Portfolio Review xxx Quarter 20xx. Evolution 50i50e Model Portfolio Portfolio Review Third Quarter 2018

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1 Portfolio Review xxx Quarter 20xx Evolution 50i50e Model Portfolio Portfolio Review Third Quarter 2018 Q3

2 Overview Diversified portfolios capture gains from asset classes and security types that are performing well, while limiting exposure to those that are underperforming. Evolution s portfolios are diversified not only across asset classes such as equities, bonds and real estate, but also by country, market capitalization, industry sector and investment style. CI Multi-Asset Management combines its portfolio construction expertise with ongoing comprehensive research and recommendations from State Street Global Advisors, one of the world s largest investment management companies, to create portfolios designed to capture evolving opportunities in the various asset classes. Each Evolution portfolio consists of a number of United and CI mutual funds. The information in the Portfolio Performance and Activity sections below is an aggregate of the underlying funds that make up the portfolio. Portfolio Performance Based on net returns and representative of Class E shares of the underlying United Funds and Class A shares of the underlying Cambridge Canadian Equity Corporate Class, Synergy American Corporate Class and Signature Emerging Markets Corporate Class funds. Returns are rounded to one decimal place. 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years Since Inception (September 2008) -1.1% 0.0% 1.2% 3.0% 4.6% 6.0% 6.2% Activity This report is designed to provide you with an up-to-date look at the Evolution 50i50e Model Portfolio, including the allocations by type of underlying investment and geographic region. Underlying Investments Geographic Regions 22.8% 19.8% 17.1% 15.3% 10.4% 5.7% 4.2% 2.9% 1.8% U.S. equity Canadian bond Foreign bond Canadian equity European equity Cash Asian equity Emerging markets equity Other equity 35.1% 32.7% 14.2% 2.3% 1.7% 1.5% 1.2% Canada U.S. Cash and other countries Japan Emerging markets U.K. France Germany Switzerland Spain Equity Market Cap Equity Industry Sector 82.3% 12.3% 5.4% Large-cap Mid-cap Small-cap 17.8% 14.2% 12.3% 11.3% 9.2% 8.2% 7.6% 5.9% 5.8% 2.2% 1.7% Financial services Real estate Information technology Industrials Energy Health care Consumer discretionary Materials Consumer staples Utilities Other Telecommunication services 16

3 Portfolio Target Allocations Income and Real Estate 50% Canadian Fixed Income Corporate Class 22% Global Fixed Income Corporate Class 11% Enhanced Income Corporate Class 10% Real Estate Investment Corporate Class 7% Canadian Equity 19% Cambridge Canadian Equity Corporate Class 7% Canadian Equity Alpha Corporate Class 5% Canadian Equity Value Corporate Class 4% Canadian Equity Small Cap Corporate Class 3% Top Ten Holdings Canada Gov't Bond 1.25% 01Feb20 1.0% Ontario Province 3.5% 02Jun24 1.0% Canada Gov't Bond 1.75% 01May20 0.9% Japan Gov't Five Year Bond 0.1% 20Dec22 0.8% Ontario Province 2.6% 02Jun25 0.8% U.S. Treasury N/B 2.375% 30Apr20 0.8% Quebec Province 2.5% 01Sep26 0.8% U.S. Treasury Inflation Indexed N/B 0.125% 15Apr17 0.7% Quebec Province 3.75% 01Sep24 0.7% Ontario Province 2.8% 02Jun48 0.7% U.S. Equity 15% Synergy American Corporate Class 5% US Equity Value Corporate Class 4% US Equity Alpha Corporate Class 3% US Equity Small Cap Corporate Class 3% International Equity 16% International Equity Growth Corporate Class 5% International Equity Value Corporate Class 4% Signature Emerging Markets Corporate Class 4% International Equity Alpha Corporate Class 3% 17

