4 % 5 % 6 % 8 % 7 % An Advisor s guide to Dynamic Series T Funds

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1 4 % 6 % 5 % 8 % 7 % TAPPING INTO tax-efficient income An Advisor s guide to Dynamic Series T Funds Advisor use only

2 If your clients are ready to start drawing income from their investments, they may be surprised to know how much they may lose to taxes. Show your clients a more tax-efficient way to access their money and how they can help maximize the amount they take home. Different forms of distributions come with different levels of taxation, which can have a major impact on the after-tax value of your clients withdrawals. One of the most valuable tax management strategies involves taking advantage of the most appropriate type of distribution. Various types of income are taxed differently Interest income Dividend income Capital gains Amount paid in taxes Return of capital Amount kept Top marginal tax rate in Ontario: 46.41% Source: Ernst & Young As you can see, return of capital (ROC) provides the most tax-efficient form of distribution because income in the form of ROC is withdrawn from a client s original investment. Since an investor is essentially getting back the money they have already deposited, it is not considered taxable income.

3 Benefit from return of capital with Dynamic Series T Dynamic Series T is designed to help your clients achieve their monthly cash flow needs in the form of return of capital. This monthly return of capital is generally tax-free. The chart below shows the possible tax benefit of return of capital withdrawals from a Series T investment, while allowing their portfolio the opportunity to grow. $120,000 $100,000 $80,000 $60,000 Your client s distribution is taken from their original investment, which is tax-free. $40,000 Growth on capital (taxable) $20,000 Capital invested (non-taxable) Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 For illustrative purposes only. Assuming 6% rate of return and 5% distribution rate. In a Series T investment, withdrawals will reduce the adjusted cost base (ACB) of the investment to over time. What remains in the account is any growth the investment has achieved over the years on the original investment. Any subsequent withdrawals after the ACB reaches are taxable in the form of capital gains, which is taxed at a lower rate compared to dividend or interest income. A Series T investment allows your clients to defer the taxes on distributions they receive, and pay those taxes at a more advantageous time in the future. When your client decides to sell the investment, they will realize a larger capital gain than if they had not received return of capital distributions. However, capital gains are taxed at a lower rate than other income and your client can choose to sell when they may fall into a lower tax bracket, potentially reducing their overall tax bill.

4 Series T for various growth scenarios The charts below illustrate what happens to a Series T Investment over 20 years using three different hypothetical scenarios. Eventually, your clients adjusted cost base will become, and what will remain in the account is the growth, or any appreciation, on the investment. However, depending on the scenario, the length of time before your ACB reaches will vary. Monthly cash flow Growth on capital invested Capital invested Distribution rate is equal to the return of the investment 5% distribution rate and 5% rate of return The value of your clients investment and the distribution they receive monthly remains constant. At the end of 20 years, the adjusted cost base becomes, and what remains is any appreciation on their investment and this amount is taxable as capital gains. $500 $140,000 $120,000 $400 $100,000 $80,000 $300 $60,000 $200 $40,000 $20,000 $ Year Investment return is higher than distribution rate 5% distribution rate and 6% rate of return Because the rate of return on your clients account outpaces the amount of the distribution, the value of their investment and the cash flow they receive monthly increases over time. As the distribution is made directly from their capital, their ACB will reach quicker than other scenarios after 19 years. However, your clients investment will also have appreciated more than in the other scenarios, and this amount is taxable as capital gains. $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20, Year $500 $400 $300 $200 $100 Distribution rate is higher than the return of the investment 5% distribution rate and 4% rate of return Because the rate of return on your clients investments is lower than the distribution rate, the value of their investment and the income they receive monthly decreases slightly over time. Since they are withdrawing less capital from their account, their ACB decreases more slowly than other scenarios after 23 years. Your clients investment will have appreciated less than in other scenarios, and what remains in the account is taxable as capital gains. $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20, Year $500 $400 $300 $200 $100 The above graphs are for illustrative purposes only.

5 Tax efficiency for all of your clients life stages Use both Dynamic Corporate Class and Dynamic Series T to meet all of your clients investment growth and cash flow needs. Dynamic Corporate Class Funds can provide tax-efficient growth for non-registered investments through tax-deferred switching and tax-efficient distributions. When combined with Series T, Dynamic Corporate Class Funds can supply tax-efficient cash flow as well as providing a powerful combination for investors during both their accumulation and decumulation stages. Assets Accumulation While your clients are building their investments, Dynamic Corporate Class offers them tax-efficient growth to help them achieve the cash flow they will eventually need. Decumulation When your clients are ready to draw cash from their portfolios, they can move to Dynamic Corporate Class Series T without immediately triggering taxes. Life stage Ask your Dynamic sales representative about Corporate Class.

