International Equity Value Pool

Transcription

1 This semi-annual management report of fund performance contains financial highlights but does not contain the complete semi-annual or annual financial statements of the investment fund. You can get a copy of the semi-annual or annual financial statements at your request, and at no cost, by calling , by writing to us at United Financial, 2 Queen Street East, Twentieth Floor, Toronto, ON, M5C 3G7 or by visiting our website at or SEDAR at Securityholders may also contact us using one of these methods to request a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure. RESULTS OF OPERATIONS The net asset value of the Fund increased by $17.8 million to $393.1 million from December 31, 17 to June, 18. The Fund had net sales of $7.8 million for the period. The portfolio s performance increased assets by $. million. Class W units returned 3.1%, after fees and expenses for the six-month period ended June, 18. Over the same time period, the Fund s benchmark returned 2.4%. The benchmark is the MSCI EAFE Total Return Index. The performance of the Fund s other classes is substantially similar to that of Class W units, except for differences in the structure of fees and expenses. For the returns of the Fund s other classes, please refer to the Past performance section. The Fund outperformed its benchmark for the six months ending June, 18. In the first quarter, policy matters had an important impact on markets, as growing concerns about protectionism, trade tensions, and rising interest rates contributed to the increase in volatility. Investment performance was mixed across asset classes in the second quarter against a backdrop of stronger economic growth in the U.S. and China, election uncertainties, particularly in Italy and Mexico, intensifying trade tensions, and central banks transition away from policy stimulus and quantitative easing to quantitative tightening. Holdings in financials, health care, and materials outperformed, while information technology, energy, and consumer staples weighed on relative performance. THK Co. Ltd., a maker of linear motion guides and ball screws, components that are used in various industrial manufacturing processes. TDC, the leading Danish telecommunications operator. New positions over the period include the following: Scor SA, one of the world s largest reinsurers. Liberty Global PLC, a cable operator providing pay-tv, broadband data, and voice telephony services. ING Groep NV, a financial conglomerate operating in banking and insurance in Europe, the U.S., and Asia. Siam Commercial Bank, a leading commercial bank in Thailand. Turkiye Garanti Bankasi AS, the second-largest private sector bank in Turkey. RECENT DEVELOPMENTS After several decades of unending global trade expansion, tensions are increasing and the outlook for globalization is murky at best. The headlines alone have many ramifications, not the least of which may be reduced corporate investment activity, as fear and uncertainty can often lead to stasis. As we get closer to the end of this economic cycle, it appears governments and central banks are running out of firepower, especially the United States, given its increasing deficit and enormous central bank balance sheet. Our respect for these considerations contributes to the embedded conservatism in our company analysis and overall portfolio positioning. In financials, AXA SA, a French insurer, plans to acquire XL Group for a 33% premium at the time of the offer, given its attractive insurance franchise, particularly in the U.S. In health care, Astellas Pharma Inc., a Japanese pharmaceutical company, continued to see an upturn in positive sentiment, as Xtandi, its key prostate drug, recovers from several external factors. In materials, Linde AG outperformed after reporting better-than-expected first quarter results and as it moves closer to merging with its peer, Praxair. In the information technology sector, Yahoo Japan Corp. came under pressure after it announced plans to increase investment, which will further pressure its operating profit, and did not announce a share buyback from Altaba Inc., which owns 36% of its stock. Energy holding Inpex Corp., a Japanese exploration and production company, declined on the poor reception of its new five-year business plan. We believe the guidance is overly conservative and can be exceeded. In consumer staples, Magnit, a leading Russian food retailer, saw weak fourthquarter results announced in January and the resignation of its founder/ceo in February. However, Magnit recently showed stabilization in its same-store sales. Positions sold during the period: Kasikornbank, a major banking group in Thailand. China Mengniu Dairy Co. Ltd., involved in the manufacture and distribution of dairy products in China. Despite the many risks ahead, we continue to find significant value in the small list of companies we hold. We believe it remains prudent to focus on investments that offer an attractive trade-off between risk and return. This has led our portfolio to differ the most from world markets in several years given the increased opportunities outside of crowded investments such as large-cap technology and global consumer discretionary. Our investments are concentrated in undervalued companies with strong management teams that have greater control over medium-term profitability and are less reliant on the global economic cycle. Effective April 3, 18, Karen Fisher became a member of the CI Board of Governors ( BOG ) and the Independent Review Committee ( IRC ) of the Fund. Meanwhile, Christopher Hopper resigned from the role as a member of the BOG and IRC. RELATED PARTY TRANSACTIONS Manager and Trustee CI Investments Inc. is the Manager and Trustee of the Fund. CI Investments Inc. is a subsidiary of CI Financial Corp. The Manager, in consideration of management fees, provided management services required in the day-to-day operations of the Fund. The Manager bears all of the operating expenses of the Fund (other than taxes, borrowing costs and new governmental fees) in return for a fixed administration fee. CIG

