MUTUAL FUND (note 9) Renaissance Global Real Estate Fund, Class 'O' 250,654 2,804 2,990

Transcription

1 Renaissance Global Real Estate Currency Neutral Fund Annual Financial Statements for the financial year ended August 31, 2014 Statement of Investment Portfolio As at August 31, 2014 Number Security of Units 1-8 MUTUAL FUND (note 9) Renaissance Global Real Estate Fund, Class 'O' 250,654 2,804 2,990 TOTAL MUTUAL FUNDS 2,804 2, % Less: Transaction costs included in average cost TOTAL INVESTMENTS 2,804 2, % Unrealized Gain (Loss) on Forward Foreign Currency Contracts 20 07% Other Assets, less Liabilities 5 02% TOTAL NET ASSETS 3, % 1-8 Hedging reference number Refers to a corresponding number on the Forward Foreign Currency Contracts Schedule Average Cost ($000s) Current Value ($000s) %of Net Assets Forward Foreign Currency Contracts Schedule (note 9) Hedging Ref No** Counterparty Credit Rating for Counterparty* Settlement Date Currency Buys Par Value Currency Sells Par Value Forward Rate Current Rate Unrealized Gain (Loss) ($000s) 1 Royal Bank of Canada A /09/10 CAD 180,960 AUD 179, (1) 1 Royal Bank of Canada A /09/10 CAD 25,076 AUD 25, Royal Bank of Canada A /10/07 CAD 232,706 EUR 158, Royal Bank of Canada A /10/07 CAD 18,984 EUR 13, Royal Bank of Canada A /11/21 CAD 221,795 GBP 121, Canadian Imperial Bank of Commerce A /09/04 HKD 150,000 CAD 21, Royal Bank of Canada A /09/04 HKD 140,000 CAD 19, Royal Bank of Canada A /09/04 HKD 110,000 CAD 15, State Street Trust Co Canada A /09/04 HKD 1,722,585 CAD 240, State Street Trust Co Canada A /09/04 CAD 298,019 HKD 2,122, State Street Trust Co Canada A /12/04 CAD 241,043 HKD 1,722, (1) 5 Royal Bank of Canada A /11/28 CAD 390,606 JPY 36,918, Royal Bank of Canada A /10/22 CAD 18,909 SEK 120, Canadian Imperial Bank of Commerce A /09/18 CAD 101,993 SGD 117, Canadian Imperial Bank of Commerce A /09/11 USD 45,000 CAD 49, Canadian Imperial Bank of Commerce A /09/11 USD 20,000 CAD 21, Canadian Imperial Bank of Commerce A /09/11 USD 20,000 CAD 21, Royal Bank of Canada A /09/11 USD 24,000 CAD 25, Royal Bank of Canada A /09/11 USD 20,000 CAD 21, State Street Trust Co Canada A /09/11 USD 36,000 CAD 39, State Street Trust Co Canada A /09/11 USD 17,000 CAD 18, Toronto-Dominion Bank (The) A /09/11 USD 20,000 CAD 21, Canadian Imperial Bank of Commerce A /09/11 CAD 49,211 USD 45, Canadian Imperial Bank of Commerce A /09/11 CAD 26,862 USD 25, Canadian Imperial Bank of Commerce A /09/11 CAD 21,456 USD 20, Royal Bank of Canada A /09/11 CAD 38,324 USD 35, Royal Bank of Canada A /09/11 CAD 33,121 USD 31, (1) 8 State Street Trust Co Canada A /09/11 CAD 53,911 USD 50, State Street Trust Co Canada A /09/11 CAD 22,966 USD 21, Toronto-Dominion Bank (The) A /09/11 CAD 1,364,144 USD 1,244, Toronto-Dominion Bank (The) A /09/11 CAD 21,389 USD 20, * The credit rating of each counterparty (as rated by Standard & Poor's, a division of McGraw-Hill Financial Inc) of the forward foreign currency contracts held by the Fund meets or eceeds the minimum approved credit rating ** See corresponding reference number on the Statement of Investment Portfolio The accompanying notes are an integral part of these financial statements 1

2 Renaissance Global Real Estate Currency Neutral Fund Supplemental Schedule to Statement of Investment Portfolio Risk Management Investment Objective: Renaissance Global Real Estate Currency Neutral Fund (the Fund) seeks long-term capital growth primarily through eposure to a global real estate fund that invests primarily in equity securities of companies located throughout the world that are involved in, or that indirectly benefit from, management companies, commercial, industrial, and residential properties, or other investment in the real estate sector (the Underlying Fund) The Fund will attempt to reduce its currency eposure to non-canadian dollar currencies by implementing a currency hedging strategy Investment Strategies: The Fund invests primarily in units of Renaissance Global Real Estate Fund and attempts to reduce its currency eposure to non-canadian dollar currencies by implementing a currency hedging strategy that is aimed at protecting the Fund from non-canadian dollar currency fluctuations in respect of units it owns in the Underlying Fund The Fund may not be able to hedge its currency eposure fully and therefore could be subject to some foreign currency eposure The Statement of Investment Portfolio presents the securities held by the Fund as at August 31, 2014 and groups the securities by asset type, industry sector, geographic region, or currency eposure As the Fund invests in units of the Underlying Fund, it may be indirectly eposed to credit, currency, and interest rate risks from these holdings For currency risk, the net currency eposure from investments in the Underlying Fund and forward foreign currency contracts is discussed below in the Currency Risk section For other financial instruments risks, only direct eposure to significant risks that are relevant to the Fund is discussed here General information on risk management and specific discussion on credit, currency, interest rate, liquidity, and other price/market risk can befound in note 2 of the financial statements Summary of Investment Portfolio as at August 31, 2014 and 2013 The following table presents the investment sectors held by the Fund as at August 31, 2014 and 2013 and groups the securities by asset type, industry sector, geographic region, or currency eposure: % of Net Assets Portfolio Breakdown August 31, 2014 August 31, 2013 Underlying Fund Renaissance Global Real Estate Fund Unrealized Gain (Loss) on Forward Foreign Currency Contracts 07 (21) Other Assets, less Liabilities Total The following table presents the investment sectors held by the Underlying Fund, Renaissance Global Real Estate Fund, as at August 31, 2014 and 2013 and groups the securities by asset type, industry sector, geographic region or currency eposure: % of Net Assets Portfolio Breakdown August 31, 2014 August 31, 2013 Canadian Equities Diversified REITs Office REITs International Equities Australia Bermuda China 04 France Germany Hong Kong Japan Netherlands Norway Singapore Spain 08 Sweden 07 United Kingdom United States Equities Diversified REITs Hotels, Resorts & Cruise Lines Industrial REITs Office REITs Real Estate Operating Companies Residential REITs %ofnetassets Portfolio Breakdown August 31, 2014 August 31, 2013 Retail REITs Specialized REITs Other Assets, less Liabilities Total Credit Risk Credit ratings represent a consolidation of the ratings provided by various outside service providers and are subject to change, which could be material See the Statement of Investment Portfolio for counterparty from over-the-counter derivative contracts, where applicable As at August 31, 2014 and 2013, the Fund had no significant investments in debt securities Currency Risk The tables