Macquarie Global Infrastructure Income Fund. Semi-Annual Financial Statements

Transcription

1 Macquarie Global Infrastructure Income Fund Semi-Annual Financial Statements June 30, 2017

2 MANAGEMENT REPORT OF FUND PERFORMANCE This semi-annual management report of fund performance for Macquarie Global Infrastructure Income Fund (the Fund ) contains financial highlights but does not contain the complete semi-annual financial statements of the Fund. The semi-annual financial statements and accompanying notes are attached to this report. You can obtain a copy of the semi-annual financial statements at no cost by writing to LOGiQ Asset Management Ltd. (formerly, Aston Hill Capital Markets Inc.) (the Manager ) to the following address: 77 King Street West, Suite 2110, PO Box 92, Toronto, Ontario, M5K 1G8 or calling or visiting the Manager s website at or by visiting Securityholders may also contact us using one of these methods to request a copy of the Fund s proxy voting policies and procedures, proxy voting disclosure record or quarterly portfolio disclosure. THE FUND The Fund is a closed-end investment trust established under the laws of the Province of Ontario pursuant to a Trust Agreement dated as of September 27, 2013 the Manager in its capacity as manager and RBC Investor & Treasury Services (the Trustee ) as trustee of the Fund. On November 30, 2016, Aston Hill Capital Markets Inc. was amalgamated into Aston Hill Asset Management Inc. On December 8, 2016, Aston Hill Asset Management Inc., as part of Aston Hill Financial Inc. ("Aston Hill") and together with Front Street Capital 2004 ("Front Street") and Tuscarora Capital Inc. ("TCI"), an entity under common control with Front Street, completed a previously announced transaction whereby Aston Hill would acquire all of the equity interests in the Front Street and TCI, and the companies would combine their respective operations. As part of the transaction, Aston Hill also changed its name to LOGiQ Asset Management Inc. and consequently Aston Hill Asset Management Inc. changed its name to LOGiQ Asset Management Ltd. INVESTMENT OBJECTIVES AND STRATEGIES The Fund s investment objectives are to generate: i) quarterly distributions for holders of Units (the Unitholders ) initially targeted to be $0.15 per Unit ($0.60 per annum representing an annual cash distribution of 6.0% based on the $10.00 per Unit issue price); and ii) maximize total return for Unitholders, consisting of distributions and capital appreciation; and iii) preserve capital. In order to achieve the Fund s investment objectives, Macquarie Capital Investment Management LLC (the Investment Manager ) invested the net proceeds of the Offering in a portfolio (the Portfolio ) consisting of infrastructure equity securities issued by entities domiciled in global markets. RISK Changes in the risk exposure of the Fund occurred in the following area: Use of leverage The Fund entered into a Margin Loan Agreement (the Credit Agreement ) dated November 14, 2013, between the Manager (on behalf of the Fund) and the Bank of Nova Scotia (the Lender ) to use for various purposes but primarily to purchase additional securities for the Portfolio. Borrowings by the Fund thereunder may be in Canadian or U.S. dollars and shall not exceed 50% of the net assets of the Fund at the time of borrowing. The maximum amount of leverage that the Fund would employ is 1.50:1. During the six-month period ended June 30, 2017, the Fund applied leverage in the range from 32.27% to 39.19% of the NAV or U.S. $4,700,000 to U.S. $6,300,000. The Canadian dollar equivalent fluctuated between approximately $6.1 and $8.7 million. (from 33.03% to 49.03% or U.S. $6.3 to $10.0 million during the six-month period ended June 30, The Canadian equivalent was between approximately $8.0 and $14.0 million). The amount of U.S. $4,700,000 or the Canadian dollar equivalent of $6,103,896 was outstanding as of June 30, 2017 and the leverage factor was 34.09% (As of December 31, 2016, the amount of U.S. $6,300,000 or the Canadian dollar equivalent of $8,448,664 was outstanding and the leverage factor was 38.08%). During the six-month period ended June 30, 2017, the related interest expense was $76,110. (During the sixmonth period end June 30, 2016, the related interest expense was $77,578). For full disclosure of risks associated with an investment in the Fund s units, please refer to the Prospectus dated September 27, 2013 or to the Fund s most recent Annual Information Form. Both are available at or 2

