IG Mackenzie Floating Rate Income Fund

Transcription

1 IG Mackenzie Floating Rate Income Fund Annual Financial Report MARCH 31, 2018 Copyright Investors Group Inc Trademarks, including Investors Group, are owned by IGM Financial Inc. and licensed to its subsidiary corporations.

2 ANNUAL FINANCIAL STATEMENTS MARCH 31, 2018 STATEMENTS OF FINANCIAL POSITION at March 31 (in $ 000 except per security amounts) STATEMENTS OF COMPREHENSIVE INCOME for the periods ended March 31 (in $ 000 except per security amounts) Assets Current assets: Non-derivative investments 622, ,728 Cash and cash equivalents 84,526 51,916 Accrued interest receivable 3, Dividends receivable 7 14 Accounts receivable for investments sold 32,408 3,070 Accounts receivable for securities issued 3,055 - Accounts receivable from the Manager - - Margin on derivative contracts - - Derivative assets 1,653 1,113 Other assets , ,169 Non-current assets: Taxes recoverable - - Other assets Total assets 747, ,169 Liabilities Current liabilities: Bank indebtedness - - Accounts payable for investments purchased 101,628 39,860 Accounts payable for securities redeemed - - Distributions payable - - Accrued expenses and miscellaneous payables 50 1 Dividends payable on investments sold short - - Margin on derivative contracts - - Derivative liabilities 10, Taxes payable - - Other liabilities - 2 Total liabilities 112,614 40,178 Net assets attributable to securityholders 635, ,991 a2018 b2017 Income: Gains (losses) on derivative and non-derivative investments: Dividends Interest income 24,779 8,731 Net realized gain (loss) 15,140 3,979 Net unrealized gain (loss) (8,749) 8,653 Income (loss) from derivatives - - Income (loss) from short selling - - Other Net gain (loss) on derivative and non-derivative investments 31,353 21,542 Securities lending income 21 3 Other Total income 31,680 21,545 Expenses: Management fees 5,295 2,171 Management fee rebates (61) (21) Service fees - - Service fee rebates - - Administration fees Trustee fees Commissions and other portfolio transaction costs Independent Review Committee costs 1 1 Other 8 8 Expenses before amounts absorbed by Manager 6,014 2,473 Expenses absorbed by Manager (5) - Net expenses 6,009 2,473 Increase (decrease) in net assets attributable to securityholders from operations before tax 25,671 19,072 Foreign withholding taxes paid (recovered) - - Foreign income taxes paid (recovered) - - Income tax paid (recovered) - - Increase (decrease) in net assets attributable to securityholders from operations 25,671 19,072 Net assets attributable to securityholders per security per series Series A ,420 60,567 Series B ,701 39,431 Series C ,570 14,329 Series Jdsc ,204 73,288 Series Jnl ,117 27,103 Series P ,289 22,996 Series U ,770 42, , ,991 Increase (decrease) in net assets attributable to securityholders from operations per security per series a2018 b2017 a2018 b2017 Series A ,134 4,594 Series B ,709 1,663 Series C ,049 1,056 Series Jdsc ,114 5,560 Series Jnl ,696 1,293 Series P ,442 2,285 Series U ,527 2,621 25,671 19,072 See accompanying notes.

3 ANNUAL FINANCIAL STATEMENTS MARCH 31, 2018 STATEMENTS OF CHANGES IN FINANCIAL POSITION for the periods ended March 31 (in $ 000 except when stated) TOTAL SERIES A SERIES B SERIES C a2018 b2017 a2018 b2017 a2018 b2017 a2018 b2017 Net assets attributable to securityholders, beginning of period 279, ,957 60,567 38,951 39,431 11,479 14,329 8,863 Increase (decrease) in net assets attributable to securityholders resulting from: Operations 25,671 19,072 4,134 4,594 3,709 1,663 1,049 1,056 Distributions: Income (18,564) (6,343) (2,915) (1,353) (2,600) (502) (734) (309) Capital gains (8,551) - (1,439) - (1,344) - (374) - Return of capital Management fee rebates (61) (21) Service fee rebates Total distributions (27,176) (6,364) (4,354) (1,353) (3,944) (502) (1,108) (309) Security transactions: Proceeds from sale of securities 510, ,189 62,514 31, ,899 34,983 17,141 6,828 Proceeds from securities issued on merger Reinvested from distributions 26,484 6,168 4,352 1,351 3, , Payment on redemption of securities (180,861) (64,031) (22,793) (14,876) (39,305) (8,689) (5,949) (2,418) Total security transactions 356, ,326 44,073 18,375 74,505 26,791 12,300 4,719 Increase (decrease) in assets attributable to securityholders 355, ,034 43,853 21,616 74,270 27,952 12,241 5,466 Net assets attributable to securityholders, end of period 635, , ,420 60, ,701 39,431 26,570 14,329 Increase (decrease) in securities outstanding (in thousands): Securities outstanding, beginning of period 5,938 4,137 3,865 1,220 1, Add (deduct): Securities sold 6,120 3,171 10,765 3,467 1, Securities issued on merger Reinvested from distributions Securities redeemed (2,231) (1,507) (3,850) (872) (583) (245) Securities outstanding, end of period 10,256 5,938 11,165 3,865 2,614 1,407 SERIES Jdsc SERIES Jnl SERIES P SERIES U a2018 b2017 a2018 b2017 a2018 b2017 a2018 b2017 Net assets attributable to securityholders, beginning of period 73,288 44,496 27,103 9,072 22,996 7,848 42,277 17,248 Increase (decrease) in net assets attributable to securityholders resulting from: Operations 5,114 5,560 2,696 1,293 1,442 2,285 7,527 2,621 Distributions: Income (3,646) (1,739) (1,897) (417) (1,099) (987) (5,673) (1,036) Capital gains (1,673) - (941) - (356) - (2,424) - Return of capital Management fee rebates (38) (17) (23) (4) Service fee rebates Total distributions (5,357) (1,756) (2,861) (421) (1,455) (987) (8,097) (1,036) Security transactions: Proceeds from sale of securities 73,802 40,594 72,445 24,576 3,349 17, ,812 30,309 Proceeds from securities issued on merger Reinvested from distributions 5,273 1,741 2, , , Payment on redemption of securities (40,916) (17,347) (31,108) (7,836) (8,498) (5,136) (32,292) (7,729) Total security transactions 38,159 24,988 44,179 17,159 (3,694) 13, ,063 23,444 Increase (decrease) in assets attributable to securityholders 37,916 28,792 44,014 18,031 (3,707) 15, ,493 25,029 Net assets attributable to securityholders, end of period 111,204 73,288 71,117 27,103 19,289 22, ,770 42,277 Increase (decrease) in securities outstanding (in thousands): Securities outstanding, beginning of period 7,189 4,728 2, , ,137 1,828 Add (deduct): Securities sold 7,230 4,038 7,101 2, ,832 16,788 3,002 Securities issued on merger Reinvested from distributions Securities redeemed (4,010) (1,753) (3,051) (788) (827) (514) (3,156) (780) Securities outstanding, end of period 10,929 7,189 6,989 2,659 1,889 2,247 18,511 4,137 See accompanying notes.