that follow indicate the currencies to which the Fund and the Underlying Fund had significant eposure as at August 31, 2014 and 2013, based on the market value of the Fund s and Underlying Fund s financial instruments (including cash and cash equivalents) and the underlying principal amounts of forward foreign currency contracts, as applicable As at August 31, 2014 Currency (note 2l) Curency Eposure from Underlying Fund ($000s) Forward Foreign Currency Contracts ($000s) Total Currency Eposure* ($000s) % of Net Assets USD 1,427 (1,403) EUR 270 (246) SGD 116 (102) NOK GBP 233 (220) JPY 397 (387) AUD 211 (207) 4 01 HKD 246 (242) 4 01 SEK 20 (19) 1 * Amounts reflect the carrying value of monetary and non-monetary items (including the notional amount of forward foreign currency contracts, if any) As at August 31, 2013 Currency (note 2l) Curency Eposure from Underlying Fund ($000s) Forward Foreign Currency Contracts ($000s) Total Currency Eposure* ($000s) % of Net Assets USD 1,307 (1,252) NOK SGD 74 (66) 8 03 AUD 237 (233) 4 01 JPY 420 (416) 4 01 EUR 154 (160) (6) (02) HKD 252 (264) (12) (04) CNY 11 (27) (16) (06) GBP 193 (209) (16) (06) * Amounts reflect the carrying value of monetary and non-monetary items (including the notional amount of forward foreign currency contracts, if any) The table that follows indicates how net assets as at August 31, 2014 and 2013 would have decreased or increased had the Canadian dollar strengthened or weakened by 1% in relation to all foreign currencies This analysis assumes that all other variables remain unchanged In practice, the actual results may differ from this analysis and the difference could be material August 31, 2014 August 31, 2013 Impact on Net Assets ($000s) (28) (26) Interest Rate Risk As at August 31, 2014 and 2013, the majority of the Fund s financial assets and liabilities are non-interest bearing and short-term in nature; accordingly, the Fund is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates 2 The accompanying notes are an integral part of these financial statements

3 Renaissance Global Real Estate Currency Neutral Fund Liquidity Risk The Fund is eposed to daily cash redemptions of redeemable units As at August 31, 2014 and 2013, the Fund retained sufficient cash and cash equivalent positions to maintain adequate liquidity Other Price/Market Risk The table that follows indicates how net assets as at August 31, 2014 and 2013 would have increased or decreased had the value of the Fund s benchmark(s) increased or decreased by 1% This change is estimated based on the historical correlation between the return of Class A units of the Fund as compared to the return of the Fund s benchmark(s), using 36 monthly data points, as available, based on the monthly net returns of the Fund This analysis assumes that all other variables remain unchanged The historical correlation may not be representative of the future correlation and, accordingly, the impact on net assets could be materially different For the periods ended August 31, 2014 and 2013, there were no transfers of financial assets and liabilities from Level 2 to Level 1 Reconciliation of financial asset and liability movement Level 3 The Fund did not hold any significant positions of Level 3 investments at the beginning of, during, or at the end of either reporting period During the period, the Fund's primary benchmark was changed from FTSE EPRA/NAREIT Developed Real Estate Inde (Net) (local currency) to FTSE EPRA/NAREIT Developed Real Estate Inde (USD) due to the former benchmark being unavailable in the desired currencies from the inde provider The FTSE EPRA/NAREIT Developed Real Estate Inde (USD) provides an appropriate broad-based securities inde for performance comparison Impact on Net Assets ($000s) Benchmark(s) August 31, 2014 August 31, 2013 FTSE EPRA/NAREIT Developed Real Estate Inde 25 n/a (USD) FTSE EPRA/NAREIT Developed Real Estate Inde (Net) n/a 27 (local currency) Fair Value of Financial Instruments The following is a summary of the inputs used as at August 31, 2014 and 2013 in valuing the Fund s financialassets and financialliabilities, carried at fair value: As at August 31, 2014 Level 1 (i) Level 2 (ii) Level 3 (iii) Total Classification ($000s) ($000s) ($000s) ($000s) Financial Assets Mutual Fund 2,990 2,990 Currency Forward Contracts 3,879 3,879 Total Financial Assets 2,990 3,879 6,869 Financial Liabilities Currency Forward Contracts (3,859) (3,859) Total Financial Liabilities (3,859) (3,859) Total Financial Assets and Liabilities 2, ,010 (i) Quoted prices in active markets for identical assets (ii) Significant other observable inputs (iii) Significant unobservable inputs As at August 31, 2013 Level 1 (i) Level 2 (ii) Level 3 (iii) Total Classification ($000s) ($000s) ($000s) ($000s) Financial Assets Mutual Fund 2,726 2,726 Currency Forward Contracts 3,733 3,733 Total Financial Assets 2,726 3,733 6,459 Financial Liabilities Currency Forward Contracts (3,789) (3,789) Total Financial Liabilities (3,789) (3,789) Total Financial Assets and Liabilities 2,726 (56) 2,670 (i) Quoted prices in active markets for identical assets (ii) Significant other observable inputs (iii) Significant unobservable inputs Transfer of assets between Level 1 and Level 2 Financial assets and liabilities transferred from Level 1 to Level 2 are the result of securities no longer being traded in an active market For the periods ended August 31, 2014 and 2013, there were no transfers of financial assets and liabilities from Level 1 to Level 2 Financial assets and liabilities transferred from Level 2 to Level 1 are the result of securities now being traded in an active market The accompanying notes are an integral part of these financial statements 3

4 Renaissance Global Real Estate Currency Neutral Fund Statements of Net Assets (in 000s, ecept per unit amounts) As at August 31, 2014 and 2013 (note 1) Assets Investments at current value (notes 2 and 3) $ 2,990 $ 2,726 Cash including foreign currency holdings, at current value 5 49 Receivable for units issued 1 Unrealized gain on forward foreign currency contracts Total Assets 3,020 2,787 Liabilities Payable for units redeemed 3 Unrealized loss on forward foreign currency contracts 5 67 Total Liabilities 5 70 Total Net Assets $ 3,015 $ 2,717 Net Assets per Class (note 11) Class A $ 528 $ 620 Class F $ 46 $ 64 Class O $ 2,441 $ 2,033 Net Assets per Unit (notes 4 and 11) Class A $ 1151 $ 1054 Class F $ 1156 $ 1049 Class O $ 1293 $ 1169 Reconciliation of Net Assets per Unit (note 11) As at August 31, 2014 Net Assets per Unit Adjustment for CICA 3855 Valuation Difference per Unit Net Asset Value per Unit Class A $ 1151 $ $ 1151 Class F $ 1156 $ $ 1156 Class O $ 1293 $ $ 1293 As at August 31, 2013 Net Assets per Unit Adjustment for CICA 3855 Valuation Difference per Unit Net Asset Value per Unit Class A $ 1054 $ $ 1054 Class F $ 1049 $ $ 1049 Class O $ 1169 $ $ 1169 Organization of the Fund (note 1) The Fund was established on October 14, 2010 (Date Established) Inception Date Class A October 20, 2010 Class F October 22, 2012 Class O November 10, The accompanying notes are an integral part of these financial statements