3 INVESTMENT MANAGER COMMENTARY (JULY 2017) Market & Portfolio Review Global infrastructure securities outperformed global equities in the period. Markets started 2017 on a positive note, with business and consumer sentiment hitting recent highs in the US and inflation figures generally coming in above expectations. Economic data continued to show signs that the global slowdown evident in early 2016 is abating. Donald Trump was sworn in as the new US President at the end of January and promptly began pushing against long-held US policies, including bans on immigration and improved regulatory environment for pipelines. Markets continued on a positive note during February, as continued strength in US and global economic indicators helped maintain expectations of a cyclical upswing in growth. Key business surveys on manufacturing and services were strong and beat expectations, indicating a strong outlook for growth in the short term. European political issues remained near the surface and provided a bid to safe haven assets. The first round of French elections delivered a more benign result than had been feared, with centrist Macron leading the voting and Le Pen also reaching the second round. While the result was still significant (with neither major party reaching the second round) the expectation is that Macron will attract most of the remaining voters and comfortably take the Presidency. The result was a rare win (in recent times, at least) for a centrist candidate, and was well received in European markets. As February drew to a close, the US Federal Reserve became increasingly vocal about the possibility of a March rate hike. The Fed followed through on their comments and hiked its short-term rates in March for the third time since the financial crisis, marking an increase in the pace of rate moves. Oil prices weakened over the month of March, breaking back down through $50 a barrel as US supply continued to grow and OPEC s production cuts looked less rigidly applied than hoped. The price moves were only moderate, especially compared to the sell-off witnessed through 2015 and early Market activity was relatively subdued in April, and trading levels remained in recent ranges. There were a couple of key developments, including slowing global momentum in key economic measures, balanced by more positive outcomes from French elections and the start of US earnings season. Global equity markets ended the month modestly up, and government bonds ended near the top of their recent trading range (in price terms), with European markets outperforming as the political risk in that region retreated somewhat. In May, market sentiment was seemingly balanced between negative developments in the political landscape and signs of slowing global growth, against better corporate earnings and continued central bank support. Performance for most markets was modest, with uncertainty still high and pricing for many asset classes near or at record highs. In June there was a message of restraint from central banks, rather than the easy money tone that has been the bulk of the communication for the decade. The US Federal Reserve (Fed) raised its overnight rate for the fourth time since the crisis, and confirmed it was looking at the September meeting to begin unwinding its balance sheet, both moves that were expected. The European Central Bank (ECB) was more of a surprise, with Draghi stating that the level of accommodation could decrease as the economy continues to improve, in contrast to his steadfast dovish stance he had previously held. Within the Fund, the largest sector contributors to return over the half year (in local currency) were Toll Roads, led by Abertis (Spain), Electric Utility, led by Nextera Energy (United States), and Airports, led by Flughafen Zurich (Switzerland). The Water sector was the only detracting sector in the first half of 2016, with Sanepar (Brazil) posting the largest losses in the sector. From a country perspective, positions in the United States, Spain, and Australia contributed strongly to performance, while positions in Netherlands were the largest detractors. At year-end, the Fund s largest sector exposures were in Pipelines, Electric Utility, and Toll Roads. The Fund held small weights in Communications Infrastructure and Electricity Generation. Market Outlook While the overall pace of global growth remains relatively robust, much of the improvements and hope for positive political reforms look already factored into market pricing. It appears that the US political debate is as fractured as it has ever been, and the progress of key reform items has ground to a halt amid numerous distractions. Central banks had always been the backstop if growth were to falter, and we continue to believe this is the case, though again the market wants to embrace the belief in a normalization of rates and a reduction in support. In this environment we believe quality and defensive assets that are underpinned by long-term, stable cash flows will continue to be attractive to investors around the world. 3

4 We expect that the infrastructure assets owned and operated by the portfolio s diversified holdings will continue to perform well operationally and recent results have generally been in line with expectations. We continue to value infrastructure assets using long term interest rates, the path of which is only somewhat influenced by movements in shorter term rates. We will use any market overreactions, to the downside or upside, to take advantage of attractive fundamental valuations. Caution regarding forward-looking statements This document has been prepared by Macquarie Capital Investment Management LLC ( MCIM ). The above commentary and outlook reflects the views of the portfolio managers through June 30, 2017 and may include forward-looking statements. The statements may include projections, estimates and descriptions of future events. These statements are subject to a variety of risks and uncertainties, which may cause actual results to differ materially from this commentary and outlook. The portfolio managers views are subject to change as market and other conditions warrant and should not be construed as a recommendation for any securities discussed herein. Capital transactions On October 22, 2013, the Fund completed its initial public offering pursuant to the Prospectus dated September 27, $50,000,000 was raised through the issue of 5,000,000 units at $10.00 per Unit. Agents fees and issue expenses were $3,375,000 or $0.68 per unit. On October 31, 2013, the Agents exercised an over-allotment option in respect of 380,000 units, raising a further $3,800,000. Agents fees were $199,500 or $0.53 per Unit. During the six-month period ended June 30, 2017, 706,500 units were redeemed for the total value of $7,437,326 (1,034,070 units were redeemed for the total value of $9,546,026 during the six-month period ended June 30, 2016). Market repurchases The Trust Agreement provides that the Fund has the right (but not the obligation), exercisable in its sole discretion, at any time, to purchase Units for cancellation at prices not exceeding the Net Asset Value per Unit, subject to any applicable regulatory requirements and limitations. It is expected that such purchases, if made, will be made as normal course issuer bids through the facilities and under the rules of the exchange or market on which the Units are listed, if applicable, as provided for in the Trust Agreement or as otherwise permitted by applicable securities laws. The Fund did not purchase any Units for cancellation during the six-month period ended June 30, DISTRIBUTIONS The Fund paid quarterly distributions initially at $0.15 per Unit, representing a return of 6.0% per annum on the Unit issue price. The Fund has made all its scheduled distributions during the six-month period ended June 30, 2017, paying $0.30 per Unit ($0.30 per Unit during the six-month period ended June 30, 2016). RECOMMENDATIONS OR REPORTS BY THE INDEPENDENT REVIEW COMMITTEE The Independent Review Committee of the Fund tabled no special reports and made no extraordinary material recommendations to management of the Fund during the six-month period ended June 30, RELATED PARTY TRANSACTIONS Management Fees As compensation for coordinating the organization of and managing the ongoing business and administrative affairs of the Fund, the Manager is entitled to an annual management fee in an amount equal to 1.25% per annum of the Net Asset Value of the Fund to be calculated and payable monthly in arrears, plus applicable taxes. The total management fees charged to the Fund during the six-month period ended June 30, 2017 were $145,680 plus applicable taxes ($173,986 plus applicable taxes during the six-month period ended June 30, 2016). Performance Fee The Performance fee is calculated and accrued monthly and paid annually. The Performance Fee for a given year is equal to 20% of the amount by which the sum of (i) the NAV per Unit (calculated without taking into account the Performance Fee) at the end of such year; plus (ii) distributions paid on such Units during such year, exceeds 106% of the Threshold Amount (the Hurdle Rate ), plus applicable taxes. The Threshold Amount will be the greater of: (i) $10.00; and (ii) the NAV per Unit on the Determination Date in the last fiscal year of the Fund in which a Performance Fee was paid (after payment of such Performance Fee). For the six-month period ended June 30, 2017, the Fund did not pay any performance fees ($Nil during the six-month period ended June 30, 4