4 Performance Summary The portfolio returned 0.0% during the third quarter of 2018, underperforming its blended benchmark (50% FTSE Canada Universe Bond Index, 25% S&P/TSX Composite Index and 25% MSCI World Index), which rose 0.7%. Contributors to Performance The portfolio s U.S. and Canadian equity exposure, as well as Enhanced Income Corporate Class, contributed to relative performance. US Equity Alpha Corporate Class outperformed the S&P 500 Index due to strong stock selection in industrials and energy. Cambridge Canadian Equity Corporate Class added relative value due to stock selection in financials, industrials and materials. The fund s overweight exposure to U.S. equities also added value. Enhanced Income Corporate Class s income-equity component, which is comprised of global REITs, infrastructure, global preferred shares and dividend paying equities, contributed to relative performance. Exposure to corporate debt also added value as credit spreads tightened. Detractors from Performance Over the quarter, the portfolio s exposure to Canadian and global bonds detracted from absolute performance, but outperformed the FTSE Canada Universe Bond Index and JP Morgan Global Government Bond Index on a relative basis. Emerging markets and Canadian alpha mandates detracted from relative performance. Canadian Fixed Income Corporate Class detracted on an absolute basis as Canadian interest rates rose. However, the fund added relative value due to its shorter duration compared to the FTSE Canada Universe Bond Index, and overweight exposure to corporate bonds as spreads in these issues tightened. Global Fixed Income Corporate Class detracted from absolute performance as most major currencies depreciated against the Canadian dollar and U.S. interest rates rose. Nonetheless, the fund outperformed the benchmark (JP Morgan Global Government Bond Index) due to its shorter duration and strong bond-issue selection. Canadian Equity Alpha Corporate Class underperformed the benchmark (S&P/TSX Composite Index) due to its financials and industrials holdings. However, the fund has a concentrated, benchmark-agnostic mandate that deviates from the benchmark to deliver long-term, risk-adjusted returns. Portfolio Activity The portfolio s asset allocation at the end of the quarter was 36.9% fixed income, 57.4% equity and 5.7% cash. We also deployed some cash into CI Income Fund within Enhanced Income Corporate Class. Market Outlook Ten years ago, the global economy was thrown into turmoil amid the fallout from U.S. lenders high-risk housing loans. Central banks around the world reacted quickly to the resulting debt crisis with unprecedented tools that included zero interest rates and quantitative easing. These measures bailed out asset holders but penalized asset builders, which in turn created a wide wealth gap, resulting in low reported inflation and slow economic growth. The U.S. Federal Reserve s balance sheet has since ballooned to $4.2 trillion from less than $1 trillion, and it has made very little progress to retreat from that level. As government stimulus is gradually withdrawn, the global economy is expected to slow. However, it is unlikely quantitative easing will be unwound completely before the next recession. Corporate, government and individual debt levels will likely remain high, which limits future lending capacity. This increases the likelihood of tight credit conditions and recession. Investors should diversify their portfolios and avoid shares of companies with excessive debt. Our portfolios are focused on quality and value, and the managers are resisting temptation to buy at high prices. While many stocks at high multiples still offer good short-term upside, over the longer term, this tends to lead to wealth destruction. For example, last year s investor darling, the bitcoin cryptocurrency, has plunged 66% in less than a year. Signature Emerging Markets Corporate Class underperformed the MSCI Emerging Markets Index due to its holdings in information technology and materials. This was offset by overweight exposure to energy. 18

5 Our portfolios asset mixes are generally equal to the benchmark in terms of equity weight. This assures we will participate on the upside. Our equity positioning favours countries that offer value and lower downside. As investors appear overly focused in U.S. technology companies, the Canadian stock market has quietly set itself up as a value investment, with high dividend, larger long-term return potential and low volatility. We have continued to increase our allocation to Canada. We are even more confident in the domestic market following the negotiation of the new USMCA trade agreement with the United States and Mexico. As a minimum, it removes uncertainty and investors are now able to re-focus on fundamentals. The current bull market is nearly a decade old yet it could run longer. While the odds for upside appear high, the high valuations suggest the downside potential may be greater. To manage that risk, we have designed and implemented a put-option strategy, which can be viewed as lowcost insurance that offers an asymmetric benefit. As with other forms of insurance, we are not aiming to realize a gain. Covering all the bases is representative of our investment outlook, which includes both constructive and defensive views. 19

6 Portfolio management teams In the Evolution Private Managed Accounts program

7 For more information on Evolution Private Managed Accounts, please contact your advisor or visit Evolution Private Managed Accounts is a program that provides strategic asset allocation across a series of portfolios comprised of United and CI mutual funds and is managed by CI Investments Inc. ( CII ). Evolution Private Managed Accounts is not a mutual fund. CII provides portfolio management and investment advisory services as a registered advisor under applicable securities legislation. Evolution Private Managed Accounts is available through Assante Financial Management Ltd. and Assante Capital Management Ltd., affiliates of CII. The principal business of CII is the management, marketing, distribution and administration of mutual funds, segregated funds and other fee-earning investment products for Canadian investors. If you invest in CII products, CII will earn ongoing asset management fees in accordance with applicable prospectus or other offering documents. All commentaries are published by CII, the manager of all the funds described herein. They are provided as a general source of information and should not be considered personal investment advice or an offer or solicitation to buy or sell securities. Every effort has been made to ensure that the material contained in the commentaries is accurate at the time of publication. However, CII cannot guarantee their accuracy or completeness and accepts no responsibility for any loss arising from any use of or reliance on the information contained herein. Certain statements in this document are forward-looking. Forward-looking statements ( FLS ) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as may, will, should, could, expect, anticipate, intend, plan, believe, or estimate, or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what CI Investments Inc. and the portfolio manager believe to be reasonable assumptions, neither CI Investments Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise. All indexes quoted in this document are reported on a total return basis, which assumes the reinvestment of all dividends and other cash distributions. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments and the use of an asset allocation service. Please read the prospectus of the mutual funds in which investment may be made under the asset allocation service before investing. The indicated rates of return are the historical annual compounded total returns assuming the investment strategy recommended by the asset allocation service is used and after deduction of the fees and charges in respect of the service. The returns are based on the historical annual compounded total returns of the participating funds including changes in share unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder in respect of a participating fund that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Signature Global Asset Management, Signature Funds and CI Multi-Asset Management are trademarks of CII. Evolution, Cambridge, CI Investments, the CI Investments design, Harbour Advisors and Harbour Funds are registered trademarks of CII. Each of CI Multi-Asset Management, Harbour Advisors, Signature Global Asset Management and Cambridge Global Asset Management is a division of CII. Certain funds associated with Cambridge Global Asset Management or Harbour Advisors are sub-advised by CI Global Investments Inc., a firm registered with the U.S. Securities and Exchange Commission and an affiliate of CII Asset Management L.P. and the 1832 Asset Management design are trademarks of The Bank of Nova Scotia, used under licence. All trademarks used under licence. Published October _E (10/18)