5 Renaissance Global Real Estate Currency Neutral Fund Statements of Operations (in 000s, ecept per unit amounts) For the periods ended August 31, 2014 and 2013 (note 1) Income Investment income $ 112 $ 44 Dividend revenue 1 Income (loss) from forward foreign currency contracts (148) 14 (36) 59 Epenses (note 5 and 8) Management fees ± Audit fees 9 9 Custodial fees Independent review committee fees Regulatory fees Unitholder reporting costs Epenses waived/absorbed by the Manager (55) (45) Net Investment Income (Loss) (52) 47 Realized and Unrealized Gain (Loss) on Investments Net realized gain (loss) on sale of investments Transaction costs Increase (decrease) in unrealized appreciation (depreciation) of investments 310 (146) Net Gain (Loss) on Investments 574 (112) Increase (Decrease) in Net Assets from Operations $ 522 $ (65) Increase (Decrease) in Net Assets from Operations per Class Class A $ 90 $ (11) Class F $ 10 $ (3) Class O $ 422 $ (51) Increase (Decrease) in Net Assets from Operations per Unit Class A $ 177 $ (025) Class F $ 194 $ (200) Class O $ 233 $ (057) ± Maimum Chargeable Management Fee Rates (note 5) Class A 250% Class F 125% Class O 000% Service Provider (note 8) The amounts paid by the Fund (including all applicable taes) to CIBC Mellon Trust Company for custodialfees, and to CIBC Mellon GlobalSecuritiesServicesCompany (CIBC GSS) for securities lending, fund accounting and reporting, and portfolio valuation (all net of absorptions) for the periods ended August 31, 2014 and 2013 were as follows: ($000s) 1 1 The accompanying notes are an integral part of these financial statements 5

6 Renaissance Global Real Estate Currency Neutral Fund Statements of Changes in Net Assets (in 000s) For the periods ended August 31, 2014 and 2013 (note 1) Class A Units Class F Units Class O Units Increase (Decrease) in Net Assets from Operations $ 90 $ (11) $ 10 $ (3) $ 422 $ (51) Distributions Paid or Payable to Unitholders From net investment income (8) (4) (1) (62) (29) From net realized capital gains (35) (1) (3) (127) (1) (43) (5) (4) (189) (30) Changes Due to Unitholder Transactions Amount received from the issuance of units ,860 Amount received from reinvestment of distributions Amount paid on redemptions of units (268) (248) (35) (5) (202) (102) (139) 331 (24) ,788 Increase (Decrease) in Net Assets for the Period (92) 315 (18) ,707 Net Assets at Beginning of Period , Net Assets at End of Period $ 528 $ 620 $ 46 $ 64 $ 2,441 $ 2,033 Units Issued and Outstanding (note 4) As at August 31, 2014 and 2013 Balance - beginning of period Units issued for cash Units issued on reinvestment of distributions Units redeemed (25) (23) (3) (16) (9) Balance - end of period The accompanying notes are an integral part of these financial statements

7 Notes to Financial Statements August 31, 2014 and Organization of the Funds and Financial Reporting Periods Each ofthe fundsin the Renaissance Investmentsfamilyoffunds (individually, a Fund, and collectively, the Funds) isan open-end investmenttrustorganized underthe lawsofontario and governed bya declaration of trust (Declaration of Trust) The Manager of the Funds is CIBC Asset Management Inc (the Manager) The Manager is also the trustee, registrar, and transfer agent of the Funds Each Fund may issue an unlimited number of classes of units and an unlimited number of units of each class In the future, the offering of any classes of a Fund may be terminated or additional classes may be offered The following table indicates the classes of units offered for sale for each of the Funds: Funds Class A Class T6 Class T8 Class F Premium Class F-Premium Class O Renaissance Money Market Fund ü ü ü Renaissance Canadian T-Bill Fund ü ü Renaissance US Money Market Fund ü ü Renaissance Short-Term Income Fund ü ü ü ü ü Renaissance Canadian Bond Fund ü ü ü ü ü Renaissance Real Return Bond Fund ü ü ü ü ü Renaissance Corporate Bond Fund ü ü ü ü ü Renaissance Corporate Bond Capital Yield Fund ü ü ü ü ü Renaissance US Dollar Corporate Bond Fund ü ü ü ü ü Renaissance High-Yield Bond Fund ü ü ü ü ü Renaissance Floating Rate Income Fund (also offers Class H, Class H-Premium, Class FH, Class FH-Premium, and Class OH units) ü ü ü ü ü Renaissance Global Bond Fund ü ü ü ü ü Renaissance Canadian Balanced Fund ü ü ü Renaissance US Dollar Diversified Income Fund ü ü ü ü ü Renaissance Optimal Conservative Income Portfolio (also offers Class T4, Select Class, Select-T4 Class, Select-T6 Class, Elite Class, Elite-T4 Class, and Elite-T6 Class units) ü ü ü ü Renaissance Optimal Income Portfolio (also offers Select Class, Select-T6 Class, Select-T8 Class, Elite Class, Elite-T6 Class, and Elite-T8 Class units) ü ü ü ü ü Renaissance Optimal Growth & Income Portfolio (also offers Class T4, Select Class, Select-T4 Class, Select-T6 Class, Select-T8 Class, Elite Class, Elite-T4 Class, Elite-T6 Class and Elite-T8 Class units) ü ü ü ü ü Renaissance Canadian Dividend Fund ü ü ü Renaissance Canadian Monthly Income Fund ü ü ü Renaissance Diversified Income Fund ü ü ü Renaissance Millennium High Income Fund ü ü ü Renaissance Canadian Core Value Fund ü ü ü Renaissance Canadian Growth Fund ü ü ü Renaissance Canadian All-Cap Equity Fund ü ü ü Renaissance Canadian Small-Cap Fund ü ü ü Renaissance US Equity Income Fund ü ü ü ü Renaissance US Equity Value Fund ü ü ü Renaissance US Equity Growth Fund ü ü ü Renaissance US Equity Growth Currency Neutral Fund ü ü ü Renaissance US Equity Fund ü ü ü Renaissance International Dividend Fund ü ü ü Renaissance International Equity Fund ü ü ü Renaissance International Equity Currency Neutral Fund ü ü ü Renaissance Global Markets Fund ü ü ü Renaissance Optimal Global Equity Portfolio (also offers Class T4, Select Class, Select-T4 Class, Select-T6 Class, Select-T8 Class, Elite Class, Elite-T4 Class, Elite-T6 Class, and Elite-T8 Class units) ü ü ü ü ü Renaissance Optimal Global Equity Currency Neutral Portfolio (also offers Class T4, Select Class, Select-T4 Class, Select-T6 Class, Select-T8 Class, Elite Class, Elite-T4 Class, Elite-T6 Class, and Elite-T8 Class units) ü ü ü ü ü Renaissance Global Value Fund ü ü ü Renaissance Global Growth Fund ü ü ü Renaissance Global Growth Currency Neutral Fund ü ü ü Renaissance Global Focus Fund ü ü ü Renaissance Global Focus Currency Neutral Fund ü ü ü 7