4 ANNUAL FINANCIAL STATEMENTS MARCH 31, 2018 STATEMENTS OF CASH FLOWS for the periods ended March 31 (in $ 000 except when stated) Cash flows from operating activities a2018 b2017 Increase (decrease) in net assets attributable to securityholders from operations 25,671 19,072 Less non-cash impact of: Net realized (gain) loss (15,140) (3,979) Change in net unrealized (gain) loss 8,749 (8,653) Adjustments for: Proceeds from sale and maturity of investments 322, ,797 Purchases of investments (631,874) (298,362) (Increase) decrease in accounts receivable and other assets (3,974) 1,066 Increase (decrease) in accounts payable and other liabilities 47 2 Net cash provided by (used in) operating activities (293,662) (81,057) Cash flows from financing activities: Proceeds from securities issued 441, ,863 Proceeds from securities issued on merger - - Payments on redemption of securities (114,492) (47,712) Distributions paid net of reinvestments (692) (196) Net cash provided by (used in) financing activities 326, ,955 Increase (decrease) in cash and cash equivalents 32,692 41,898 Cash and cash equivalents at beginning of period 51,916 9,927 Effect of exchange rate fluctuations on cash and cash equivalents (82) 91 Cash and cash equivalents, end of period 84,526 51,916 Cash 11,064 1,734 Cash equivalents 73,462 50,182 Bank indebtedness - - Supplementary disclosures on cash flow from operating activities: 84,526 51,916 Dividends received net of withholding taxes Interest received net of withholding taxes 21,192 9,811 Interest paid - - See accompanying notes.

5 ANNUAL FINANCIAL STATEMENTS MARCH 31, 2018 SCHEDULE OF INVESTMENTS as at March 31, 2018 No. of Units, Fair Shares, or Cost Value Country Sector Par Value (CAD$ 000) (CAD$ 000) BONDS AAC Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 2,403,566 3,011 3,151 Acrisure LLC Term Loan B 1st Lien F/R United States Bank Loans USD 348, Air Medical Group Holdings Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 319, Alpha 3 BV Term Loan B1 1st Lien F/R United Kingdom Bank Loans USD 972,650 1,256 1,264 AMC Entertainment Holdings Inc. 5.88% Callable United States Corporate USD 1,300,000 1,562 1,651 American Dental Partners Inc. Term Loan 1st Lien F/R United States Bank Loans USD 177, American Teleconferencing Services Ltd. Term Loan 1st Lien F/R United States Bank Loans USD 2,017,599 2,674 2,599 Amneal Pharmaceuticals LLC Term loan B 1st Lien F/R United States Bank Loans USD 5,700,000 7,298 7,357 AMS FinCo SARL Term Loan 1st Lien F/R Luxembourg Bank Loans USD 1,717,025 2,291 2,231 Aramark Services Inc. 4.75% Callable 2021 United States Corporate USD 290, Arch Merger Sub Inc. 8.50% Callable A United States Corporate USD 2,150,000 2,735 2,566 Artis Real Estate Investment Trust F/R Canada Corporate 1,780,000 1,780 1,782 ASP AMC Merger Sub Inc. 8.00% Callable A United States Corporate USD 1,420,000 1,894 1,717 ASP MSG Acquisition Co. Inc. Term Loan 1st Lien F/R United States Bank Loans USD 325, ATS Consolidated Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,220,000 2,795 2,897 Beasley Mezzanine Holdings LLC Term Loan 1st Lien F/R United States Bank Loans USD 1,391,200 1,766 1,801 Bellatrix Exploration Ltd. 8.50% Callable 144A Canada Corporate USD 160, Big Ass Fans LLC Term Loan 1st Lien F/R United States Bank Loans USD 1,496,250 1,902 1,946 BMC Acquisition Inc. Term Loan 1st Lien F/R United States Bank Loans USD 1,625,925 2,071 2,100 Boardriders Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 7,050,000 8,908 8,990 Bright Bidco BV Term Loan B 1st Lien F/R Netherlands Bank Loans USD 2,272,825 2,923 2,974 Burger King France SAS F/R Callable 2018 France Corporate EUR 610, BWAY Holding Co. 7.25% A United States Corporate USD 480, California Resources Corp. 8.00% Callable A United States Corporate USD 250, Calpine Corp. 5.25% Callable A United States Corporate USD 280, Camelot Finance SA 7.88% Callable A United States Corporate USD 400, Can Am Construction Inc./Canada Term Loan B 1st Lien F/R Canada Bank Loans USD 5,600,187 7,097 7,287 Canada Goose Inc. Term Loan 1st Lien F/R Canada Bank Loans USD 4,300,000 5,386 5,484 Canada Housing Trust No % Canada Federal Government 20, CareCentrix Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,271,542 2,880 2,943 Careerbuilder LLC Term Loan 1st Lien F/R United States Bank Loans USD 5,635,500 6,891 7,251 Casablanca US Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 2,385,900 3,121 3,104 Centennial Resource Production LLC 5.38% Callable A United States Corporate USD 140, CenturyLink Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 5,097,225 6,670 6,470 Chassix Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,733,150 3,396 3,543 The Chemours Co. Term Loan B 1st Lien F/R United States Bank Loans USD 188, Chemtrade Logistics Income Fund 4.75% Conv. Callable 2022 Canada Corporate 180, Chloe Ox Parent LLC Term Loan 1st Lien F/R United States Bank Loans USD 2,280,000 2,906 2,974 CHS/Community Health Systems Inc. 5.13% United States Corporate USD 110, Coeur Mining Inc. 5.88% Callable 2020 United States Corporate USD 440, Comfort Holding LLC Term Loan 1st Lien F/R United States Bank Loans USD 4,160,487 5,380 5,211 Comfort Holding LLC Term Loan 2nd Lien F/R United States Bank Loans USD 760, Commercial Vehicle Group Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,894,688 3,801 3,757 Commonwealth of Bahamas 5.75% Bahamas Foreign Governments USD 470, Commonwealth of Bahamas 6.95% Bahamas Foreign