5 2016). Administration Fees The Manager allocates back to the Fund a portion of the administration costs relating to the operations of the Fund. The expenses are directly attributable to the Fund as they relate to time spent on Fund accounting, valuation, taxation, compliance, investor relations, financial reporting and unitholder reporting cost management and oversight and any other operations matter. For the six-month period ended June 30, 2017, administration fees amounted to $826 ($4,565 during the six-month period ended June 30, 2016) IRC Fee The IRC has four members, each receive $15,000 per annum ($20,000 for the Chairman) plus $1,250 per meeting for acting in such capacity and are also reimbursed for expenses in connection with performing their duties. These fees and expense reimbursements are allocated across investment funds that are managed by the Manager in a manner that is fair and reasonable. For the six-month period ended June 30, 2017, the Fund paid IRC fees of $1,041 ($742 during the six-month period ended June 30, 2016). PAST PERFORMANCE The following bar chart and table show the Fund s annual and semi-annual performance by showing both semi-annual and annual returns by fiscal year and annualized compound returns from inception assuming all the distributions made by the Fund during the period shown were reinvested. The performance information does not take into account sales, redemptions, distributions or other optional charges that would have reduced returns or performance. The bar chart shows, in percentage terms, how much an investment made on the first day of the period would have grown or decreased by the last day of the period. Past performance is not necessarily indicative of future performance. 5

6 FINANCIAL HIGHLIGHTS The following tables show selected key financial information about the Fund and are intended to aid in understanding the Fund s financial performance since inception. This information is derived from the Fund s unaudited semi-annual and audited annual financial statements: For the years ended June 2017 (6) December 2016 December 2015 December 2014 (5) December 2013 (5) Net Assets, beginning of year $8.90 $9.03 $10.39 $ 8.99 $10.00 Unit issue expenses (1) (0.67) Increase (decrease) from operations Total revenues Total expenses (0.16) (0.32) (0.36) (0.42) (0.07) Realized gains (losses) for the year Unrealized gains (losses) for the year 0.70 (0.15) (1.47) 1.05 (0.33) Total increase (decrease) from operations (2) (0.27) 2.00 (0.23) Distributions to unitholders From income (excluding dividends) (0.18) (0.48) From dividends (0.02) (0.05) (0.08) (0.05) (0.10) From capital gains (0.22) (0.43) Return of capital (0.06) (0.12) (0.34) (0.07) (0.02) Total Distributions to unitholders (3) (0.30) (0.60) (0.60) (0.60) (0.12) Net Assets, end of year (4)(5) $10.03 $ 8.90 $ 9.03 $ $8.99 (1) Issue expense of $3,574,500 incurred in connection with the initial units issuance at inception. The full amount of issue expenses was treated as a reduction of Unit Capital for accounting purposes and is amortized over a year of five years for tax purposes. (2) Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase / decrease from operations is based on the weighted average number of 2,375,308 units outstanding over the six-month period ended June 30, 2017 (June 30, ,356,026) (3) Distributions are paid in cash. The percentages used to allocate distributions among income, dividends, capital gain and return on capital are based on the Fund s tax return. (4) This is not reconciliation between the opening and the closing net assets per unit. (5) The Fund adopted International Financial Reporting Standards ( IFRS ) commencing January 1, This information for the period from October 31, 2013 to December 31, 2014 is restated under IFRS from Canadian GAAP. (6) Resuits for the six-month period ended June 30, Ratios and Supplemental Data: June December December December December As at Net assets value (in 000 s) 17,904 22,186 31,854 55,906 48,370 Number of units outstanding (in 000s) 1,786 2,492 3,526 5,380 5,380 Base management expense ratio (1) (2) 1.96% 1.93% 1.77% 1.85% 2.19% Issue expense ratio (1) (2) 0.00% 0.00% 0.00% 0.00% 7.41% Performance fee ratio 0.00% 0.00% 0.21% 0.99% 0.00% Interest expense ratio (1) (2) 0.67% 0.55% 0.35% 0.31% 0.16% Management expense ratio (annualized) (2) 2.63% 2.48% 2.33% 3.15% 9.76% Management expense ratio before waivers or absorptions (annualized) (2) 2.63% 2.48% 2.33% 3.15% 9.76% Portfolio turnover rate (3) 18.33% 90.14% 72.75% 86.14% 1.29% Trading expense ratio (4) 0.23% 0.38% 0.31% 0.36% 1.64% Closing market price (TSX) units $9.75 $8.58 $8.40 $ $9.40 (1) A separate base management expense ratio has been presented to include the normal operating expenses and exclude performance fee and the Issue expenses representing all agents fees and unit issue expenses. (2) MER is based on the requirements of NI and includes the total expenses (excluding commissions and other portfolio transaction cost) of the Fund for the stated period, including interest expense and issuance costs, if applicable, and is expressed as an annualized percentage of daily average net asset value during the period. (3) The Fund s turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund s buying and selling all of the securities in its portfolio once in the course of the year. There is not necessarily a relationship between turnover rate and the performance of the Fund. (4) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset values during the year. 6

7 SUMMARY OF INVESTMENT PORTFOLIO The summary of investment portfolio may change due to ongoing portfolio transactions of the Fund. A quarterly update is available at As at June 30, 2017 % of NAV Portfolio by Category United States 44.1% Canada 15.8% Spain 12.8% Italy 12.6% Australia 10.8% Mexico 4.8% Great Britain 4.5% Hong Kong 3.9% France 3.7% Switzerland 3.0% China 2.6% Bermuda 2.1% Singapore 2.1% Germany 2.0% Brazil 1.9% Cayman Islands 1.2% Japan 1.0% Netherlands 1.0% Cash 3.9% Net Other Assets (Liabilities) (33.8%) Total 100.0% Top 25 Holdings Enbridge Inc. 7.7% Sempra Energy 6.5% Abertis Infraestructuras SA 6.3% Cheniere Energy Inc. 6.3% TransCanada Corp. 6.0% NextEra Energy Inc. 5.7% Kinder Morgan Inc. 5.5% Transurban Group 5.0% Iberdrola SA 4.3% Enav SpA 4.1% Cash 3.9% Sydney Airport 3.7% Groupe Eurotunnel SA 3.7% PG&E Corp. 3.5% Crown Castle International Corp. 3.3% National Grid PLC 3.3% Flughafen Zuerich AG 3.0% Williams Cos Inc. 2.8% Infraestructura Energetica Nova SAB de CV 2.8% Atlantia SpA 2.6% Enel SpA 2.6% China Merchants Port Holdings Company Ltd. 2.5% Aena SA 2.2% COSCO SHIPPING Ports Ltd. 2.1% Hutchison Port Holdings Trust 2.1% Total Net Asset Value (NAV): $ 17,904,157 7