8 p/2 Notes to Financial Statements Renaissance Global Small-Cap Fund ü ü ü Renaissance European Fund ü ü ü Renaissance Asian Fund ü ü ü Renaissance China Plus Fund ü ü ü Renaissance Emerging Markets Fund ü ü ü Renaissance Optimal Inflation Opportunities Portfolio (also offers Select Class and Elite Class units) ü ü ü Renaissance Global Infrastructure Fund ü ü ü Renaissance Global Infrastructure Currency Neutral Fund ü ü ü Renaissance Global Real Estate Fund ü ü ü Renaissance Global Real Estate Currency Neutral Fund ü ü ü Renaissance Global Health Care Fund ü ü ü Renaissance Global Resource Fund ü ü ü Renaissance Global Science & Technology Fund ü ü ü Each class of units may charge a different management fee and operating epenses can either be common or class-specific Class-specific epenses are allocated on a class-by-class basis As a result, a separate net asset value per unit is calculated for each class of units Class A, T4, T6, and T8 units are available to all investors on a load basis Investors may pay a sales commission when purchasing Class A, T4, T6, and T8 units of the Funds and may pay a deferred sales charge if they redeem their Class A, T4, T6, and T8 units They may have to pay a short-term trading fee, if applicable Select, Select-T4, Select-T6, and Select-T8 Class units are available to all investors on a load basis Investors may pay a sales commission when purchasing Select, Select-T4, Select-T6, and Select-T8 Class units of the Funds and may pay a deferred sales charge if they redeem their Select, Select-T4, Select-T6, and Select-T8 Class units They may have to pay a short-term trading fee, if applicable Select, Select-T4, Select-T6, and Select-T8 Class units have a lower management epense ratio than Class A, T4, T6, and T8 units Select, Select-T4, Select-T6, and Select-T8 Class units have a minimum investment requirement of $250,000 Elite, Elite-T4, Elite-T6, and Elite-T8 Class units are available to all investors on a load basis Investors may pay a sales commission when purchasing Elite, Elite-T4, Elite-T6, and Elite-T8 Class units of the Funds and may pay a deferred sales charge if they redeem their Elite, Elite-T4, Elite-T6, and Elite-T8 Class units They may have to pay a short-term trading fee, if applicable Elite, Elite-T4, Elite-T6, and Elite-T8 Class units have a lower management epense ratio than Class A, T4, T6, T8, Select, Select-T4, Select-T6, and Select-T8 units Elite, Elite-T4, Elite-T6, and Elite-T8 Class units have a minimum investment requirement of $500,000 Class T4, T6, and T8 units have the same characteristics as Class A units, ecept that they each intend to pay a unique maimum fied distribution amount per unit, which also results in a separate net asset value per unit Select-T4, Select-T6, and Select-T8 Class units are the same as Select Class units ecept that they each intend to pay a unique maimum fied distribution amount per unit Elite-T4, Elite-T6, and Elite-T8 Class units are the same as Elite Class units, ecept that they each intend to pay a unique maimum fied distribution amount per unit Class F and Class F-Premiumunits are available to investors participating in programs that do not require the payment of sales chargesby investors and do not require the payment of service or trailing commissions to dealers For these investors, the Manager unbundles the typical distribution costs and charges a lower management fee Potential investors include clients of fee-for-service investment advisors, dealer-sponsored wrap accounts, and others who pay an annualfee to their dealer instead of transactionalsales charges and where the dealer does not receive service fees or trailing commissions from the Manager Premium Class units of Renaissance Money Market Fund are available to investors with a minimum initial investment of $25,000 on a load basis Premium Class units of Renaissance Short-Term Income Fund, Renaissance Canadian Bond Fund, Renaissance Real Return Bond Fund, Renaissance Corporate Bond Fund, Renaissance Corporate Bond Capital Yield Fund, Renaissance US Dollar Corporate Bond Fund, Renaissance High-Yield Bond Fund, Renaissance Floating Rate Income Fund, Renaissance Global Bond Fund, and Renaissance US Dollar Diversified Income Fund are available to investors with a minimum initial investment of $100,000 on a load basis Investors pay a sales commission when purchasing Premium Class units of the Funds and may pay a deferred sales charge if they redeem their Premium Class units They may have to pay a short-term trading fee, if applicable Class O units are only available to select investors who have been approved by and have entered into a Class O unit account agreement with the Manager or whose dealer or discretionary manager offers separately managed accounts or similar programs and has entered into a Class O unit account agreement with the Manager These investors are typically financial services companies, including the Manager, that use Class O units of a Fund to facilitate offering other products to investors No management fees or operating epenses are charged to a Fund in respect of Class O units; instead, a negotiated management fee is charged by the Manager directly to, or as directed by, Class O unitholders Class H, FH, FH-Premium, OH and H-Premium units (individually a Hedge Class) have the same characteristics of Class A, F, F-Premium, O, and Premium units, respectively, ecept that they each use derivative instruments such as forward foreign currency contracts to hedge foreign currency eposure of the Hedge Class of certain Funds The date upon which each Fund was established by Declaration of Trust (Date Established) and the date upon which each class of units of each Fund was first sold to the public (Inception Date) are reported in footnote Organization of the Fund on the Statements of Net Assets The Statement of Investment Portfolio of each of the Funds is as at August 31, 2014 The Statements of Net Assets are as at August 31, 2014 and 2013, and the Statements of Operations and Statements of Changes in Net Assets are for the periods ended August 31, 2014 and 2013 ecept for Funds or classes established during either period, in which case the information presented is from the Date Established or the Inception Date to August 31, 2014 or Summary of Significant Accounting Policies These financial statements, prepared in accordance with Canadian generally accepted accounting principles (GAAP ), include estimates and assumptions made by management that affect the reported amounts of assets, liabilities, income, and epensesduring the reporting periods Actualresultsmaydifferfromsuch estimates a) Risk Management The Funds overall risk management approach includes formal guidelines that govern the etent of eposure to various types of risk, including diversification within asset classes and limits on the eposure to individual investments and counterparties In addition, derivative financial instruments may be used to manage certain risk eposures The Manager also has various internal controls to oversee the Funds investment activities, including monitoring compliance with the investment objectives and