2 Management fee and fixed administration fee rates as at June, 18, for each of the classes are shown below: Annual management fee rate (%) Annual fixed administration fee rate (%) Class A Class E Class E Class E Class E the IRC of any material breach of a condition of the standing instructions. The standing instructions require, among other things, that investment decisions in respect of related party transactions (a) are free from any influence by an entity related to the Manager and without taking into account any consideration relevant to an entity related to the Manager; (b) represent the business judgment of the Manager uninfluenced by considerations other than the best interests of the Fund; (c) are made in compliance with the Manager s policies and procedures; and (d) achieve a fair and reasonable result for the Fund. Transactions made by the Manager under the standing instructions are subsequently reviewed by the IRC on a quarterly basis to monitor compliance. The Fund relied on the IRC s standing instructions regarding Related Party Transactions during this reporting period. Class F.9.22 Class F Class F Class F5.77. Class I Paid directly by investor - Class OF Class W Paid directly by investor.22 The Manager received $1.6 million in management fees and $.3 million in fixed administration fees for the period. Management Fees Approximately 15% of total management fees were used to pay for sales and trailing commissions and other services required. The remaining 85% of management fees were used to pay for investment management and other general administration. Principal Distributor The Manager has the exclusive right to arrange for the distribution of units of the Fund. Pursuant to a series of agreements, the right to distribute such units has been granted, on a collective basis, to the following dealers, each of which is an affiliate of the Manager. Assante Capital Management Ltd. Assante Financial Management Ltd. Independent Review Committee The Fund received standing instructions from the Fund s Independent Review Committee with respect to the following related party transactions: a) trades in securities of CI Financial Corp.; b) purchases or sales of securities of an issuer from or to another investment fund managed by the Manager; c) purchases or sales of other investment funds managed by the Manager or their affiliates; and d) mergers involving the Fund and another fund managed by the Manager that is subject to National Instrument Investment Funds. The applicable standing instructions require that related party transactions be conducted in accordance with the Manager s policies and procedures and that the Manager advise

3 FINANCIAL HIGHLIGHTS The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the past six periods, as applicable. Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding gains (losses) for gains (losses) for (decrease) from income (excluding From From capital Total at the end of the period of period (2) revenue distributions) the period the period operations (2) dividends) dividends (2, 3) gains Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class A Commencement of operations December 28, 6 Jun., (.15).49 (.) Dec. 31, (.29) Dec. 31, (.25).39 (.19) Dec. 31, (.26) Dec. 31, (.23).36 (.15) Dec. 31, (.) Class E Commencement of operations September, 8 Jun., (.18).71 (.47) Dec. 31, (.34) Dec. 31, (.29) Dec. 31, (.29) Dec. 31, (.26).53 (.26) Dec. 31, (.22) Class E3 Jun., (.12).49 (.36) Dec. 31, (.16).71 (.69) Class E4 Jun., (.12). (.37) Dec. 31, (.15).7 (.69) Class E5 Jun., (.11). (.39) Dec. 31, (.14).72 (.65) Class F Jun., (.7). (.46) Dec. 31, (.9).73 (.39) *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

4 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding gains (losses) for gains (losses) for (decrease) from income (excluding From From capital Total at the end of the period of period (2) revenue distributions) the period the period operations (2) dividends) dividends (2, 3) gains Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class F3 Jun., (.7). (.42) Dec. 31, (.8).68 (.41) Class F4 Jun., (.6).51 (.38) Dec. 31, (.7).73 (.) Class F5 Jun., (.5). (.34) Dec. 31, (.7).69 (.47) Class I Commencement of operations September 18, 8 Jun., (.71) Dec. 31, Dec. 31, Dec. 31, Dec. 31, (.36) Dec. 31, Class OF Commencement of operations October 5, 7 Jun., (.11).56 (.38) Dec. 31, (.22).98 (.) Dec. 31, (.19) Dec. 31, (.18) Dec. 31, (.16) Dec. 31, (.14) Class W Commencement of operations May 1, Jun., (.3) 1.22 (.83) Dec. 31, (.6) Dec. 31, (.5).93 (.22) Dec. 31, (.5) Dec. 31, (.4).82 (.37) Dec. 31, (.4) *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