6 Fund codes fund name portfolio manager(s) FE LL DSC Max. distribution rate* Fixed Income Dynamic Advantage Bond Class Michael McHugh, Domenic Bellissimo % Dynamic Aurion Total Return Bond Class Christine Horoyski (Aurion Capital Management) % Dynamic Corporate Bond Strategies Class Barry Allan, Paul Sandhu (Marret Asset Management) ** 4% Balanced Dynamic Aurion Tactical Balanced Class Christine Horoyski, Craig J. MacAdam % (Aurion Capital Management) Dynamic Blue Chip Balanced Fund Adam Donsky, Domenic Bellissimo % Dynamic Blue Chip U.S. Balanced Class 1 Adam Donsky, Domenic Bellissimo % Dynamic Dividend Income Class Oscar Belaiche, Michael McHugh % Dynamic Diversified Real Asset Fund Michael McHugh % Dynamic Global Asset Allocation Class David L. Fingold, Michael McHugh % Dynamic Global Asset Allocation Fund David L. Fingold, Michael McHugh % Dynamic Power Balanced Fund Rohit Sehgal, Michael McHugh % Dynamic Power Balanced Class Rohit Sehgal, Michael McHugh % Dynamic Power Global Balanced Class Noah Blackstein % Dynamic Strategic Yield Class Oscar Belaiche, Michael McHugh % Dynamic Value Balanced Fund Cecilia Mo, Barry Allan (Marret Asset Management) % Dynamic Value Balanced Class Cecilia Mo, Barry Allan (Marret Asset Management) % Canadian Equity Dynamic Aurion Canadian Equity Class Robert B. Decker, Craig J. MacAdam, Greg A. Taylor % (Aurion Capital Management) Dynamic Canadian Dividend Class David L. Fingold, Michael McHugh % Dynamic Canadian Value Class Cecilia Mo % Dynamic Dividend Advantage Class Cecilia Mo % Dynamic Dividend Advantage Fund 2 Cecilia Mo % Dynamic Dividend Fund Jason Gibbs, Oscar Belaiche % Dynamic Dividend Income Fund Oscar Belaiche, Michael McHugh % Dynamic Equity Income Fund Oscar Belaiche % Dynamic Power Canadian Growth Class Rohit Sehgal % Dynamic Value Fund of Canada Cecilia Mo % US Equity Dynamic American Value Class David L. Fingold % Dynamic American Value Fund David L. Fingold % Dynamic Power American Growth Fund Noah Blackstein % Dynamic Power American Growth Class Noah Blackstein % Global Equity Dynamic Global Discovery Fund David L. Fingold % Dynamic Global Discovery Class David L. Fingold % Dynamic Global Dividend Fund 3 David L. Fingold % Dynamic Global Dividend Class David L. Fingold % Dynamic Global Value Fund Chuk Wong % Dynamic Global Value Class Chuk Wong % Dynamic Power Global Growth Class Noah Blackstein % Dynamic Power Global Navigator Class Alexander Lane %

7 fund name portfolio manager(s) FE LL DSC Max. distribution rate* Regional Dynamic EAFE Value Class Chuk Wong % Speciality Dynamic Alpha Performance Fund 4 Noah Blackstein % Dynamic Alternative Yield Class John Harris, Oscar Belaiche % Dynamic Energy Income Fund Jennifer Stevenson, Oscar Belaiche % Dynamic Financial Services Fund Rohit Sehgal, Yassen Dimitrov % Dynamic Global Infrastructure Fund Jason Gibbs, Oscar Belaiche % Dynamic Global Real Estate Fund Oscar Belaiche, Tom Dicker % Dynamic Strategic Energy Class Jennifer Stevenson, Oscar Belaiche % Portfolio Solutions DynamicEdge Balanced Portfolio GCIC Ltd % DynamicEdge Balanced Class Portfolio GCIC Ltd % DynamicEdge Balanced Growth Portfolio GCIC Ltd % DynamicEdge Balanced Growth Class Portfolio GCIC Ltd % DynamicEdge Conservative Class Portfolio GCIC Ltd % DynamicEdge Equity Portfolio GCIC Ltd % DynamicEdge Equity Class Portfolio GCIC Ltd % DynamicEdge Growth Portfolio GCIC Ltd % DynamicEdge Growth Class Portfolio GCIC Ltd % DynamicEdge 2020 Portfolio GCIC Ltd % DynamicEdge 2020 Class Portfolio GCIC Ltd % DynamicEdge 2025 Portfolio GCIC Ltd % DynamicEdge 2025 Class Portfolio GCIC Ltd % DynamicEdge 2030 Portfolio GCIC Ltd % DynamicEdge 2030 Class Portfolio GCIC Ltd % Marquis Balanced Portfolio GCIC Ltd % Marquis Balanced Class Portfolio GCIC Ltd % Marquis Balanced Growth Portfolio GCIC Ltd % Marquis Balanced Growth Class Portfolio GCIC Ltd % Marquis Equity Portfolio GCIC Ltd % Marquis Growth Portfolio GCIC Ltd % Marquis Institutional Balanced Portfolio GCIC Ltd % Marquis Institutional Balanced Growth Portfolio GCIC Ltd % Marquis Institutional Canadian Equity Portfolio GCIC Ltd % Marquis Institutional Equity Portfolio GCIC Ltd % Marquis Institutional Growth Portfolio GCIC Ltd % Marquis Institutional Global Equity Portfolio GCIC Ltd % * Distributions are calculated annually in December based on the NAV of the Fund and are fixed but not guaranteed. Distributions may involve a return of capital. ** Not available for purchases 1 Name change as of September Formerly Dynamic Blue Chip Balanced Class. 2 Name change as of September Formerly Dynamic Dividend Value Fund. 3 Fund codes for USD FE: 1732; LL: 1733; DSC: Offering Memorandum Product

8 Talk to your Financial Advisor today for more information on Dynamic Series T. 12DWD045_DF_SeriesT_AdvisorGuide_EN_V5_5 MOE9425 Head Office Dundee Place 1 Adelaide St. E., Ste Toronto, ON M5C 2V9 Toll free: Tel: Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. advisor.dynamic.ca ADVISOR USE ONLY Dynamic Funds is a registered trademark of its owner, used under license, and a division of GCIC Ltd. Customer Relations Centre Toll free: Tel: (English) (French) Fax: or service@dynamic.ca