in two ways:

i. Increase in the value of the underlying assets as a result of the strong performance of equity
securities and/or bonds in the fund's portfolio. When the underlying assets in a portfolio
increase in value, the fund's asset size increases.
ii. The inflow of investors' money. This is why a fund's asset size will continue to grow even if it
has a negative return.

The increase in a fund’s asset size signifies solid fund management skills which, combined with
favorable market conditions backed by a strong economic outlook, illustrates how effectively a
fund manager has performed and the extent to which value has been added through active
management.

The second indicates investor confidence in the fund manager, the Fund, or both.

Most analysts check whether the performance of a mutual fund is attributable to personnel who
have since left the fund. While there is no magic number when it comes to fund manager tenure, it
should provide some investor comfort to know that with respect to the Fund, the Fund Manager
and the Fund’s top management have been with the Fund for at least five (5) years. Furthermore,
SLOCPI having been in the business for decades combined with a record of consistent strong
performance indicates a stability and resilience capable of withstanding the different stages of the
business cycle.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURES

There has been no disagreement with Deloitte on any accounting and financial disclosures.

32
Audit and Audit-Related Fees

The audit fees for the calendar years 2011, 2012, and 2013 are PHP 609,344, PHP 172,390, and
PHP 383,544, respectively. These fees pertain to the audit of the financial statements of the Fund in
relation to statutory and regulatory filings.

There are no other assurance and related services rendered by the external auditor for the last two
fiscal years that are reasonably related to the performance of the audit of the Fund’s financial
statements.

Tax Fees

There are no professional services rendered by the external auditor for the last two fiscal years for tax
accounting, compliance, advice, planning and any other form of tax services.

All Other Fees

There are no other fees billed by the external auditor for any other products and services for the last
two fiscal years.

The Fund’s Audit and Compliance Committee reviews the client service plan and service fee
proposal presented by the external auditor and recommends such for the approval of the Board of
Directors, if found acceptable.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Directors and Executive Officers

The Board of Directors is responsible for conducting all the businesses of the Fund. It shall exercise
general supervision over the duties performed by the Investment Company Adviser, Distributor,
Transfer Agent and Custodian of the Fund.

The Fund has five (5) directors, all of whom must be pre-screened and shortlisted by the Fund’s
Nomination Committee in accordance with the qualifications and disqualifications set forth in the
Fund’s Manual on Corporate Governance prior to their election. All elected directors hold office for
one (1) year until their successors are elected annually by the stockholders during the annual meeting
or adjournment thereof, or at any special meeting called for that purpose.

The following are the Fund’s current directors and executive officers:

Rizalina G. Mantaring Chairman & Director

Ma. Karenina M. Casas President4 and Director
Nilo B. Peña Director
Melito S. Salazar Independent Director
Aleli Angela G. Quirino Independent Director
Jemilyn S. Camania Corporate Secretary
Maria Cecilia V. Soria Assistant Corporate Secretary
Hong Thiam Ong Treasurer
Anna Eliza R. Bustos-De Leon Acting Compliance Officer

All of the above directors and officers are Filipino citizens. Below is a description of each
director/officer’s business experience during the last 5 years.

RIZALINA G. MANTARING
Director/Chairman (27 June 2007 to present)

4 Effective 01 January 2013

33
Ms. Mantaring, 54, Filipino, is currently the Chairman of the 8 Sun Life Prosperity Funds i.e., Sun
Life of Canada Prosperity Bond Fund, Inc., Sun Life of Canada Prosperity Balanced Fund, Inc.,
Sun Life of Canada Prosperity Philippine Equity Fund, Inc., Sun Life Prosperity Dollar Advantage
Fund, Inc., Sun Life Prosperity Dollar Abundance Fund, Inc., Sun Life Prosperity GS Fund, Inc.,
Sun Life Prosperity Money Market Fund, Inc. (2009 to present), and Sun Life Prosperity Dynamic
Fund (2012 to Present). She is also the Chairman of the Grepalife Dollar Bond Fund Corporation,
Grepalife Bond Fund Corporation, and Grepalife Fixed Income Fund Corporation (“Grepalife
Funds”) (2011 to present). She serves as the President & CEO of Sun Life of Canada
(Philippines), Inc. (“SLOCPI”) (2009 to present), Sun Life Financial Plans, Inc. (“SLFPI”) (2009 to
present) and, a director of the Sun Life Asset Management, Inc. (“SLAMCI”) (2007 to present).
Prior to the foregoing, Ms. Mantaring was Deputy President of the Sun Life Financial Philippines
group of companies (2009) and Regional Chief Operations Officer of Sun Life Financial Asia (2008
to 2009). She also served as Chief Operating Officer of SLOCPI (1999 to 2008) and Information
Systems Head, Asia Pacific Division of the Sun Life Assurance Company of Canada (1992 to
1999). Ms. Mantaring received her Bachelor of Science in Electrical Engineering (cum laude) from
the University of the Philippines and Master of Science in Computer Science from the State
University of New York at Albany. She is also a Fellow, Life Management Institute (with distinction)
and Associate, Customer Service (with honors).