Governments USD 80, Communications Sales & Leasing Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 3,526,395 4,424 4,393 Conn s Inc. 7.25% Callable United States Corporate USD 150, ConvergeOne Holdings Corp. Term Loan B 1st Lien F/R United States Bank Loans USD 6,512,295 8,441 8,430 Coronado Australian Holdings Pty Ltd. Term Loan B 1st Lien F/R United States Bank Loans USD 3,323,571 4,156 4,239 Coronado Australian Holdings Pty Ltd. Term Loan C 1st Lien F/R United States Bank Loans USD 906,429 1,134 1,156 Crew Energy Inc. 6.50% Callable Canada Corporate 260, CryoLife Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,406,475 1,786 1,835 CSC Holdings LLC Term Loan B 1st Lien F/R United States Bank Loans USD 2,350,000 2,916 3,032 CSM Bakery Solutions LLC Term Loan 2nd Lien F/R United States Bank Loans USD 1,850,000 2,178 2,292 CSM NV Term Loan B F/R United States Bank Loans USD 1,968,184 2,458 2,512 CSP Technologies North America LLC Term Loan B 1st Lien F/R United States Bank Loans USD 2,287,398 2,985 2,961 CVR Partners LP 9.25% Callable A United States Corporate USD 340, Daseke Inc. Term Loan 1st Lien F/R United States Bank Loans USD 3,882,871 5,005 5,058 DaVita Healthcare Partners Inc. 5.00% Callable 2020 United States Corporate USD 290, DBRS Ltd. Term Loan 1st Lien F/R Canada Bank Loans USD 3,525,205 4,439 4,581 Deerfield Holdings Corp. Term Loan B 1st Lien F/R United States Bank Loans USD 1,630,000 2,080 2,110 DHX Media Ltd. 5.88% Conv. Canada Corporate 280, DHX Media Ltd. Term Loan B 1st Lien F/R Canada Bank Loans USD 2, Diamond (BC) BV Term Loan 1st Lien F/R United States Bank Loans USD 1,675,800 2,082 2,158 Digicert Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 1,710,000 2,098 2,231 Digicert Holdings Inc. Term Loan 2nd Lien F/R United States Bank Loans USD 580, Dole Food Co. Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,589,625 2,111 2,054 Dollarama Inc. F/R Canada Corporate 1,250,000 1,251 1,259 Drive DeVilbiss Healthcare Ltd. Term Loan 1st Lien F/R United States Bank Loans USD 4,716,608 5,754 5,636 EagleTree-Carbide Acquisition Corp. Term Loan 1st Lien F/R United States Bank Loans USD 5,946,200 7,394 7,732 Electrical Components International Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 5,411,721 7,258 7,020 Elo Touch Solutions Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,763,167 3,509 3,593

6 ANNUAL FINANCIAL STATEMENTS MARCH 31, 2018 SCHEDULE OF INVESTMENTS (continued) as at March 31, 2018 No. of Units, Fair Shares, or Cost Value Country Sector Par Value (CAD$ 000) (CAD$ 000) BONDS (continued) Energy Solutions LLC Term Loan B 1st Lien F/R United States Bank Loans USD 1,126,626 1,367 1,477 Envigo Holdings Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 4,110,000 5,059 5,202 Exela Intermediate LLC 10.00% Callable A United States Corporate USD 5,100,000 6,605 6,695 Fairmount Santrol Term Loan B 1st Lien F/R United States Bank Loans USD 5,812,832 7,407 7,588 Fastener Acquisition Inc. Term Loan 1st Lien F/R United States Bank Loans USD 2,180,000 2,791 2,787 First Quantum Minerals Ltd. 6.88% Callable A Zambia Corporate USD 390, Fortress Transportation and Infrastructure Investors LLC 6.75% Callable A United States Corporate USD 210, FXI Holdings Inc. 7.88% Callable A United States Corporate USD 510, Garda World Security Corp. 7.25% Callable 144A Canada Corporate USD 200, Garda World Security Corp. 7.25% Callable 144A Canada Corporate USD 210, Garda World Security Corp. Term Loan B 1st Lien F/R Canada Bank Loans USD 92, Garda World Security Corp. Term Loan B 1st Lien F/R Canada Bank Loans 1,779,062 1,777 1,790 Gavilan Resources LLC Term Loan 2nd Lien F/R United States Bank Loans USD 1,390,000 1,804 1,800 Genworth Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 2,510,000 3,205 3,296 GFL Environmental Inc. 5.38% Callable A Canada Corporate USD 460, Gibson Energy Inc. 5.25% Callable 2020 Reg S Canada Corporate 1,450,000 1,450 1,460 G-III Apparel Group Ltd. Term Loan B 1st Lien F/R United States Bank Loans USD 1,311,429 1,676 1,713 The Goodyear Tire & Rubber Co. 4.88% Callable 2026 United States Corporate USD 120, Gopher Resource LLC Term Loan 1st Lien F/R United States Bank Loans USD 2,020,000 2,549 2,630 Gopher Sub Inc. Term Loan 1st Lien F/R United States Bank Loans USD 2,628,387 3,233 3,386 Gopher Sub Inc. Term Loan Delayed Draw 1st Lien F/R United States Bank Loans USD 281, Government of Canada 2.50% Canada Federal Government 170, Government of Canada 1.00% Canada Federal Government 110, Great Canadian Gaming Corp. 6.63% Callable 144A Canada Corporate 440, Green Plains Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 4,447,650 5,541 5,758 Greenhill & Co. Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,886,125 2,353 2,454 Hardwoods Acquisition Inc. 7.50% Callable 144A United States Corporate USD 745, Hornblower Sub LLC Term Loan 1st Lien F/R United States Bank Loans USD 4,700,000 6,043 6,070 Hudson River Trading LLC Term Loan 1st Lien F/R United States Bank Loans USD 3,890,000 5,038 5,030 Hydro One Inc. F/R Canada Corporate 650, Hyster-Yale Group Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,000,000 1,282 1,300 Hyster-Yale Group Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 4,602,000 6,205 5,980 I-Logic Technologies Bidco Ltd. Term Loan B 1st Lien F/R United States Bank Loans USD 2,753,100 3,515 3,558 Imagine! Print Solutions Inc. Term Loan 1st Lien F/R United States Bank Loans USD 5,005,797 6,361 6,062 Impala Private Holdings II LLC Term Loan 1st Lien F/R United States Bank Loans USD 3,301,725 4,171 4,278 Indivior Finance SARL Term Loan B 1st Lien F/R United Kingdom Bank Loans USD 2,074,800 2,633 2,690 Integro Ltd. United States Term Loan B1 1st Lien F/R United States Bank Loans USD 2,446,036 3,115 3,151 Interior Logic Group Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 3,296,500 4,278 4,279 International Equipment Solutions LLC Term Loan B F/R United States Bank Loans USD 3,309,269 4,123 4,311 Invenergy Thermal Operating I LLC Term Loan B 1st Lien F/R United States Bank Loans USD 1,586,615 1,983 1,957 iqor US Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,100,506 2,560 2,718 iqor US Inc. Term Loan 2nd Lien F/R United States Bank Loans USD 3,550,000 4,274 4,420 Itron Inc. 5.00% Callable A United States Corporate USD 490, Jane Street Group LLC Term Loan B 1st Lien F/R United States Bank Loans USD 2,087,625 2,630 2,710 JBS USA LUX SA Term Loan B 1st Lien F/R Brazil Bank Loans USD 4,925,238 6,508 6,335 KEMET Corp. Term Loan B 1st Lien F/R United States Bank Loans USD 5,363,684 7,001 7,048 Keystone Peer Review Organization Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 1,731,300 2,316 2,244 Kronos Acquisition Holdings Inc. 9.00% A Canada Corporate USD 900,000 1,087 1,112 Lamb Weston Holdings Inc. 4.63% Callable A United States Corporate USD 80, Lamb Weston Holdings Inc. 4.88% Callable A United States Corporate USD 150, Lanai Holdings III Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 293, Lannett Co. Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,883,578 2,395 2,424 Lantheus Medical Imaging Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 115, LBM Borrower LLC Term Loan 1st Lien F/R United States Bank Loans USD 2,985,164 3,918 3,891 LD Intermediate Holdings Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 3,670,226 4,230 4,255 Lee Enterprises Inc. 9.50% Callable A United States Corporate USD 50, LifeMiles Ltd. Term Loan B 1st Lien F/R Colombia Bank Loans USD 2,976,750 3,783 3,931 Lifetime Brands Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 630, Lionbridge Technologies Inc. Term Loan 1st Lien F/R United States Bank Loans USD 1,062,981 1,396 1,369 Livingston International Inc. Term Loan 1st Lien F/R Canada Bank Loans USD 1,496,250 1,812 1,926 Livingston International Inc. Term Loan 1st Lien F/R Canada Bank Loans 4,333,810 4,118 4,160 Livingston International Inc. Term Loan 2nd Lien F/R Canada Bank Loans USD 650, Logibec Groupe Informatique Ltd. Term Loan 1st Lien F/R Canada Bank Loans 2,061,378 1,957 1,957 Mattamy Group Corp. 6.50% Callable 2020 Canada Corporate 490, Mattamy Group Corp. 6.50% Callable A Canada Corporate USD 310, McAfee LLC Term Loan B 1st Lien F/R United States Bank Loans USD 2,944,505 3,676 3,837 McAfee LLC Term Loan 2nd Lien F/R United States Bank Loans USD 4,000,000 5,090 5,233 MEG Energy Corp. Term Loan B 1st Lien F/R Canada Bank Loans USD 573, Meredith Corp. 6.88% Callable A United States Corporate USD 180, Meredith Corp. Term Loan B 1st Lien F/R United States Bank Loans USD 6,600,000 8,177 8,564 Micron Technology Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 531,

7 ANNUAL FINANCIAL STATEMENTS MARCH 31, 2018 SCHEDULE OF INVESTMENTS (continued) as at March 31, 2018 No. of Units, Fair Shares, or Cost Value Country Sector Par Value (CAD$ 000) (CAD$ 000) BONDS (continued) Mission Broadcasting Inc. Term Loan 1st Lien F/R United States Bank Loans USD 282, MND Holdings III Corp. Term Loan 1st Lien F/R United States Bank Loans USD 710, NAVEX Global Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,558,227 3,413 3,310 Neenah Foundry Co. Term Loan B 1st Lien F/R United States Bank Loans USD 2,910,000 3,706 3,730 New Arclin US Holding Corp. Term Loan 1st Lien F/R United States Bank Loans USD 716, New Red Finance Inc. 5.00% Callable A Canada Corporate USD 620, Nexstar Broadcasting Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,197,997 2,844 2,844 Numericable-SFR 6.00% Callable 144A France Corporate USD 1,180,000 1,562 1,488 NuVista Energy Ltd. 6.50% Callable 2020 Canada Corporate 1,480,000 1,480 1,485 NWH Escrow Corp. 7.50% Callable 144A United States Corporate USD 1,190,000 1,316 1,403 Ocean Bidco Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,730,000 3,515 3,533 OCI Beaumont LLC Term Loan B 1st Lien F/R United States Bank Loans USD 2,960,000 3,711 3,843 Office Depot Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 4,894,500 6,093 6,435 Osteon Merger Sub Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,900,000 2,366 2,472 Oxbow Carbon LLC Term Loan B 1st Lien F/R United States Bank Loans USD 2,251,500 2,905 2,940 Oxbow Carbon LLC Term Loan B 2nd Lien F/R United States Bank Loans USD 1,120,000 1,426 1,468 Paradigm Acquisition Corp. Term Loan 1st Lien F/R United States Bank Loans USD 1,416,160 1,788 1,843 Parkland Fuel Corp. 6.00% Callable Canada Corporate 350, Parkland Fuel Corp. 5.75% Callable 2019 Canada Corporate 320, Parkland Fuel Corp. 6.00% Callable A Canada Corporate USD 780,000 1,021 1,011 The Pasha Group Term Loan B 1st Lien F/R United States Bank Loans USD 4,058,750 5,086 5,281 Petroleos De Venezuela SA 6.00% Venezuela Corporate USD 1,987, PetSmart Inc. Term Loan B2 1st Lien F/R United States Bank Loans USD 646, Pisces Midco Inc. 8.00% Callable A United States Corporate USD 490, Pisces Midco Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 4,990,000 6,396 6,396 PM Merger