strategies, internal guidelines, and securities regulations Please refer to each Fund s Supplemental Schedule to Statement of Investment Portfolio for specific risk disclosures Fair value of financial instruments by using valuation techniques The process of valuing investments for which no quoted market eists is inevitably based on inherent uncertainties and the resulting values may differ from values that would have been used had an active market eisted for these investments The valuation of such securities can be based on various valuation techniques that could include mathematical models, comparable valuation models, fundamental valuation models, or other techniques that would reflect the specific business situation or market the security operates within The models would use observable market data as inputs where possible However, in some instances, certain investments are fair valued based on assumptions that may not be supported by observable inputs Securities without observable market value inputs in their valuation require judgement in establishing their fair value Changes in any of these assumptions could affect the reported fair value of financialassets or financialliabilities For Funds that hold Level3 investments, a reconciliation from the beginning balances to ending balances is included in the Supplemental Schedule to Statement of Investment Portfolio In addition, the impact of using reasonable alternative assumptions for valuing Level 3 investments is disclosed Credit risk Credit risk is the risk that a counterparty to a financial instrument, such as a fied income security or a derivative contract, will fail to discharge an obligation or commitment that it has entered into with the Funds The value of fied income securities and derivatives as presented on the Statement of Investment Portfolio includes consideration of the creditworthiness of the issuer and, accordingly, represents the maimumcredit risk eposure of the Funds Certain Funds may invest in short-term fied income securities issued or guaranteed primarily by the Government of Canada or any Canadian provincial government, obligations of Canadian chartered banks or trust companies, and commercial paper with approved credit ratings The risk of default on these short-term fied income securities is considered low and these securities primarily have credit ratings of A-1 (Low) or higher (as rated by Standard & Poor s, a division of McGraw-Hill Financial Inc or equivalent rating from another rating service) 8

9 Notes to Financial Statements p/3 Currency risk Currency risk is the risk that the value of an investment will fluctuate due to changes in foreign echange rates This is because certain Funds may invest in securities denominated or traded in currencies other than the Fund s reporting currency Interest rate risk Prices of fied income securities generally increase when interest rates decline and decrease when interest rates rise This risk is known as interest rate risk Prices of longer-term fied income securities will generally fluctuate more in response to interest rate changes than would shorter-term securities Due to the nature of short-term fied income securities with a remaining term-to-maturity of less than one year, these investments are not generally eposed to a significant risk that their value willfluctuate in response to changes in the prevailing levels of market interest rates Liquidity risk The Funds are eposed to daily cash redemptions of redeemable units Generally, the Funds retain sufficient cash and cash equivalent positions to maintain adequate liquidity However, liquidity risk also involves the ability to sell an asset for cash easily and at a fair price Some securities are illiquid due to legal restrictions on their resale, the nature of the investment, or simply a lack of interested buyers for a particular security or security type Certain securities may become less liquid due to changes in market conditions, such as interest rate changes or market volatility, which could impair the ability of a Fund to sell such securities quickly or at a fair price Difficulty in selling securities could result in a loss or lower return for a Fund Other price/market risk Other price/market risk is the risk that the value of investments will fluctuate as a result of changes in market conditions Several factors can influence market trends, such as economic developments, changes in interest rates, political changes, and catastrophic events All investments are eposed to other price/market risk b) Investment Transactions, Income Recognition, and Recognition of Realized and Unrealized Gains and Losses i) Each transaction of purchase or sale of a portfolio asset by a Fund is reflected in the net assets no later than the first computation of net assets made after the date on which the transaction becomes binding upon the Fund ii) Interest income is recorded on the accrual basis iii) Dividend income is recorded on the e-dividend date iv) Securities that are echange-traded are recorded at fair value, established by the closing bid price v) Realized gains and losses on investments and unrealized appreciation or depreciation of investments are calculated using the average cost, ecluding transaction cost, of the related investments vi) Other income is the sum of income, ecluding transaction costs, other than that which is separately classified on the Statements of Operations c) Portfolio Securities The cost of securities of the Fund is determined in the following manner Securities are purchased and sold at a market-traded price to arrive at a value for the position traded The total purchased value represents the total cost of the security to the Fund When additional units of the same security are purchased, the cost of those additional units is added to the total security cost When units of the same security are sold, the proportionate cost of the units of the security sold is deducted from the total security cost If there is a return of capital paid by a security, the amount of this return of capital is deducted from the total security cost This method of tracking security cost is known as average cost and the current totalfor any one security is referred to as the adjusted cost base or ACB of the security Transaction costs incurred in portfolio transactions are ecluded from the average cost of investments and are recognized immediately in net income and are presented as a separate epense item in the financial statements The difference between the current value of securities and their average cost, ecluding transaction costs, represents the unrealized appreciation (depreciation) in value of the portfolio investments The applicable period change in unrealized appreciation (depreciation) of investments is included on the Statements of Operations Short-term investments on the Statement of Investment Portfolio are