MA. KARENINA M. CASAS

President (January 2013 to present) Director (2009 to present)

Ms. Casas, 50, Filipino, is currently the President and Director of the Sun Life of Canada
Prosperity Money Market Fund, Inc., Sun Life Prosperity GS Fund, Inc., Sun Life Prosperity Dollar
Advantage Fund, Inc., and Sun Life Prosperity Dollar Abundance Fund, Inc. (2009 to present), and
the Grepalife Funds (2011 to present). She is also a member of the Board of Trustees of Sun Life
Financial – Philippines Foundation, Inc. (2009 to present). Ms. Casas also served as President of
the abovementioned Funds (2009) as well as of Sun Life of Canada Prosperity Balanced Fund,
Inc. (2009), Sun Life Prosperity Dynamic Fund, Inc. (2012) and Sun Life of Canada Prosperity
Philippine Equity Fund, Inc. (2009). She is currently the Chief Administration Officer (2006 to
present) of the Sun Life Financial Philippines group. She graduated with a BS Psychology degree
from the Ateneo de Manila University. Ms. Casas also holds the designation of Professional,
Customer Service and Associate, Customer Service.

NILO B. PEÑA
Director (20 May 2005 to present)

Atty. Peña, 76, Filipino, is a Director of the Sun Life of Canada Prosperity Philippine Equity Fund, Inc.
(2005 to present) and Sun Life of Canada Prosperity Balanced Fund, Inc. (1999 to present). He has
actively and continuously engaged in the practice of law with the law firm Quasha Ancheta Peña &
Nolasco (originally William H. Quasha & Associates), first as an underbar in 1960 and currently as a
Senior Partner. He is a member of the Boards of Trustees of the St. Luke’s Medical Center, Inc. (1996
to present) and St. Luke’s College of Medicine (2004 to present). He also serves as Chairman of the
Board of Trustees of the Standard Chartered Bank Employees’ Retirement Fund (1992 to present).
Atty. Peña serves as a director of SLMC Bonifacio Global City MAB Corp. (2005 to present) and as
Corporate Secretary of QBE Insurance (Philippines), Inc. (1998 to present) and Marsh Philippines,
Inc. (1998 to present). He also has the distinction of having served as Bar Examiner in Mercantile Law
during the 1997 and 2006 Bar Examinations. Atty. Peña received his AA and Bachelor of Laws from
the University of the Philippines.

MELITO S. SALAZAR
Independent Director (20 June 2014 -present)

Mr. Melito S. Salazar Jr., 64, Filipino, is an independent Director of Sun Life of Canada Prosperity GS
Fund, Inc., Sun Life of Canada Prosperity Philippine Equity Fund, Inc. and Sun Life of Canada
Prosperity Balanced Fund, Inc. He is currently the Chairman of the Chamber of Commerce of the
Philippines Foundation and of the Inter-Asia Development Bank (2011 to present). Among his other
positions are: Vice-Chairman of the (Philippine Veterans Bank) PVB Card Inc. (January 2014 to
present); Vice- President of the Manila Bulletin (2006 to present) and Dean of Centro Escolar
University (June 2014 to present). Prior to these posts, he served as a Monetary Board Member of the

34
Bangko Sentral ng Pilipinas (1999 to 2005), President of the Management Association of the
Philippines (2013), President of the Financial Executive Institute of the Philippines (2005), and
Chairman of the Chambers of Philippine Islands (2009 to2012). Mr. Salazar is a BSBA and MBA 34
graduate of the University of the Philippines and attended executive education and training programs
at the Harvard Business School, Massachusetts Institute of Technology, University of North Carolina,
Chapel Hill and INSEAD in France.