Sub Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,820,000 2,316 2,352 PNI Canada Acquireco Corp. Term Loan B 1st Lien F/R Canada Bank Loans USD 3,067,094 3,667 3,941 Polycom Inc. Term Loan 1st Lien F/R United States Bank Loans USD 35, Power Products LLC Term Loan 1st Lien F/R United States Bank Loans USD 1,512,467 1,985 1,970 Project Leopard Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 2,761,142 3,682 3,596 Propulsion Acquisition LLC Term Loan 1st Lien F/R United States Bank Loans USD 2,457,404 3,035 3,134 Prospect Medical Holdings Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 3,240,000 3,986 4,184 Province of Ontario 2.60% Canada Provincial Governments 20, PS HoldCo LLC Term Loan 1st Lien F/R United States Bank Loans USD 1,630,000 2,091 2,121 PSC Industrial Outsourcing LP Term Loan B 1st Lien F/R United States Bank Loans USD 3,192,000 3,973 4,156 PSC Industrial Outsourcing LP Term Loan 2nd Lien F/R United States Bank Loans USD 880,000 1,084 1,124 Q Holding Co. Term Loan B 1st Lien F/R United States Bank Loans USD 3,611,923 4,834 4,708 QCP SNF West 8.13% Callable A United States Corporate USD 550, Quad Graphics Inc. 7.00% United States Corporate USD 160, Quest Software US Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 2,979,495 3,952 3,915 Quinpario Acquisition Corp. 2 B Term Loan 1st Lien F/R United States Bank Loans USD 3,966,086 4,981 5,162 Rackspace Hosting Inc. 8.63% Callable A United States Corporate USD 1,030,000 1,382 1,314 Red Ventures LLC Term Loan B 1st Lien F/R United States Bank Loans USD 4,965,050 6,126 6,461 Reliance Intermediate Holdings LP 6.50% Callable A Canada Corporate USD 435, Renfro Corp. Term Loan B 1st Lien F/R United States Bank Loans USD 3,509,287 4,298 4,555 REP WWEX Acquisition Parent LLC Term Loan 1st Lien F/R United States Bank Loans USD 1,984,962 2,448 2,567 Research Now Group Inc. Term Loan 1st Lien F/R United States Bank Loans USD 7,261,800 8,875 9,311 Research Now Group Inc. Term Loan 2nd Lien F/R United States Bank Loans USD 1,070,000 1,280 1,289 Resolute Forest Products Inc. 5.88% United States Corporate USD 60, Resolute Investment Managers Inc. Term Loan 2nd Lien F/R United States Bank Loans USD 200, Rite Aid Corp. 7.70% United States Corporate USD 100, Riverbed Technology Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,203,524 1,606 1,547 Robertshaw US Holding Corp. Term Loan 1st Lien F/R United States Bank Loans USD 1,300,000 1,619 1,692 Russel Metals Inc. 6.00% Callable 2021 Canada Corporate 2,500,000 2,500 2,516 Sarbacane Bidco Inc. Term Loan 1st Lien F/R (AKA Prometric) United States Bank Loans USD 450, Scientific Games International Inc. Term Loan B5 1st Lien F/R United States Bank Loans USD 730, SciQuest Inc. Term Loan 1st Lien F/R United States Bank Loans USD 1,940,000 2,459 2,512 Shutterfly Inc. Term Loan B2 1st Lien F/R United States Bank Loans USD 3,640,000 4,633 4,719 Sigma Bidco BV Term Loan B 1st Lien F/R Netherlands Bank Loans EUR 4,090,000 6,515 6,430 Sigma US Corp. Term Loan B 1st Lien F/R Netherlands Bank Loans USD 2,720,000 3,504 3,507 SMI Acquisition Inc. Term Loan 1st Lien F/R United States Bank Loans USD 1,187,025 1,519 1,541 SMI Acquisition Inc. Term Loan 2nd Lien F/R United States Bank Loans USD 340, Solenis International LP Term Loan 2nd Lien F/R United States Bank Loans USD 1,500,000 1,919 1,843 Source Energy Services Canada LP 10.50% Callable A Canada Corporate 762, Sprint Capital Corp. 6.88% United States Corporate USD 310, Sprint Corp. 7.88% United States Corporate USD 100, Sprint Corp. 7.63% Callable 2024 United States Corporate USD 90, St. George s University Scholastic Services LLC Term Loan B 1st Lien F/R United States Bank Loans USD 840,342 1,060 1,094 Staples Inc. Term Loan 1st Lien F/R United States Bank Loans USD 4,269,300 5,430 5,458 Star West Generation LLC Term Loan B 1st Lien F/R United States Bank Loans USD 5,222,442 5,646 6,139 Stepstone Group LP Term Loan B 1st Lien F/R United States Bank Loans USD 2,070,000 2,666 2,683 Sunshine Investments BV Term Loan B3 1st Lien F/R Netherlands Bank Loans USD 2,000,000 2,563 2,576

8 ANNUAL FINANCIAL STATEMENTS MARCH 31, 2018 SCHEDULE OF INVESTMENTS (continued) as at March 31, 2018 No. of Units, Fair Shares, or Cost Value Country Sector Par Value (CAD$ 000) (CAD$ 000) BONDS (continued) Superior Industries International Inc. Term Loan 1st Lien F/R United States Bank Loans USD 2,468,638 3,234 3,216 Superior Plus LP 5.25% Callable 2020 Canada Corporate 710, Syniverse Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 1,620,000 2,018 2,113 Talen Energy Supply LLC 9.50% Callable A United States Corporate USD 740, Talen Energy Supply LLC 10.50% Callable A United States Corporate USD 440, Team Health Holdings Inc. 6.38% Callable A United States Corporate USD 260, Tenet Healthcare Corp. 6.75% United States Corporate USD 850,000 1,109 1,075 Terex Corp. Term Loan 1st Lien F/R United States Bank Loans USD 316, TerraForm Power Operating LLC 5.00% Callable A United States Corporate USD 540, Teva Pharmaceutical Finance Netherlands III BV 3.15% Callable Israel Corporate USD 2,390,000 2,482 2,473 Titan Acquisition Ltd. 7.75% Callable A United Kingdom Corporate USD 2,590,000 3,391 3,336 Titan Acquisition Ltd. Term Loan 1st Lien F/R United Kingdom Bank Loans USD 3,100,000 4,048 3,991 The Toronto-Dominion Bank F/R Callable 2024 Canada Corporate 60, Tortoise Borrower LLC Term Loan 1st Lien F/R United States Bank Loans USD 1,485,000 1,893 1,937 Traverse Midstream Partners