presented at their fair value Accrued interest for bonds is disclosed separately on the Statements of Net Assets d) Foreign Echange The value of investments and other assets and liabilities denominated in foreign currencies is translated into Canadian dollars (ecept for Renaissance US Money Market Fund, Renaissance US Dollar Corporate Bond Fund, and Renaissance US Dollar Diversified Income Fund, which are valued in US dollars) at the current rates prevailing on each Valuation Date (as defined in note 3) Purchases and sales of investments, income, and epenses are translated into Canadian dollars at the foreign echange rates prevailing on the dates of such transactions Foreign currency translation gains (losses) on investments and income transactions are included in Net realized gain (loss) on foreign currency and in Income, respectively, on the Statements of Operations e) Forward Foreign Currency Contracts The Funds may enter into forward foreign currency contracts for either hedging or non-hedging purposes where such activity is consistent with their investment objectives and as permitted by the Canadian securities regulatory authorities Changes in the value of forward foreign currency contracts are recorded as Unrealized gain or loss on forward foreign currency contracts on the Statements of Net Assets, and are recorded as an Increase (decrease) in unrealized appreciation (depreciation) of investments during the applicable period on the Statements of Operations The gain or loss arising from the difference between the value of the original forward foreign currency contract and the value of such contract at close or delivery is realized and recorded as Net realized gain (loss) on foreign currency for Funds that use the forward foreign currency contracts for hedging, or as Income (loss) from forward foreign currency contracts for Funds that do not use the forward foreign currency contracts for hedging f) Forward Agreement Renaissance Corporate Bond Capital Yield Fund Renaissance Corporate Bond Capital Yield Fund (the Fund within note 2(f)) has entered into forward agreements (the Forward Agreements) in order to earn the economic return of Renaissance Corporate Bond Fund (the Reference Fund), which is consistent with the Fund s investment objective The Fund has entered into the Forward Agreements with financial institutions, referred to as counterparties The Forward Agreements result in the Fund having credit eposure to the counterparties or guarantors Under each of the Forward Agreements, the Fund has forward-sold a portfolio of Canadian equity securities for a price determined with reference to the totalreturn of an investment in securities of the Reference Fund The Fund has pledged a portfolio of Canadian equity securities to the counterparty as security for the Fund s obligation under the Forward Agreements In order to permit the Fund to satisfy any requirements to pay epenses, fees, distributions, or redemptions, the terms of the Forward Agreements allow for partial or early settlement or termination of the Forward Agreements prior to their maturity The Fund paid fees to the counterparties of up to 50 basis points based upon the notional value of the Forward Agreements reported as part of the transactions costs in the Statements of Operations The amount to be received (or paid) on the Forward Agreement is recognized as Unrealized gain or loss on forward agreements on the Statements of Net Assets over the life of the agreements Unrealized gains are reported as an asset and unrealized losses are reported as a liability on the Statements of Net Assets A realized gain or loss is recorded upon early or partial termination and maturity of the Forward Agreement and is recorded as Net realized gain (loss) on forward agreements Changes in the amount to be received (or paid) on the Forward Agreement are recorded as Increase (decrease) in unrealized appreciation (depreciation) of forward agreements on the Statements of Operations On September 13, 2013, the Department of Finance released draft legislative proposals for a number of the measures that were first introduced as part of the 2013 federal budget on March 21, 2013 These legislative proposals were incorporated into a bill that was introduced in the federal House of Commons and achieved first reading on October 22, 2013 Therefore, these legislative proposals have become substantively enacted for purposes of Canadian GAAP The proposals include a measure aimed at ensuring that derivative transactions cannot be used to convert ordinary income into capital gains through so-called character conversion transactions Given the significant impact of these proposals on investors, transitional relief with respect to their application was provided on July 11, 2013 and was outlined in the legislative proposals introduced on September 13, 2013, provided certain conditions were met by the respective investment fund Based on these legislative changes, the Manager epects that investment returns derived from the sale of the Canadian equity securities pursuant to the forward contracts entered into by the Fund will continue to be treated as capital gains until the end of 2014 Effective close of business on August 23, 2013, all classes of units offered by the Fund are closed to new purchases and switches, with the eception of purchases made through the Pre-authorized Chequing Plan for which instructions were in place on or before March 21, 2013 This decision 9

10 p/4 Notes to Financial Statements was made after careful consideration of the July 11, 2013 Department of Finance announcement on proposed changes to the transitional rules for the character conversion measure announced in the 2013 Federal Budget The Manager is pursuing this course of action in order to protect the integrity of the Fund and act in the best interests of eisting unitholders On September 19 th, 2014, the Manager announced its intention to wind down the Forward Agreements and merge the Renaissance Corporate Bond Fund (the Terminating Fund ) with the Renaissance Corporate Bond Capital Yield Fund (the Continuing Fund ) Following the merger, the Manager will change the name of the Continuing Fund to Renaissance Corporate Bond Fund The changes are epected to be effective on or about December 5, 2014 g) Futures Contracts The margin deposits with brokers relating to futures contracts are included in Margin on the Statements of Net Assets Any change in the margin requirement is settled daily and included in Receivable for portfolio securities sold or Payable for portfolio securities purchased on the Statements of Net Assets Any difference between the settlement value at the close of business on each Valuation Date and the settlement value at the close of business on the previous Valuation Date is recorded as Income (loss) from futures contracts on the Statements of Operations