ALELI ANGELA G. QUIRINO

Independent Director (2000 to present)

Atty. Quirino, 68, Filipino, is also an Independent Director of Sun Life Prosperity Money Market Fund,
Inc. (2004 to present), Sun Life of Canada Prosperity Bond Fund, Inc. (2000 to present), Sun Life
Prosperity Dynamic Fund, Inc. (2012 to present), Grepalife Bond Fund Corporation (2011 to present),
Grepalife Fixed Income Fund Corporation (2011 to present)and Grepalife Dollar Bond Fund
Corporation (2011 to present). She is currently Of Counsel of Angara Abello Concepcion Regala &
Cruz Law Offices (ACCRA Law) (2010). She also serves as Director-Treasurer of SysNet Integrators,
Inc. (2001 to present), EP2, Inc. (2003 to present), Ideawurx Inc. (2001 to present), Intellectual
Property Foundation, Inc. (1998 to present), Vani-Txt, Inc and ELC Beauty and Inc./Estee Lauder
(Phils.). She also serves as a Director and Corporate Secretary of Fila Philippines, Inc. (1993 to
present), Anglo-Eastern Crew Management (Phils.), Inc. (1999 to present), Hazama Philippines, Inc.
(1995 to present), LNC (SPV)-AMC Corp. (2005 to present), LNC 3 Asset Management, Inc. (2006 to
present), Plaka Athena Holdings Corporation (2005 to present) and New Pacific Resources
Management (SPV-AMC), Inc. (2007 to present). She is the Chairman of the Intellectual Property
Association of the Philippines (2009 to present), President of the Ateneo Law Alumni Foundation, Inc.
(2008 to present) and Trustee-Corporate Secretary of Assumption College, Inc. (1996 to present).
Atty. Quirino received her Bachelor of Arts and Bachelor of Science in Education (magna cum laude)
from Assumption College and Bachelor of Laws (with honors) from the Ateneo de Manila University.

HONG THIAM ONG

Treasurer (6 September 2013 to present)

Mr. Ong, 39, Malaysian, is the Treasurer of the 8 Sun Life Prosperity Funds (September 2013 to
present) and SLAMCI (September 2013 to present). He is also the Chief Financial Officer of SLOCPI
(April 2013 to present). Prior to joining the aforementioned companies, he was the Chief Financial
Officer of NXP Semiconductors (May 2011 to September 2012) and Microsoft Corporation in the
Philippines (July 2007 to September 2010), Business Controller of Microsoft Operations Pte. Ltd. (July
2005 to June 2007) and Finance Controller of Philips Electronics in Singapore (June 1999 to May
2005). Mr. Ong has a Bachelor of Business (Accounting) from Monash University in Australia and is a
qualified Certified Public Accountant.

JEMILYN S. CAMANIA
Corporate Secretary (2005 to present)

Atty. Camania, 38, Filipino, is also the Corporate Secretary of SLOCPI (2010 to present), SLFPI (2010
to present), SLAMCI (2005 to present), Sun Life Financial Philippine Holding Company, Inc. (2012),
Sun Life Financial - Philippines Foundation, Inc. (2012), the 7 Sun Life Prosperity Funds (2005 to
present), Grepalife Asset Management Corporation (2011 to present), Great Life Financial Assurance
Corporation (2012), and the 3 Grepalife Mutual Funds (2011 to present). She also serves as Assistant
Corporate Secretary of Sun Life Grepa Financial, Inc. (2012). She started at Sun Life as Assistant
Counsel (2004) and is currently a Senior Counsel (2011 to present). Prior to joining Sun Life, she
worked as an Associate at the Cayetano Sebastian Ata Dado & Cruz Law Offices (2001 to 2004).
Atty. Camania received her Bachelor of Arts in Psychology (1996) and Bachelor of Laws (2001) from
the University of the Philippines, Diliman. She was called to the Bar in 2002. She is also a Fellow, Life
Management Institute (2010) and Professional, Customer Service (with honors) (2011) of the Life
Office Management Association (LOMA).