LLC Term Loan B 1st Lien F/R United States Bank Loans USD 1,490,000 1,829 1,933 Trico Products Corp. Term Loan 1st Lien F/R United States Bank Loans USD 2,500,000 3,005 3,245 U.S. Renal Care Inc. Term Loan 1st Lien F/R United States Bank Loans USD 3,170,137 3,957 4,108 Uber Technologies Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 7,528,618 9,541 9,748 Uber Technologies Inc. Term Loan 1st Lien F/R United States Bank Loans USD 6,340,000 8,150 8,215 Valeant Pharmaceuticals International Inc. 5.63% Callable 144A United States Corporate USD 230, Valeant Pharmaceuticals International Inc. 5.50% Callable A United States Corporate USD 200, VCVH Holding Corp. Term Loan 1st Lien F/R United States Bank Loans USD 2,693,362 3,574 3,504 Videotron Ltd./Videotron Ltee. 5.13% Callable A Canada Corporate USD 640, VIP Cineman Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 1,705,859 2,234 2,223 Vistage Worldwide Inc. Term Loan 1st Lien F/R United States Bank Loans USD 3,060,000 3,821 3,972 W/S Packaging Holdings Inc. 9.00% Callable A United States Corporate USD 1,650,000 2,132 2,163 WellDyneDx Inc. Term Loan 1st Lien F/R United States Bank Loans USD 4,293,726 5,426 5,462 Werner FinCo LP Term Loan 1st Lien F/R United States Bank Loans USD 5,609,875 7,208 7,281 Western Dental Services Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 3,463,825 4,490 4,515 Williams Scotsman International Inc. 7.88% Callable A United States Corporate USD 480, Wind Tre SpA 5.00% Callable 2020 Italy Corporate USD 300, Windstream Services LLC Term Loan B6 1st Lien F/R United States Bank Loans USD 2,612,322 3,203 3,246 Wirepath Home Systems LLC Term Loan 1st Lien F/R United States Bank Loans USD 995,006 1,233 1,288 YRC Worldwide Inc. Term Loan 1st Lien F/R United States Bank Loans USD 3,002,817 3,727 3,906 Zotec Partners LLC Term Loan 1st Lien F/R United States Bank Loans USD 4,360,000 5,431 5, , ,497 EQUITIES AltaGas Ltd. Pfd. Series K Canada Energy 21, Brookfield Asset Management Inc. Pfd. Series 46 Canada Financials 14, Brookfield Asset Management Inc. Pfd. Series 48 Canada Financials 20, Brookfield Renewable Partners LP Pfd. Series 11 Canada Utilities 31, Source Energy Services Ltd. Canada Energy 7, TransAlta Corp. Pfd. Series A Canada Energy 28, TransCanada Corp. Pfd. Series 15 Canada Energy 29, Westcoast Energy Inc. 5.20% Cum. Red. First Pfd. Series 12 Canada Energy 5, ,542 3,624 COMMISSIONS AND OTHER PORTFOLIO TRANSACTION COSTS (9) - TOTAL NON-DERIVATIVE INVESTMENTS 612, ,121 Net Assets (see Schedule of Asset Composition): Total non-derivative investments 622,121 Cash and cash equivalents 84,526 Derivative assets (see schedule of derivative instruments) 1,653 Derivative liabilities (see schedule of derivative instruments) (10,936) Other net assets (liabilities) (62,293) 635,071

9 ANNUAL FINANCIAL STATEMENTS MARCH 31, 2018 Schedule of Asset Composition as at March 31, 2018 PORTFOLIO ALLOCATION % of net assets Bonds 97.2 Equities 0.6 Cash and cash equivalents 13.3 Other net assets (liabilities) (11.1) Total BONDS SECTOR ALLOCATION Bank Loans 87.5 Corporate 9.6 Foreign Governments as at March 31, 2017 PORTFOLIO ALLOCATION % of net assets Bonds 92.9 Equities 1.3 Cash and cash equivalents 18.5 Other net assets (liabilities) (12.7) Total BONDS SECTOR ALLOCATION Bank Loans 77.4 Corporate 8.8 Federal Government 4.1 Provincial Governments 1.6 Foreign Governments Schedule of Derivative Instruments as at March 31, 2018 Schedule of Forward Currency Contracts Currency to Contract Currency to Current Unrealized Unrealized Counterparty Settlement be received costs be delivered fair value gains losses credit rating date (000) (CAD$ 000) (000) (CAD$ 000) (CAD$ 000) (CAD$ 000) AA CAD EUR 1,004 - (16) A CAD ,000 MXN (63) AA ,908 CAD 21,908 17,500 USD 22,539 - (631) AA ,443 CAD 13,443 10,290 USD 13, AA ,046 CAD 10,046 8,000 USD 10,304 - (258) AA ,685 CAD 15,685 12,500 USD 16,098 - (413) AA ,216 CAD 11,216 8,815 USD 11,352 - (136) AA ,324 CAD 43,324 34,620 USD 44,585 - (1,261) AA ,814 CAD 12,814 10,000 USD 12,878 - (64) A ,298 CAD 36,298 29,500 USD 37,987 - (1,689) AA ,210 CAD 11,210 8,815 USD 11,348 - (138) AA ,083 CAD 59,083 47,250 USD 60,829 - (1,746) AA ,369 CAD 4,369 3,400 USD 4,377 - (8) AA ,051 CAD 68,051 55,500 USD 71,440 - (3,389) AA ,949 CAD 39,949 31,778 USD 40,888 - (939) AA ,366 CAD 4,366 3,400 USD 4,374 - (8) AA ,410 CAD 49,410 38,510 USD 49,543 - (133) AA ,219 CAD 5,219 4,000 USD 5, AA ,369 CAD 4,369 3,400 USD 4,374 - (5) AA ,229 CAD 32,229 25,020 USD 32, AA ,219 CAD 5,219 4,000 USD 5, AA ,334 CAD 80,334 61,740 USD 79, A ,357 CAD 4,357 3,400 USD 4,371 - (14) AA ,364 CAD 4,364 3,400 USD 4,372 - (8) AA ,366 CAD 4,366 3,400 USD 4,371 - (5) AA ,359 CAD 4,359 3,400 USD 4,371 - (12) A ,000 MXN CAD ,368 (10,936) Schedule of Options Purchased Premium Fair Underlying No. of No. of Option Strike Expiration paid value security options shares type price date (CAD$ 000) (CAD$ 000) ishares iboxx $ High Yield Corporate Bond ETF ,300 Put USD ishares iboxx $ High Yield Corporate Bond ETF ,100 Put USD TOTAL DERIVATIVE ASSETS 1,653 TOTAL DERIVATIVE LIABILITIES (10,936)