5 FINANCIAL HIGHLIGHTS (cont d) (1) This information is derived from the Fund s semi-annual and annual financial statements. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant class at the relevant time. The increase (decrease) in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant class over the fiscal period. (3) Distributions are automatically reinvested in additional units of the Fund. (4) This information is provided for the period ended June, 18 and the years ended December 31.

6 FINANCIAL HIGHLIGHTS (cont d) Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) Management expense ratio before taxes (2) Management expense ratio after taxes (2) Effective HST rate for the period (2) Harmonized Trading Portfolio sales tax (2) expense ratio (3) turnover rate (4) $ s s % % % % % % Class A Commencement of operations December 28, 6 Jun., 18 7, Dec. 31, 17 8, Dec. 31, 16,163 1, Dec. 31, 15 13,384 1, Dec. 31, 14 16,65 2, Dec. 31, 13 21,347 2, Class E Commencement of operations September, 8 Jun., ,14 8, Dec. 31, ,269 8, Dec. 31, ,, Dec. 31, ,696 8, Dec. 31, 14 96,377 8, Dec. 31, 13 71,488 6, Class E3 Jun., 18 24,259 2, Dec. 31, 17 22,596 2, Class E4 Jun., 18 3, Dec. 31, 17 2, Class E5 Jun., 18 1, Dec. 31, 17 1, Class F Jun., 18 3, Dec. 31, 17 2, *Footnotes for the tables are found at the end of the Financial Highlights section.

7 FINANCIAL HIGHLIGHTS (cont d) Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) Management expense ratio before taxes (2) Harmonized sales tax (2) Management expense ratio after taxes (2) Effective HST rate for the period (2) Trading expense ratio (3) Portfolio turnover rate (4) $ s s % % % % % % Class F3 Jun., 18 1, Dec. 31, Class F4 Jun., Dec. 31, Class F5 Jun., Dec. 31, Class I Commencement of operations September 18, 8 Jun., 18 8,725 5, Dec. 31, 17 96,4 4, Dec. 31, 16 62,366 3, Dec. 31, 15 48,916 2, Dec. 31, 14 32,742 2, Dec. 31, 13,774 1, Class OF Commencement of operations October 5, 7 Jun., Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Class W Commencement of operations May 1, Jun., ,88 4, Dec. 31, ,613 4, Dec. 31, ,337 5, Dec. 31, ,3 5, Dec. 31, ,79 7, Dec. 31, 13 1,753 9, *Footnotes for the tables are found at the end of the Financial Highlights section.

8 FINANCIAL HIGHLIGHTS (cont d) (1) This information is derived from the Fund s semi-annual and annual financial statements. (2) Management expense ratio is calculated based on expenses charged to the Fund (excluding commissions and other portfolio transaction costs) and is expressed as an annualized percentage of daily average net assets for the period, including the Fund s proportionate share of any underlying fund(s) expenses, if applicable. The Effective HST tax rate is calculated using the attribution percentage for each province based on unitholder residency and can be different from 13%. (3) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net assets during the period, including the Fund s proportionate share of such expenses of any underlying fund(s), if applicable. (4) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of % is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the fiscal period. The higher a Fund s portfolio turnover rate in a period, the greater the trading costs payable by the Fund in the period, and the greater the chance of an investor receiving taxable capital gains in the period. There is not necessarily a relationship between a higher turnover rate and the performance of a Fund. Portfolio turnover rate is calculated by dividing the lesser of the cost of purchases and the proceeds of sales of portfolio securities for the period, and excluding cash and short-term investments maturing in less than one year, and before assets acquired from a merger, if applicable, by the average of the monthly fair value of investments during the period. (5) This information is provided for the period ended June, 18 and the years ended December 31.