MARIA CECILIA V. SORIA

Assistant Corporate Secretary (6 September 2013 to present)

Atty. Soria, 37, Filipino, is the Assistant Corporate Secretary of the 8 Sun Life Prosperity Funds

35
(September 2013 to present), and the Grepalife Funds (September 2013 to present). Prior to joining
these companies, she worked as Associate, later promoted to Senior Associate, at Tan Venturanza
Valdez (May 2010 to August 2013), as Senior Associate at Reyes-Fajardo and Associates (2009 to
35 2010) and SGV & Co. (2008 to 2009), as Associate at Medialdea Ata Bello & Guevarra (2007-
2008), and as Executive Assistant 6 at the Civil Service Commission (2006-2007) . Atty. Soria
received her Bachelor of Arts in Political Science and Bachelor of Laws from the University of the
Philippines. She was admitted to the Philippine Bar in May 2007.

ANNA ELIZZA BUSTOS-DE LEON

Acting Compliance Officer (May 2014-present)
Compliance Manager (March 2013-present)

Atty. Bustos-De Leon, 37, is the acting compliance officer of SLOCPI, SLFPI, SLAMCI, the 8 Sun Life
Prosperity Funds, Sun Life Grepa Financial, Inc., GAMC, Great Life Financial Assurance Corporation,
and the 3 Grepalife Mutual Funds since May 2014. Atty. Bustos-De Leon started working with Sun
Life on March 4, 2013 as Compliance Manager. Before joining Sun Life, she was the Distribution
Compliance Officer of Philippine Axa Life Insurance Corporation(January 2008-March 2013). In
Philippine Axa Life, she was also appointed as Data Privacy Officer, Anti-Money Laundering Officer
and Fraud Control Officer. She also worked as an Associate Lawyer at Roco Kapunan Migallos Perez
and Luna Law Offices (April 2002-July 2006) and as a Senior Associate Lawyer at Kapunan Lotilla
Flores Garcia and Castillo Law Offices (August 2006-December 2007). Atty. Bustos-De Leon obtained
her Bachelor of Science Degree Major in Legal Management (March 1997) and Juris Doctor Degree
(April 2001) from Ateneo De Manila University and Ateneo Law School, respectively. She passed the
Philippine Bar Examinations administered in September 2001 and was admitted to the Philippine Bar
in May 2002.

Incorporators

The following are the incorporators of the Fund:

1. Mr. Caesar P. Altarejos, Jr.

2. Mr. Henry Joseph M. Herrera
3. Mr. Raoul Antonio E. Littaua
4. Ms. Rizalina G. Mantaring
5. Ms. Esther C. Tan
6. Mr. Rolando Robles

Significant Employees

There is no “significant employee” as defined in Part IV (A) (2) of SRC Rule 12 (i.e., any person who
is not an executive officer of the corporation but who is expected to make a significant contribution to
the business)

Family Relationships

None of the current directors or officers is related to each other up to the 4th civil degree of affinity or
consanguinity.

Involvement in Certain Legal Proceedings

None of the directors or executive officers of the Fund has been involved during the past five (5) years
in any legal proceeding which is material to an evaluation of their ability or integrity to serve as such,
including, bankruptcy petition, conviction by final judgment, domestic or foreign criminal proceeding,
being subject to any order, judgment or decree, or violation of a securities, banking or commodities
law.

COMPLIANCE WITH LEADING PRACTICES ON CORPORATE GOVERNANCE

All of the directors and officers of the Fund have attended seminars on corporate governance given
by an SEC-accredited provider. The Board reviews and updates its Manual on Corporate

36
Governance (“Manual”) at least annually to ensure that it is kept abreast of global leading practices
and principles on good corporate governance. At least annually, the directors accomplish a Board
Effectiveness Questionnaire to determine their level of compliance, as well as top management’s.
There have been no deviations from the Manual.

EXECUTIVE COMPENSATION

The Fund’s executive officers and directors who are officers and/or employees of SLOCPI and/or
SLAMCI do not receive any form of compensation as such from the time of their appointments up to
the present.

