TORONTO (Bloomberg) — Sun Life Financial Inc., Canada's second-largest insurer, said third-quarter profit increased 26 percent to a record, led by its US money manager MFS Investment Management.Net income climbed to C$541 million ($482 million), or 94 cents a share, from C$430 million, or 74 cents, a year earlier, the Toronto-based company said.

Higher institutional fund sales and a rally in stocks boosted earnings at Boston-based MFS by 26 percent to C$58 million. Sun Life said on October 23 it plans to keep MFS after hiring investment bankers last month to consider a sale of the unit, which manages the oldest US mutual fund.

A rise in equity markets increased MFS's assets under management 11 percent to $175 billion. That offset $100 million in redemptions during the quarter, compared to $1.4 billion in net sales in the year-earlier period. Redemptions slowed from $400 million in the second quarter. MFS's revenue fell 4.1 percent to C$395 million as the Canadian dollar gained against the US currency.

Shares of Sun Life rose 47 cents, or one percent, to C$45.94 at 1.59 p.m. in trading on the Toronto Stock Exchange. They've fallen 1.7 percent this year, compared with an 8.2 percent increase for the 38-member S&P/TSX Financials Index.

MFS has started to rebound after four years of withdrawals from its mutual funds. Individual investors began pulling money because of poor growth-fund performance during the 2000-2002 bear market and continued after the company's involvement in a mutual-fund trading scandal and undisclosed sales payments to brokers.

Chief executive officer Donald Stewart said this week there was a "high degree of interest" in MFS. Analysts including Robert Wessel at National Bank Financial said the insurer may instead sell a stake in MFS through an initial public offering.