h) Options Premiums paid for purchased call and put options are included in Investments at current value on the Statements of Net Assets When a purchased option epires, the Fund will realize a loss in the amount of the cost of the option For a closing transaction, the Fund will realize a gain or loss depending on whether the proceeds are greater or less than the premium paid at the time of purchase When a purchased call option is eercised, the cost of the security purchased is increased by the premium paid at the time of purchase Premiums received from writing options are included in Investments at current value on the Statements of Net Assets as initial reductions in the value of investments Premiums received from writing options that epire uneercised are recorded as Income on the Statements of Operations For a closing transaction, if the cost of closing the transaction eceeds the premium received, the Funds will record a realized loss, or if the premium received at the time the option was written is greater than the amount paid, the Funds will record a realized gain If a written put option is eercised, the cost for the security delivered is reduced by the premiums received at the time the option was written i) Securities Lending The Funds may lend portfolio securities in order to earn additional revenue, which is disclosed on the Statements of Operations The loaned assets of any one Fund are not permitted to eceed 50% of the current value of the assets of that Fund (ecluding collateral debt for the loaned securities) The minimum allowable collateral is 102% of the current value of the loaned securities as per the requirements of National Instrument Investment Funds Collateral can consist of the following: i) Cash ii) An evidence of indebtedness that is issued or fully and unconditionally guaranteed as to the principal and interest by: a) the government of Canada, or a province or territory of Canada; b) the government of the United States of America or the government of one of the states of the United States of America; c) the government of another sovereign state, or a permitted supranational agency, if, in each case, the evidence of indebtedness has an approved credit rating; or d) a Canadian financial institution or a financial institution that is not incorporated or organized under the laws of Canada or of a province or territory of Canada, if, in either case, evidences of indebtedness of that issuer or guarantor that are rated as short-term debt by an approved credit rating organization have an approved credit rating iii) Irrevocable letters of credit issued by a Canadian financial institution, if evidences of indebtedness of the Canadian financial institution that are rated as short-term debt by an approved credit rating organization have an approved credit rating iv) Securities that are immediately convertible into securities of the same issuer, class, or type, and the same term, as the securities loaned v) Commercial paper with a term to maturity of 365 days or less with an approved credit rating and that was issued by a company other than a government or permitted supranational agency The market value of the loaned securities is determined on the close of any Valuation Date and any additional required collateral is delivered to the Funds on the net business day The securities on loan continue to be included on the Statement of Investment Portfolio and are included in the total value on the Statements of Net Assets in Investments at current value Where applicable, a Fund s securities lending transactions are reported in footnote Securities Lending on the Statements of Net Assets j) Multi-Class Structured Funds Each Fund may issue an unlimited number of classes of units The realized and unrealized capital gains or capital losses, income, and common epenses (other than class-specific operating epenses and management fees) of the Fund are allocated on each Valuation Date to the unitholders in proportion to the respective prior day s net asset value, which includes unitholder trade(s) dated for that day, of each class at the date on which the allocation is made Class-specific operating epenses and management fees do not require allocation All class-specific operating epenses are paid by the Manager and are collected from the Funds on a recoverable basis k) Other Assets and Liabilities Other assets and liabilities are recorded at cost, which approimates their fair value l) Legend for Abbreviations The following is a list of abbreviations (foreign currency translation and others) that may be used in the Statements of Investment Portfolio: Currency Abbreviations AUD Australian Dollar KRW South Korean Won BRL Brazilian Real MXN Meican Peso CAD Canadian Dollar MYR Malaysian Ringgit CHF Swiss Franc NOK Norwegian Krone CLP Chilean Peso NZD New Zealand Dollar CNY Chinese Renminbi PHP Philippine Peso CZK Czech Koruna PLN Polish Zloty DKK Danish Krone RUB Russian Ruble EUR Euro SEK Swedish Krona GBP British Pound SGD Singapore Dollar HKD Hong Kong Dollar THB Thai Baht HUF Hungarian Forint TRY New Turkish Lira IDR Indonesian Rupiah TWD Taiwan Dollar INR Indian Rupee USD United States Dollar JPY Japanese Yen Other Abbreviations ADR American Depositary Receipt iunits Inde Units Securities ADC Austrian Depositary Certificates LEPOs Low Eercise Price Options 10

11 Notes to Financial Statements p/5 CVO Contingent Value Obligations International MSCI Morgan Stanley Capital Inde ETF Echange-Traded Fund OPALS Optimized Portfolios as Listed GDR Global Depositary Receipt Securities PERLES Performance Linked to Equity IPN International Participation Note REIT Real Estate Investment Trust ishares Inde Shares SDR Swedish Depositary Receipt m) International Financial Reporting Standards (IFRS) Investment companies that are publicly accountable enterprises or investment Funds to which National Instrument Investment Fund Continuous Disclosure is applicable, are required to adopt IFRS for the first time for interim and annual financial statements relating to annual periods beginning on or after January 1, 2014 As a result, the Funds will adopt IFRS beginning September 1, 2014 and publish their first financial statements, prepared in accordance with IFRS, for the interim period ending February 28, 2015 The 2015 semi-annual and annual financial statements will include 2014 comparative financial information and opening Statements of Financial Position as at September 1, 2013, also prepared in accordance with IFRS The Manager continues to eecute its transition plan to complete the changeover to IFRS for the Funds in 2014 and comply with the required timetable for continuous disclosure As at August 31, 2014, the impact to the financial statements based on the Manager s assessment of the differences between current Canadian GAAP and IFRS are as follows: l l IFRS 13 Fair Value Measurement permits the