10 NOTES TO THE ANNUAL FINANCIAL STATEMENTS MARCH 31, ORGANIZATION OF THE FUND, FISCAL PERIODS AND GENERAL INFORMATION (a) Organization of the Fund The Fund is organized as an open-ended mutual fund trust established under the laws of Manitoba and governed by a Declaration of Trust. The address of the Fund s registered office is 447 Portage Avenue, Winnipeg, Manitoba, Canada. The Fund is authorized to issue an unlimited number of securities of multiple series. If issued, Series F, P, and S securities are only available for purchase by other Investors Group Funds or other qualified investors. All series generally share in the operations of the Fund on a pro rata basis except for items that can be specifically attributed to one or more series. Distributions for each series may vary, partly due to the differences in expenses between the series. (b) Financial periods The Statements of Financial Position are presented as at March 31, 2018 and The Statements of Comprehensive Income, Statements of Changes in Financial Position and Statements of Cash Flows are for the 12 month periods ended March 31, 2018 and The Schedule of Investments is presented as at March 31, Where a Fund or series of a Fund was established during either period, the information for the Fund or series is provided from inception date. Where a series of a Fund was terminated during either period, the information for the series is provided up to close of business on the termination date. (c) General information I.G. Investment Management, Ltd. is the Manager and Trustee of the Fund. I.G. Investment Management, Ltd. and/or I.G. International Management Limited acts as Portfolio Advisor(s) to the Fund. In some cases, I.G. Investment Management (Hong Kong) Limited has been engaged as sub-advisor to provide investment services to the Fund. The Fund is distributed by Investors Group Financial Services Inc. and Investors Group Securities Inc. (collectively, the Distributors). These companies are, indirectly, wholly owned subsidiaries of IGM Financial Inc. IGM Financial Inc. is a subsidiary of Power Financial Corp. and Power Corporation of Canada. Companies related to Power Financial Corporation are therefore considered affiliates of the Trustee, the Manager and the Distributors. The Fund may invest in certain securities within the Power Group of Companies, subject to certain governance criteria, and these holdings, as at the end of the period, have been identified on the Schedule of Investments for the Fund. Any transactions during the periods were executed through market intermediaries and under prevailing market terms and conditions. 2. BASIS OF PREPARATION AND PRESENTATION These annual financial statements (financial statements) have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). A summary of the Fund s significant accounting policies under IFRS is presented in Note 3. These financial statements are presented in Canadian dollars, which is the Fund s functional currency, and rounded to the nearest thousand unless otherwise indicated. These financial statements are prepared on a going concern basis using the historical cost basis, except for financial assets and liabilities that have been measured at fair value. These financial statements were authorized for issue by the Manager on June 6, Standards issued but not yet effective for the current accounting year are described in Note SIGNIFICANT ACCOUNTING POLICIES (a) Financial instruments Investments include financial assets and liabilities such as debt and equity securities, openended investment funds and derivatives. The Fund classifies and measures financial instruments in accordance with IFRS 9 Financial Instruments (IFRS 9). Upon initial recognition, financial instruments are classified as fair value through profit or loss (FVTPL). All financial assets and liabilities are recognized in the Statement of Financial Position when the Fund becomes a party to the contractual requirements of the instrument. Financial instruments are derecognized when the right to receive cash flows from the instrument has expired or the Fund has transferred substantially all risks and rewards of ownership. As such, investment purchase and sale transactions are recorded as of the trade date. Financial instruments are subsequently measured at FVTPL with changes in fair value recognized in the Statement of Comprehensive Income. The cost of investments (cost) is based on the weighted average cost of investments and excludes commissions and other portfolio transaction costs, which are separately reported in the Statement of Comprehensive Income. Realized gains and losses on disposition, including foreign exchange gains or losses on such investments, are determined based on the cost of investments. Gains and losses arising from changes in the fair value of the investments are included in the Statement of Comprehensive Income for the period in which they arise. Gains and losses realized on certain derivatives, including interest rate and currency swaps, and futures are reported as Income (loss) from derivatives within the Statement of Comprehensive Income. The Fund accounts for its holdings in unlisted open-ended investment funds at FVTPL. The Fund has concluded that unlisted open-ended investment funds in which it invests do not meet the definition of structured entities. The Fund s investment in unlisted open-ended funds, if any, is presented in the Schedule of Investments at fair value which represents the Fund s maximum exposure on these investments. (b) Fair value measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund s valuation policies are as follows: (i) Equity securities, fixed-income securities and other investment funds Fair value for securities listed on a public securities exchange or traded on an over-thecounter market is determined