8 Macquarie Global Infrastructure Income Fund Financial Statements (Unaudited) June 30, 2017 Notice to Reader: These semi-annual financial statements and related notes for the six-month period ended June 30, 2017 have been prepared by Management of LOGiQ Asset Management Ltd. The auditors of the Fund have not audited or reviewed these semi-annual financial statements. 8

9 MACQUARIE GLOBAL INFRASTRUCTURE INCOME FUND - SEMI-ANNUAL FINANCIAL STATEMENTS 2017 STATEMENTS OF FINANCIAL POSITION (unaudited) As at June 30, 2017 December 31, 2016 Assets Current assets Financial assets at fair value through profit or loss $ 23,250,790 $ 30,061,141 Cash 701, ,106 Dividends receivable 178, ,204 Amounts receivable for investments sold 179,974 - Total assets 24,311,405 31,079,451 Liabilities Current liabilities Leverage (note 14) 6,103,896 8,448,664 Management fees payable (note 11) 3,235 10,303 Interest payable 11,335 12,032 Other accounts payable and accrued expenses 20,896 48,298 Distributions payable to unitholders 267, ,861 Total liabilities 6,407,248 8,893,158 Net assets attributable to holders of redeemable units $ 17,904,157 $ 22,186,293 Redeemable units outstanding (note 5) 1,785,907 2,492,407 Net assets attributable to holders of redeemable units per class per unit $ $ 8.90 Approved on behalf of the Manager, LOGiQ Asset Management Ltd. Mary Anne Palangio Director & President Kal Zakarneh Director & Chief Financial Officer The accompanying notes are an integral part of these financial statements. 9

10 MACQUARIE GLOBAL INFRASTRUCTURE INCOME FUND - SEMI-ANNUAL FINANCIAL STATEMENTS 2017 STATEMENT OF COMPREHENSIVE INCOME (unaudited) For the six-month periods ended June Income Net Gains (Losses) on investments and derivatives at FVTPL: Interest income for distribution purposes $ 6 $ 47 Dividend income 661,314 1,163,084 Other income Realized gain (loss) on sales of investments 1,872, ,383 Change in unrealized appreciation (depreciation) in the value of investments 1,461, ,328 Net Gains (Losses) on investments and derivatives at FVTPL 3,996,350 1,743,277 Other income comprised of: Realized foreign exchange gain (loss) on currency (12,480) (107,795) Change in unrealized foreign exchange appreciation (depreciation) on currency - (593) Change in unrealized foreign exchange appreciation (depreciation) on leverage 184, ,731 Total other income 172, ,343 Total income (loss) 4,168,766 2,335,620 Expenses Management fees (note 11) 145, ,986 Interest expense (note 14) 76,110 77,578 Custodial and other unitholders' fees 23,573 26,346 Harmonized sales tax 18,662 31,551 Audit fees 12,399 12,467 Administration fees 826 4,565 Filing fees 5,951 5,984 TSX listing fees Printing and mailing fees 4,959 4,987 Transfer agent fees 4,400 4,675 Other fees 3,887 2,755 Legal fees 1,488 1,567 IRC fees (note 12) 1, Transaction costs (note 13) 26,555 63,271 Withholding taxes 45, ,996 Total expenses 371, ,418 Increase (decrease) in net assets attributable to holders of redeemable units $ 3,796,937 $ 1,782,202 Weighted average number of units outstanding 2,375,308 3,356,026 Increase (decrease) in net assets attributable to holders of redeemable units per class per unit (*) $ 1.60 $ 0.53 (*) Based on weighted average number of units outstanding for the period The accompanying notes are an integral part of these financial statements. 10

11 MACQUARIE GLOBAL INFRASTRUCTURE INCOME FUND - SEMI-ANNUAL FINANCIAL STATEMENTS 2017 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS (unaudited) For the six-month periods ended June Net increase (decrease) in net assets attributable to holders of redeemable units $ 3,796,937 $ 1,782,202 Distributions to holders of redeemable units: (note 8) Dividends (51,340) (124,591) Net investment income - (264,109) Return of Capital (131,387) - Net realized gains (459,020) (514,133) (641,747) (902,833) Redeemable unitholders' transactions (note 5): Proceeds from redeemable units issued - - Redemption of redeemable shares (7,437,326) (9,546,026) (7,437,326) (9,546,026) Change in net assets attributable to holders of redeemable units during the period (4,282,136) (8,666,657) Net assets attributable to holders of redeemable units, beginning of period 22,186,293 31,853,552 Net assets attributable to holders of redeemable units, end of period $ 17,904,157 $ 23,186,895 The accompanying notes are an integral part of these financial statements. 11

12 MACQUARIE GLOBAL INFRASTRUCTURE INCOME FUND - SEMI-ANNUAL FINANCIAL STATEMENTS 2017 STATEMENTS OF CASH FLOWS (unaudited) For the six-month periods ended June Cash flows from operating activities Increase (decrease) in net assets attributed to holders of redeemable units $ 3,796,937 $ 1,782,202 Adjustments to reconcile to operating cash flows: Realized (gain) loss on sales of investments (1,872,795) (154,383) Change in unrealized (appreciation) depreciation on investments (1,461,333) (425,328) Change in unrealized (appreciation) depreciation in the value of foreign currency forward contracts - - Change in unrealized foreign exchange (appreciation) depreciation on leverage (184,896) (700,731) Proceeds from investments sold 14,217,602 25,654,764 Purchase of investments (4,253,097) (10,590,003) (Increase) decrease in dividends receivable (5,676) 27,004 (Increase) decrease in other amounts receivable and prepaid expenses - (3,975) Increase (decrease) in other accounts payable and accrued expenses (27,402) (24,852) Increase (decrease) in management fees payable (7,068) (17,527) Increase (decrease) in interest payable (697) (4,560) Net cash flow provided by (used in) operating activities 10,201,575 15,542,611 Cash flows provided by (used in) financing activities Distributions paid to unitholders (747,722) (1,057,944) Payments on redemption/cancellation of redeemable units (7,437,326) (9,546,026) Repayment of leverage (note 14) (2,159,872) (5,008,462) Net cash flow provided by (used in) financing activities (10,344,920) (15,612,432) Increase (decrease) in cash during the period (143,345) (69,821) Cash at beginning of period 845,106 1,447,747 Cash at end of period $ 701,761 $ 1,377,926 Supplementary Information Dividends received net of withholding tax $ 610,283 $ 1,048,092 Interest received $ 6 $ 47 Interest paid $ 76,807 $ 82,138 The accompanying notes are an integral part of these financial statements. 12