The Fund’s directors who are not officers and/or employees of SLOCPI and/or SLAMCI (i.e.,
“Independent Directors”) receive a per diem for their attendance at regular or special meetings of the
Board at the rate of PHP20,000.00 per meeting per Independent Director (the Fund has two [2]
Independent Directors). There are no other forms of compensation which such Independent Directors
are entitled to receive for meetings attended, other than said per diem and a retainer’s fee not to
exceed PHP15,000.00 per quarter. Payment of such retainer’s fee shall be shared by the Fund with
the other Sun Life Prosperity Funds which the Independent Director also serves, provided that each
Independent Director shall receive only a maximum of PHP15,000.00 per quarter from all the Sun Life
Prosperity Funds combined. There are no standard arrangements, employment contracts,
termination of employment, change-in-control or other arrangements with the directors. Such
remuneration to be paid for by the Fund may be adjusted in the future as may be warranted by
existing fund levels and other factors.

Total actual per diem received by the Fund’s Independent Directors for years2013, 2012,and 2011
which includes the retainer’s fee were PHP 365,000.00, PHP 308,750.00,and PHP 367,500.00,
respectively. For year 2014, in which there will be at least four (4) Board meetings, the Fund forecasts
a total Independent Directors’ per diem of at least PHP 240,000.00 and a total of PHP 68,750.00 as
retainer’s fee.

SECURITY OWNERSHIP OF CERTAIN RECORD AND BENEFICIAL OWNERS AND

MANAGEMENT

Security Ownership of Certain Record and Beneficial Owners as of 30 May 2014

As of May 30, 2014, there is no person or group of persons who owns more than 5% of the securities
of the fund, either of record or as a beneficial owner.

Security Ownership of Management as of 30 May 2014

Number
Title of Name of Beneficial Nature of Percent
of Citizenship
Class Owner Ownership of Class
Shares
Beneficial (B) and
Common Rizalina G. Mantaring 1 Filipino 0.00%
Record ('R)
Common Ma. Karenina M. Casas 1 B&R Filipino 0.00%
Common Aleli Angela G. Quirino 1 B&R Filipino 0.00%
Common Jose M. Faustino 1 B&R Filipino 0.00%
Common Nilo B. Peña 1 B&R Filipino 0.00%

Voting Trust Holders of 5% or More

No holder of five percent (5%) or more of the Fund’s common shares has a voting trust or similar
agreement that vests voting rights or other powers to a voting trustee.

Changes in Control

37
There has been no change in control of the Fund since the beginning of the last fiscal year. There is
no arrangement which may result in a change in control of the registrant.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Following are the interlocking directors and officers of SLAMCI and the Fund:

Director/Officer Fund SLAMCI

Rizalina G. Mantaring Chairman and Director Director
Valerie N. Pama Director President
Jemilyn S. Camania Corporate Secretary Corporate Secretary
Maria Cecilia V. Soria Assistant Corporate Secretary Assistant Corporate Secretary
Hong Thiam Ong Treasurer Treasurer
Anna Elizza R. Bustos-De Acting Compliance Officer Acting Compliance Officer
Leon

Other than these interlocking directors and officers, management and members of the Board of
Directors of the Fund are not involved in any companies that the Fund deals with.

SUMMARY OF PRINCIPAL AGREEMENTS

Following is a summary of the material terms of the principal agreements related to the business of
the Fund and should not be considered to be a full statement of the terms and provisions of such
agreements. Accordingly, the following summary is qualified by reference to each agreement and is
subject to the full text of each agreement.

MANAGEMENT AGREEMENT

The Fund and SLAMCI entered into a Management Agreement on 30 September 2008 in order for
SLAMCI to provide certain services to the Fund, such as: investment and re-investment of the assets,
preparation and submission of such information and data relating to the Fund; coordination of the
activities; preparation of reports, circulars and notices and other information as may be required;
representation with government offices; accounting, bookkeeping, clerical and other administrative
facilities; provision of office space and other administrative facilities to the Fund; and carrying out of
due diligence with respect to any broker through whom the Fund deals in the conduct of its
investment operations.

The Management Agreement is presented annually to the Board of Directors for its approval.