as the last traded market price or close price recorded by the security exchange on which the security is principally traded, where the close price falls within the bid-ask spread of the security. In situations where the last traded market price is not within the bid-ask spread, the Manager selects the point within the bid-ask spread that is most representative of fair value. Fair value of fixed-income securities includes consideration of the creditworthiness of the issuer. Investments in securities of another investment fund are valued at the net asset value per security calculated in accordance with the offering documents of such investment fund or as reported by that fund s manager. Unlisted or non-exchange traded securities, or securities for which a last traded market price is unavailable or securities for which market quotations are, in the Manager s opinion, inaccurate, unreliable or not reflective of all available material information, are valued at their estimated fair value, determined by using appropriate and accepted industry valuation techniques including valuation models. The estimated fair value of a security determined using valuation models requires the use of inputs and assumptions based on observable market data including volatility and other applicable rates or prices. In limited circumstances, the estimated fair value of a security may be determined using valuation techniques that are not supported by observable market data. (ii) Futures and swaps contracts Futures and swaps contracts are valued at the gain or loss that would be realized upon closure of the contract. The values for such contracts fluctuate and are best determined at the settlement price established each day by the board of trade or exchange on which the contracts are traded. Margin accounts represent margin deposits held with brokers in respect of open futures and swaps contracts. Any change in the variation margin requirement is settled daily. Margin paid or deposited in respect of futures contracts or swaps is reflected as a receivable at fair value in the Statement of Financial Position. (iii) Forward contracts Forward contracts, including forward currency contracts, are valued at the gain or loss that would arise as a result of closing the position at the reporting date. (iv) Options contracts Premiums received from writing options are included in the Statement of Financial Position as a liability and subsequently adjusted daily to fair value. (c) Cash and cash equivalents Cash and cash equivalents includes cash on deposit with banks and short term investments that are readily convertible to cash, are subject to an insignificant risk of changes in value, and are used by the Fund in the management of short-term commitments. Cash and cash equivalents are reported at fair value which closely approximates their amortized cost due to their nature of being highly liquid and having short terms to maturity. Bank overdraft positions are presented as bank indebtedness in current liabilities in the Statement of Financial Position. (d) Currency All amounts are expressed in Canadian dollars. Foreign currency amounts have been expressed in Canadian dollars on the following bases: (i) Fair value of investments and other assets and liabilities at the rate of exchange at the end of the period. (ii) Income, expenses, purchases and sales of investments at the rate of exchange on the dates of such transactions. (e) Income recognition (f) Interest income from interest bearing investments is recognized using the effective interest method. Dividends are accrued as of the ex-dividend date. Dividend income and distributions from open-ended investment funds are recognized when the Fund s right to receive payment is established which is typically on the ex-dividend or distribution date. Distributions received from income trusts and open-ended investment funds are included in interest income, dividend income or capital gains, as appropriate, based on the best information available to the Manager. Due to the nature of these investments, actual allocations could vary from this information. Securities lending and repurchase transactions The Fund may be permitted to enter into securities lending, repurchase and reverse repurchase transactions as set out in the Fund s Simplified Prospectus. These transactions involve the temporary exchange of securities for collateral with a commitment to deliver the same securities on a future date. Income is earned from these transactions in the form of fees paid by the counterparty and, in certain circumstances, interest paid on cash or securities held as collateral. Income earned from these transactions is recognized on the accrual basis and included in the Statement of Comprehensive Income. Securities lending transactions are administered by The Bank of New York Mellon (the Securities Lending Agent). All the counterparties have a sufficient, approved credit rating based on ratings provided by external credit rating agencies, and the value of cash or securities held as collateral must be at least 102% of the fair value of the securities loaned, sold or purchased. The value of securities loaned and collateral received from securities lending as of the end of the periods, if applicable, is disclosed in Note 12. Collateral received is comprised of debt obligations of the Government of Canada and other countries, Canadian provincial and municipal governments, and financial institutions.