13 MACQUARIE GLOBAL INFRASTRUCTURE INCOME FUND - SEMI-ANNUAL FINANCIAL STATEMENTS 2017 SCHEDULE OF INVESTMENT PORTFOLIO (unaudited) As at June 30, 2017 Average Cost ($) Fair Value ($) % of NAV No. of Shares Financial assets at FVTPL Australia 76,585 Transurban Group 704, , % 94,800 Sydney Airport 607, , % 39,620 APA Group 319, , % 1,632,542 1,935, % Bermuda 248,668 COSCO SHIPPING Ports Ltd. 318, , % 318, , % Brazil 48,200 Cia de Saneamento do Parana 258, , % 30,816 Prumo Logistica SA 77, , % 336, , % Canada 26,683 Enbridge Inc. 1,366,936 1,378, % 17,414 TransCanada Corp. 837,673 1,076, % 20,502 Veresen Inc. 179, , % 2,384,490 2,830, % Cayman Islands 27,000 ENN Energy Holdings Ltd. 181, , % 181, , % China 790,000 Huadian Fuxin Energy Corp Ltd. 359, , % 236,000 China Longyuan Power Group Corp Ltd. 246, , % 606, , % France 48,078 Groupe Eurotunnel SA 831, , % 831, , % Germany 6,983 Innogy SE 372, , % 372, , % Great Britain 36,351 National Grid PLC 626, , % 15,537 Pennon Group PLC 229, , % 855, , % Hong Kong 125,992 China Merchants Port Holdings Co Ltd. 464, , % 17,500 CLP Holdings Ltd. 238, , % 702, , % The accompanying notes are an integral part of these financial statements. 13

14 MACQUARIE GLOBAL INFRASTRUCTURE INCOME FUND - SEMI-ANNUAL FINANCIAL STATEMENTS 2017 SCHEDULE OF INVESTMENT PORTFOLIO (Continued ) (unaudited) As at June 30, 2017 Average Cost ($) Fair Value ($) % of NAV Italy 131,144 Enav SpA 647, , % 12,935 Atlantia SpA 422, , % 67,830 Enel SpA 326, , % 50,396 Terna Rete Elettrica Nazionale SpA 298, , % 41,356 Snam SpA 250, , % 1,945,018 2,262, % Japan 1,400 East Japan Railway Co. 159, , % 159, , % Mexico 71,700 Infraestructura Energetica Nova SAB de CV 435, , % 193,500 OHL Mexico SAB de CV 437, , % Netherlands 873, , % 2,859 Koninklijke Vopak NV 182, , % Singapore 182, , % 677,100 Hutchison Port Holdings Trust 516, , % Spain 516, , % 47,282 Abertis Infraestructuras SA 949,220 1,135, % 74,843 Iberdrola SA 626, , % 1,517 Aena SA 268, , % Switzerland 1,843,888 2,288, % 1,690 Flughafen Zuerich AG 388, , % United States of America 388, , % 7,900 Sempra Energy 1,046,921 1,156, % 17,700 Cheniere Energy Inc. 969,429 1,119, % 5,600 NextEra Energy Inc. 915,244 1,019, % 39,400 Kinder Morgan Inc. 938, , % 7,200 PG&E Corp. 598, , % 4,500 Crown Castle International Corp. 547, , % 12,900 Williams Cos Inc. 427, , % 18,631 Enbridge Energy Management LLC 465, , % 2,100 American Tower Corp. 295, , % 3,100 Southwest Gas Holdings Inc. 323, , % 2,600 Dominion Energy Inc. 266, , % The accompanying notes are an integral part of these financial statements. 14

15 MACQUARIE GLOBAL INFRASTRUCTURE INCOME FUND - SEMI-ANNUAL FINANCIAL STATEMENTS 2017 SCHEDULE OF INVESTMENT PORTFOLIO (Continued ) (unaudited) As at June 30, 2017 Average Cost ($) Fair Value ($) % of NAV United States of America (Continued ) 7,300 NiSource Inc. 210, , % 2,100 Edison International 215, , % 1,900 American Electric Power Co Inc. 175, , % 7,397,021 7,901, % Total equities 21,526,799 23,250, % Transaction costs (note 13) (31,869) Total financial assets at FVTPL $ 21,494,930 $ 23,250, % Leverage (6,103,896) (34.1%) Cash 701, % Net other assets (liabilities) 55, % Net assets attributable to holders of redeemable units $ 17,904, % The accompanying notes are an integral part of these financial statements. 15