9 PAST PERFORMANCE This section describes how the Fund has performed in the past. Remember, past returns do not indicate how the Fund will perform in the future. The information shown assumes that distributions made by the Fund in the periods shown were reinvested in additional units of the relevant classes of the Fund. In addition, the information does not take into account sales, redemption, distribution or other optional charges that would have reduced returns or performance. Year-by-Year Returns The following charts show the Fund s semi-annual and annual performance for each of the periods shown and illustrate how the Fund s performance has changed from period to period. In percentage terms, the charts show how much an investment made on the first day of each financial period would have grown or decreased by the last day of each financial period, except where noted. Class A Class E Class E3 Class E Dec. 8 Dec. 9 Dec. Dec. 11 Dec. 12 Dec. 13 Dec. 14 Dec. 15 Dec. 16 Dec. 17 Jun. 18 Dec. 8 Dec. 9 Dec. Dec. 11 Dec. 12 Dec. 13 Dec. 14 Dec. 15 Dec. 16 Dec. 17 Jun. 18 Dec. 17 Jun. 18 Dec. 17 Jun. 18 Class E5 Class F Class F3 Class F Dec. 17 Jun. 18 Dec. 17 Jun. 18 Dec. 17 Jun. 18 Dec. 17 Jun. 18 Class F5 Class I Class OF Class W Dec. 17 Jun. 18 Dec. 8 Dec. 9 Dec. Dec. 11 Dec. 12 Dec. 13 Dec. 14 Dec. 15 Dec. 16 Dec. 17 Jun. 18 Dec. 8 Dec. 9 Dec. Dec. 11 Dec. 12 Dec. 13 Dec. 14 Dec. 15 Dec. 16 Dec. 17 Jun. 18 Dec. 8 Dec. 9 Dec. Dec. 11 Dec. 12 Dec. 13 Dec. 14 Dec. 15 Dec. 16 Dec. 17 Jun return is for the period from September, 8 to December 31, return is for the period from May 1, 17 to December 31, return is for the period from September 18, 8 to December 31, 8.

10 SUMMARY OF INVESTMENT PORTFOLIO as at June, 18 Category % of Net Assets Category % of Net Assets Top 25 Holdings % of Net Assets Country allocation Japan U.K Switzerland Germany France Netherlands Ireland Cash & Equivalents Jersey Island Bermuda Brazil Israel Hong Kong Thailand Netherlands Antilles Mexico Sweden Cayman Islands India....8 Luxembourg....7 South Korea....5 Turkey....3 Russia....3 Other Net Assets (Liabilities)....1 Sector allocation Financials Health Care Information Technology....3 Consumer Staples....1 Materials Telecommunication Services Consumer Discretionary Energy Cash & Equivalents Industrials Utilities....6 Other Net Assets (Liabilities)....1 Cash & Equivalents Chubb Ltd Astellas Pharma Inc GlaxoSmithKline PLC Aon PLC Tokio Marine Holdings Inc Sumitomo Mitsui Trust Holdings Inc Zurich Financial Services AG Vodafone Group PLC, ADR Medtronic PLC Henkel AG & Co., KGaA, Preferred, Non-Voting Shares Sanofi S.A Willis Towers Watson PLC XL Group Ltd Shire PLC Roche Holding AG Novartis AG, Registered Shares Linde AG Nestle S.A., Registered Shares MS&AD Insurance Group Holdings Inc Mitsubishi UFJ Financial Group Inc Heineken N.V Japan Exchange Group Inc Yahoo! Japan Corp Akzo Nobel N.V Total Net Assets (in $ s) $393,2 The summary of investment portfolio may change due to ongoing portfolio transactions of the Fund and updates will be available on a quarterly basis. A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, its future performance, strategies or prospects, and possible future Fund action. The words may, could, should, would, suspect, outlook, believe, plan, anticipate, estimate, expect, intend, forecast, objective, and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance. Forward-looking statements involve inherent risks and uncertainties, both about the Fund and general economic factors, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made by the Fund. These factors include, but are not limited to, general economic, political and market factors in Canada, the United States and internationally, interest and foreign exchanges rates, global equity and capital markets, business competition, technological changes, changes in laws and regulations, judicial or regulatory judgments, legal proceedings and catastrophic events. The above list of important factors that may affect future results is not exhaustive. Before making any investment decisions, we encourage you to consider these and other factors carefully. All opinions contained in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.