use of mid-market prices or other pricing conventions that are used by market participants as a practical epedient for fair value measurements within a bid-ask spread The Funds willadopt accounting policies for the valuation of investments to utilize mid-market prices that align more closely with the calculation of net asset value (NAV) used to price unitholder transactions (Transaction NAV) As a result, net assets for current financial reporting purposes (GAAP NAV) will be impacted and is epected to align with Transaction NAV, eliminating the need for a NAV per unit reconciliation The impact to the Statements of FinancialPosition as at September 1, 2013 and August 31, 2014 is disclosed in these financialstatements in the reconciliation of net assets per unit as at August 31, 2014, and 2013 IFRS 10 Consolidated Financial Statements provides an eception to the consolidation requirements and requires an investment entity to account for its subsidiaries at fair value through profit or loss The Manager has concluded that each of the Funds meet the definition of an investment entity as at September 1, 2013 and throughout the period ended August 31, 2014 l Units of the Funds are puttable instruments and are required to be presented as equity or liability depending on certain criteria As at September 1, 2013 and throughout the period ended August 31, 2014, units of the Funds did not meet the criteria to be classified as equity As a result, unitholders' equity will be presented as a liability on the Statements of Financial Position l IFRS requires the presentation of a Statement of Cash Flows, including comparatives for 2014 The Funds have not previously presented this statement as permitted by current Canadian GAAP In addition, other statements presented will be renamed as follows: Canadian GAAP Statements of Net Assets Statements of Operations Statements of Changes in Net Assets Statement of Investment Portfolio IFRS Statements of Financial Position Statements of Comprehensive Income Statements of Changes in Net Assets Attributable to Holders of Redeemable Units Schedule of Investment Portfolio l Other reclassifications, presentation differences and additional disclosures will also be required in the financial statements to comply with the new requirements under IFRS 3 Valuation of Investments The valuation date for a Fund is any day when the Manager s head office is open for business (Valuation Date) The Trustee may, at its discretion, establish other Valuation Dates The value of the investments or assets of a Fund is determined as follows: a) Cash and Other Assets Cash, accounts receivable, dividends receivable, distributions receivable, and accrued interest are valued at fair value or at their recorded cost, plus or minus any foreign echange between recognition of the asset by the Fund and the current Valuation Date, which approimates fair value Short-term investments (money market instruments) are valued at fair value b) Bonds, Debentures, and Other Debt Obligations Bonds, debentures, and other debt obligations are valued at current value using the bid price provided by a recognized vendor upon the close of trading on a Valuation Date c) Listed Securities, Unlisted Securities, and Fair Value Pricing of Foreign Securities Any security that is listed or traded on a securities echange is valued at fair value using the closing bid price (with the eception of Renaissance Corporate Bond Capital Yield Fund, for which securities pledged under the Forward Agreement are valued at closing market prices) or, if there is no closing bid price on that echange and in the case of securities traded on an over-the-counter market, at the fair value as determined by the Manager as an appropriate basis for valuation In such situations, a fair value will be determined by the Manager to establish current value If any securities are inter-listed, or traded on more than one echange or market, the Manager will use the principal echange or market for the fair value of such securities For Renaissance Corporate Bond Capital Yield Fund, securities pledged under the Forward Agreement are valued at closing market prices as they are offsetting risk positions against the value of the Forward Agreement Units of each mutual fund in which a Fund invests will be valued at fair value using the most recent net asset value quoted by the trustee or Manager of the mutual fund on the Valuation Date Unlisted securities are valued at fair value using the bid price quoted by a recognized dealer, or the Manager may determine a price that more accurately reflects the fair value of these securities if the Manager feels the bid price does not reflect fair value Fair value pricing is designed to avoid stale prices and provide a more accurate current value, and may assist in the deterrence of harmful short-term or ecessive trading in the Funds When securities listed or traded on markets or echanges that close prior to North or South American markets or echanges are valued by the Manager at their fair market value, instead of using quoted or published prices, the prices of such securities used to calculate the Fund s net assets or net asset value may differ from quoted or published prices of such securities d) Derivatives Long positions in options, debt-like securities, and listed warrants are valued at fair value using the closing bid price as established on either their principal trading echange or by a recognized dealer in such securities The credit rating of each counterparty (as rated by Standard & Poor s) meets or eceeds the minimum approved credit rating When any option is written by any Fund, the premium received by the Fund will be reflected as a liability that will be valued at an amount equal to the fair value of the option that would have the effect of closing the position Any difference resulting from revaluation shall be treated as an unrealized gain or loss on investment; the liability shall be deducted in arriving at the net assets of the Fund The securities that are the subject of a written options, if any, will be valued in the manner described above for listed securities Futures contracts, forward contracts, or swaps willbe valued at fair value of the gain or loss, if any, that would be realized on the Valuation Date if the position in the futures contracts, forward contracts, or swaps were to be closed out Margin paid or deposited in respect of futures contracts and forward contracts will be reflected as an account receivable and margin consisting of assets other than cash will be noted as held as collateral Other derivatives and margin are valued at fair value in a manner that the Manager determines to represent their current value e) Restricted Securities Restricted securities purchased by any Fund will be valued at fair value in a manner that the Manager determines to represent their current value 11