16 NOTES TO THE FINANCIAL STATEMENTS (JUNE 30, 2017) 1. GENERAL INFORMATION Macquarie Global Infrastructure Income Fund (the Fund ) is a closed-end investment trust established under the laws of the Province of Ontario pursuant to a trust agreement dated as of September 27, 2013 (the Trust Agreement ) between LOGiQ Asset Management Ltd. (the Manager ) in its capacity as manager and RBC Investor & Treasury Services (the Trustee ) as trustee of the Fund. The Fund commenced operations on October 22, The fiscal year-end of the Fund is December 31. The Units of the Fund are listed on the Toronto Stock Exchange (the TSX ) under the symbol MQI.UN. The address of the Fund s registered office is 77 King Street West, Suite 2110, Toronto, Ontario M5K 1G8. On November 30, 2016, Aston Hill Capital Markets Inc. was amalgamated into Aston Hill Asset Management Inc. On December 8, 2016, Aston Hill Asset Management Inc., as part of Aston Hill Financial Inc. ("Aston Hill") and together with Front Street Capital 2004 ("Front Street") and Tuscarora Capital Inc. ("TCI"), an entity under common control with Front Street, completed a previously announced transaction whereby Aston Hill would acquire all of the equity interests in the Front Street and TCI, and the companies would combine their respective operations. As part of the transaction, Aston Hill also changed its name to LOGiQ Asset Management Inc. and consequently Aston Hill Asset Management Inc. changed its name to LOGiQ Asset Management Ltd. The Fund s investment objectives, as set out in the Prospectus dated September 27, 2013, are to generate: i. quarterly distributions for holders of Units (the Unitholders ) initially targeted to be $0.15 per Unit ($0.60 per annum representing an annual cash distribution of 6.0% based on the $10.00 per Unit issue price); and ii. maximize total return for Unitholders, consisting of distributions and capital appreciation; and iii. preserve capital. To achieve the Fund s investment objectives, Macquarie Capital Investment Management LLC (the Investment Manager ) invested the net proceeds of the Offering in a portfolio (the Portfolio ) consisting of infrastructure equity securities issued by entities domiciled in global markets. These financial statements were authorized for issue by LOGiQ Asset Management Ltd. (the Manager) on August 29, BASIS OF PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS These financial statements have been prepared in compliance with International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB). The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Manager to exercise its judgment in the process of applying the Fund s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note SIGNIFICANT ACCOUNTING POLICIES a) Financial instruments The Fund s long position investments in equity securities are designated at fair value through profit or loss ( FVTPL ) at inception. The Fund s derivatives are categorized as held-for-trading. As a result of such designation and categorization, the Fund s investments and derivatives are measured at FVTPL. The Fund s obligation for net assets attributable to holders of redeemable units is presented at approximately the redemption amount. All other financial assets and liabilities are measured at amortized cost. Under this method, financial assets and liabilities reflect the amounts required to be received or paid, discounted when appropriate, at the financial instrument s effective interest rate. The Fund s accounting policies for measuring the fair value of their investments and derivatives are identical to those used in measuring their published Net Asset Value. The fair values of the Fund s financial assets and liabilities that are not carried at FVTPL approximate their carrying amounts due to their short-term nature. b) Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of financial assets and liabilities traded in active markets (such as publicly traded marketable securities) are based on quoted market prices at the close of trading on the reporting date. The Fund uses the last traded market price for both financial assets and financial liabilities where the last traded price falls within that day s bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, the Manager determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances. The Fund s policy is to recognize transfers into and out of the fair value hierarchy levels at the beginning of the period in which circumstances giving rise of the transfer occur. 16

17 The fair value of financial assets and liabilities that are not traded in an active market including foreign currency forward contracts are determined using valuation techniques. The Fund uses a variety of methods and makes assumptions that are based on market conditions existing at each measurement date. Valuation techniques include the use of comparable recent arm s length transactions, reference to other instruments that are substantially the same and others commonly used by market participants and which make the maximum use of observable inputs. Refer to note 17 for further information about the Fund s fair value measurements. The Fund s net asset value per unit did not differ from its net assets attributable to holders of redeemable units per unit as at June 30, 2017 and December 31, c) Cash Cash consists of cash in hand and deposits held with bank. d) Investment Transactions and Income Recognition Regular purchases and sales are recognised on the trade date - the date on which the Fund commits to purchase or sell the investment. Any realized and unrealized gains or losses are recognized using the average cost of the investments, which excludes broker commissions. The interest income for distribution purposes and interest expense shown on the Statements of Comprehensive Income represents the coupon interest received by the fund accounted for on an accrual basis. The Fund does not amortize premiums paid or discounts received on the purchase of fixed income securities except for zero coupon bonds which are amortized. Dividend income and dividend expenses are recognized on the ex-dividend date. e) Increase (decrease) Net Assets Attributable to Holders of Redeemable Units per Unit The increase (decrease) in Net Assets attributable to holders of redeemable units per unit in the Statements of Comprehensive Income is calculated by dividing the increase (decrease) in Net Assets attributable to holders of redeemable units per series by the weighted average number of redeemable units outstanding for each relevant series during the year. f) Unit Valuation The Net Assets attributable to holders of redeemable units per unit is determined by dividing the aggregate market value of net assets of the Fund by the total number of units of the Fund outstanding before giving effect to redemptions of units for that day. g) Income Taxes The Fund qualifies as a mutual Fund trust under the provisions of the Income Tax Act (Canada) and accordingly, is subject to tax on its investment income, including net realized capital gains, for any calendar year in which its net investment income or sufficient net realized capital gains are not paid or payable to its unitholders as at the end of the calendar year. It is the intention of the Manager that all annual net investment income and sufficient net taxable capital gains will be distributed to unitholders on a calendar year basis such that Canadian income taxes payable by the Fund under present legislation will be minimized. As a result thereof, and of the deduction of expenses in computing its taxable income, no provisions for income taxes are made in the financial statements. h) Transaction Costs Transaction costs, such as brokerage commissions, incurred in the purchase and sale of securities are expensed and are recognized in the Statements of Comprehensive Income. i) Foreign currency translation The majority of the Fund s subscriptions and redemptions are denominated in Canadian dollars, which is also its functional and presentation currency. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates that transactions occur. Foreign currency assets and liabilities denominated in a foreign currency are translated into the functional currency using the prevailing exchange rate at the measurement date. Foreign exchange gains and losses relating to cash and those relating to other financial assets and liabilities are presented as Realized foreign exchange gain (loss) on currency in the Statements of Comprehensive Income. The fair values of investments and other assets and liabilities that are denominated in foreign currencies are translated into Canadian dollars at the noon rate of exchange on each valuation date. Purchases and sales of investments and income derived from investments are translated at the prevailing rate of exchange on the date of such transactions. j) Foreign currency forward contracts The Fund may enter into foreign currency forward contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. The fair value of such contracts will fluctuate with changes in currency exchange rates. The contracts are marked-tomarket and the change in fair value is recorded as an unrealized gain or loss. When a contract is closed, the Fund records a realized gain or 17