SLAMCI may, without need of prior approval of or prior notification to the Fund, purchase and sell
securities or make other investments for the account of the Fund, within the limits of the Fund’s
investment objectives, policies or guidelines and subject to the provisions of R. A. 2629.

The Fund agrees to pay SLAMCI an annual fee of 1.00% of AUM, provided that in no case may the
total compensation to SLAMCI exceed any maximum limit under R. A. 2629.

DISTRIBUTION AGREEMENT

The Fund and SLAMCI executed a Distribution Agreement notarized on 30 September 2008 in order
for SLAMCI to act as Principal Distributor and sell shares on a best efforts basis of the capital stock of
the Fund at a public offering price equal to the NAVPS in effect at the time of the sale and the sales
commission payable to SLAMCI. The Distribution Agreement is presented annually to the Board of
Directors for its approval.

The Fund agrees to pay SLAMCI an annual fee of 1.00% of AUM, provided that in no case may the
total compensation to SLAMCI exceed any maximum limit under R. A. 2629.

38
TRANSFER AGENCY AGREEMENT

The Fund and SLAMC have executed a Transfer Agency Agreement notarized on 14 April 2010 for
SLAMC to perform transfer agency services for the Funds. This agreement became effective on 01
March 2010 and shall be deemed automatically renewed every year thereafter, unless SLAMCI or the
Fund shall have notified the party in writing at least sixty (60) days prior to the intended effective date
of termination of its intention not to renew the agreement.

The Fund agrees to pay to SLAMCI, as compensation for the latter’s services and facilities, an annual
fee equivalent to fifteen (15) basis points (0.15%) of AUM. Provided, however, that in no case may the
total compensation to SLAMCI exceed any maximum limit prescribed under the law, rule and/or
regulations.

CUSTODY AGREEMENTS

All proceeds from the sale of shares/securities, including the original subscription/payments at the
time of incorporation constituting the paid-in capital of the Fund shall be held by the designated
custodian banks.

INSTRUMENTS OR STATEMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS

There are no instruments defining the rights of security holders, including indentures as well as any
documents or statements to security holders. There are likewise no published reports regarding
matters submitted to the vote of security holders.

TAXATION

Investors are advised to consult their own professional advisers as to the tax implications of
subscribing for, purchasing, holding, and redeeming shares of the Fund. Section 32 (B) (7) (H) of the
Philippine Tax Code excludes from gross income gains realized from redemption of shares in mutual
funds, making such gains exempt from income tax. Mutual funds are eligible investment products
under R. A. 9505 or the “Personal Equity and Retirement Account (PERA) Act of 2008” and qualified
mutual fund investments under said law would entitle the investor to certain tax benefits. Tax related
laws, rules and regulations are factors that are subject to rapid change and which could detrimentally
affect the performance of the Fund.

39
 EXHIBIT 1

DETAILS AND COMPUTATION OF SALES LOADS / REDEMPTION FEES

OPTION A - FRONT-END
Sales Load Rate
PESO FUNDS
(Excluding VAT)
Less than P100k 2.00%
P100k to less than P1M 1.50%
P1M to less than P5M 1.00%
P5M and up 0.50%

For shares subscribed from September 1, 2011 and onwards

OPTION B - BACK-END

Redemption on DSC based on market value at the

time of redemption (Excluding VAT)

1st year 5.00%

2nd year 4.00%
3rd year 3.00%
4th year 2.00%
5th year 1.00%
Beyond 5 years None

For shares subscribed prior to September 1, 2011

BACK-END

Redemption on DSC based in market

OPTION B value at the time of
redemption (Excluding
VAT)
1st year 5.00%
2nd year 4.00%
3rd year 3.00%
Below PHP 5 Million
4th year 2.00%
5th year 1.00%
Beyond 5 years None
1st year 4.00%
2nd year 3.00%
PHP 5 Million < PHP 3rd year 2.00%
20 Million 4th year 1.00%
Beyond 4 years None

OPTION C Redemption within the Redemption within the

1st year (Excluding 2nd year (Excluding
VAT) VAT)

< PHP 20 Million 1.00% 0.50%

40
PHP 20 Million and 0.50% 0.25%
up
If redeemed after two (2) years, the investment
shall no longer be subject to a redemption fee.

41