18 loss in the Statements of Comprehensive Income as realized gain (loss) on foreign currency forward contracts equal to the difference between the value of the contract on the date it was opened and the value on the date it was closed. k) Related party transactions Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. The Manager provides investment management services to the Fund, including the provision of key management personnel. l) Classification of Redeemable Units Issued by the Fund Under IFRS, IAS 32 requires that shares of an entity which include a contractual obligation for the issuer to repurchase or redeem them for cash or another financial asset be classified as a financial liability. The unitholders have the right to receive cash distributions and therefore the Fund s units do not meet the criteria in IAS 32 for classification as equity. They have been classified as financial liabilities on the Statements of Financial Position. m) Accounting Standards Issued But Not Yet Adopted The final version of International Financial Reporting Standard (IFRS) 9, Financial Instruments, was issued by IASB in July 2014 and will replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 introduces a model for classification and measurement, a single, forward-looking expected loss impairment model and a substantially reformed approach to hedge accounting. The new single, principle based approach for determining the classification of financial assets is driven by cash flow characteristics and the business model in which an asset is held. The new model also results in a single impairment model being applied to all financial instruments, which will require more timely recognition of expected credit losses. It also includes changes in respect of own credit risk in measuring liabilities elected to be measured at fair value, so that gains caused by the deterioration of an entity s own credit risk on such liabilities are no longer recognized in profit or loss. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, however is available for early adoption. In addition, the own credit changes can be early applied in isolation without otherwise changing the accounting for financial instruments. The Fund is in the process of assessing the impact of IFRS CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of financial statements requires management to use judgment in applying its accounting policies and to make estimates and assumptions about the future. The following discusses the most significant accounting judgments and estimates that the Fund has made in preparing the financial statements: Functional and Presentation Currency The Fund s investors are primarily Canadian residents, with capital activities of the redeemable shares denominated in Canadian dollars. The primary activity of the Fund is to invest in Canadian, global securities and derivatives and to offer Canadian investors a higher return compared to other products available in Canada. The performance of the Fund is measured and reported to the investors in Canadian dollars and the expenses are primarily in Canadian dollars. The Manager considers the Canadian dollar as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in Canadian dollars, which is the Fund s functional and presentation currency. Fair Value Measurement of Derivatives and Securities Not Quoted in an Active Market When the Fund holds financial instruments that are not quoted in active markets, fair values of such instruments are determined using valuation techniques and may be determined using reputable pricing sources (such as pricing agencies) or indicative prices from market makers. Broker quotes as obtained from the pricing sources may be indicative and not executable or binding. Classification and Measurement of Investments and Application of the Fair Value Option In classifying and measuring financial instruments held by the Fund, the Manager is required to make judgments about the classification of financial instruments and the applicability of the fair value option to its investments which are not held for trading. The Manager has determined that the Fund s derivatives are held for trading due to their short term nature. The fair value option has been applied to the Fund s investments in equity securities as the investments are managed on a fair value basis in accordance with the Fund s investment strategy. 5. REDEEMABLE UNITS The beneficial interest in the net assets and net income of the Fund is divided into Redeemable Units. The Fund is authorized to issue transferable, Redeemable Units. On October 22, 2013, the Fund completed its initial public offering pursuant to the Prospectus dated September 27, $50,000,000 was raised through the issue of 5,000,000 Units at $10.00 per Unit. Agents fees and issue expenses were $3,375,000 or $0.68 per Unit. 18

19 On October 31, 2013, the Agents exercised an over-allotment option in respect of 380,000 Units, raising a further $3,800,000. Agents fees were $199,500 or $0.53 per Unit. The Units may be redeemed on an Annual Redemption Date which is the last Business Day of May for each year commencing in May The Units may be surrendered for redemption during the period from May 1st to 5:00 p.m. (Toronto time) on the 10 th business day prior to the last business day in May, subject to the Fund s right to suspend redemptions in certain circumstances, for a redemption price equal to the NAV per Unit on that date less any costs of funding the redemption. Unitholders will receive the redemption payment on or before the 15 th day following the redemption date (the Redemption Payment Date ). Any unpaid distributions payable on or before the redemption date in respect of Units tendered for redemption on such redemption date will also be paid on the same day as the redemption proceeds are paid. In addition to the annual redemption right, the Units may also be redeemed on a monthly redemption date, subject to certain conditions and in order to effect such a redemption, the Units must be surrendered by no later than 5:00 p.m. (Toronto time) on the date which is the last business day of the month preceding the monthly redemption date. Payment of the redemption price will be made on or before the Redemption Payment Date, subject to the Manager s right to suspend redemptions in certain circumstances. Concurrently with the payment of the redemption price, the Fund may pay to the redeeming Unitholder a cash distribution in the amount of the net realized capital gains of the Fund incurred by it to Fund the payment of the redemption price. Unitholders surrendering a Unit for redemption will receive a monthly redemption price equal to the lesser of: (a) 95% of the Market Price (as defined below) of a Unit; and (b) 100% of the Closing Market Price (as defined below) of a Unit on the applicable monthly redemption date less, in each case, any costs associated with the redemption, including brokerage costs and less any net realized capital gains of the Fund that are distributed to a Unitholder concurrently with the proceeds of disposition on redemption, being the monthly redemption amount. The Market Price is the weighted average trading price of the Units on the TSX (or such other stock exchange on which the security is listed) for the 10 trading days immediately preceding the monthly redemption date. The Closing Market Price in respect of a security on a monthly redemption date is the closing price of such security on the TSX on such monthly redemption date (or such other stock exchange on which such security is listed) or, if there was no trade on the relevant monthly redemption date, the average of the last bid and the last asking prices of the security on the TSX on such monthly redemption date (or such other stock exchange on which the security is listed). During the six-month period ended June 30, 2017, 706,500 units were redeemed for the total value of $7,437,326 (1,034,070 units were redeemed for the total value of $9,546,026 during the six-month period ended June 30, 2016). During the six-month periods ended June 30, 2017 and June 30, 2016, the number of redeemable units issued, redeemed and outstanding was as follows: June 30, 2017 June 30, 2016 Units outstanding, beginning of period 2,492,407 3,526,477 Redeemable units issued (706,500) (1,034,070) Balance at the end of period 1,785,907 2,492, CAPITAL MANAGEMENT The capital of the Fund is represented by the net assets attributable to holders of redeemable units. The Fund s objectives when managing capital is to safeguard the Fund s ability to continue as a going concern, to provide financial capacity and flexibility to meet its strategic objectives, and to provide an adequate return to unitholders commensurate with the level of risk while maximizing the distributions to unitholders. The Fund does not have any externally imposed capital requirements, and the Manager believes that the current level of distributions, capital and capital structure is sufficient to sustain ongoing operations. The Manager actively monitors the cash position and financial performance of the Fund to ensure there are sufficient resources to meet distributions and redemptions. 7. MARKET PURCHASE PROGRAM The Trust Agreement provides that the Fund has the right (but not the obligation), exercisable in its sole discretion, at any time, to purchase Units for cancellation at prices not exceeding the NAV per Unit, subject to any applicable regulatory requirements and limitations. It is expected that such purchases, if made, will be made as normal course issuer bids through the facilities and under the rules of the exchange or market on which the Units are listed, if applicable, as provided for in the Trust Agreement or as otherwise permitted by applicable securities laws. The Fund did not purchase any Units for cancellation during the six-month periods ended June 30, 2017 and June 30, DISTRIBUTIONS The Fund pays quarterly distributions initially at $0.15 per Unit, representing a return of 6.0% per annum on the Unit issue price. 19

20 The Fund has made all its scheduled distributions during the six-month period ended June 30, 2017, paying $0.30 per Unit ($0.30 per Unit during the six-month period ended June 30, 2016). 9. CUSTODIAN Pursuant to the Trust Agreement, RBC Investor & Treasury Services (the Custodian ) also acts as custodian of the assets of the Fund. In consideration for these services, the Fund pays a fee to the Custodian. The Custodian is rated AA- by Standard & Poor s ( S&P ) as of June 30, 2017 and December 31, FUND ADMINISTRATION RBC Investor & Treasury Services is responsible for certain aspects of the Fund s day-to-day operations, including calculating net assets attributable to holders of redeemable units, net income and net realized capital gains of the Fund and maintaining the books and records of the Fund. 11. RELATED PARTY TRANSACTIONS Management Fees As compensation for coordinating the organization of and managing the ongoing business and administrative affairs of the Fund, the Manager is entitled to an annual management fee in an amount equal to 1.25% per annum of the NAV of the Fund to be calculated and payable monthly in arrears, plus applicable taxes. The total management fees charged to the Fund during the six-month period ended June 30, 2017 were $145,680 plus applicable taxes ($173,986 plus applicable taxes during the six-month period ended June 30, 2016). The Manager pays the Investment Manager out of the above management fees. Performance fees The Performance fee is calculated and accrued monthly and paid annually. The Performance Fee for a given year is equal to 20% of the amount by which the sum of (i) the NAV per Unit (calculated without taking into account the Performance Fee) at the end of such year; plus (ii) distributions paid on such Units during such year, exceeds 106% of the Threshold Amount (the Hurdle Rate ), plus applicable taxes. The Threshold Amount will be the greater of: (i) $10.00; and (ii) the NAV per Unit on the Determination Date in the last fiscal year of the Fund in which a Performance Fee was paid (after payment of such Performance Fee). For the six-month period ended June 30, 2017, the Fund did not pay any performance fees ($Nil during the six-month period ended June 30, 2016). Administration Fees The Manager allocates back to the Fund a portion of the administration costs relating to the operations of the Fund. The expenses are directly attributable to the Fund as they relate to time spent on Fund accounting, valuation, taxation, compliance, investor relations, financial reporting and unitholder reporting cost management and oversight and any other operations matter. For the six-month period ended June 30, 2017, administration fees amounted to $826 ($4,565 during the six-month period ended June 30, 2016) 12. INDEPENDENT REVIEW COMMITTEE ( IRC ) FEES The members of the Independent Review Committee are John Crow (chair), Joseph Wright, Robert B. Falconer and Scott Browning. The Independent Review Committee acts as a review committee for a number of investment funds managed by the Manager. The IRC has four members, each receive $15,000 per annum ($20,000 for the Chairman) plus $1,250 per meeting for acting in such capacity and are also reimbursed for expenses in connection with performing their duties. These fees and expense reimbursements are allocated across investment funds that are managed by the Manager in a manner that is fair and reasonable. For the six-month period ended June 30, 2017, the Fund paid IRC fees of $1,041 ($742 during the six-month period ended June 30, 2016). 13. INVESTMENT TRANSACTIONS AND SOFT DOLLAR SERVICES There was $26,555 of broker commission paid during the six-month period ended June 30, 2017 in connection with portfolio transactions (There was $63,271 of broker commission paid during the six-month period ended June 30, 2016). The Investment Manager maintains commission sharing arrangements with various executing brokers in which a portion of total commissions paid by the Fund is allocated to a pool of credits maintained by a broker. These credits may be used to pay for a portion of the Investment Manager s permitted investment research services. No soft dollar services were included in the broker commission charges. These amounts are accounted for as transactional costs. 20

21 14. LEVERAGE Pursuant to an agreement with a Canadian chartered bank, the Fund maintains a 364-day revolving credit facility. The Fund entered into a Margin Loan Agreement (the Credit Agreement ) dated November 14, 2013 between the Manager (on behalf of the Fund) and the Bank of Nova Scotia (the Lender ) to use for various purposes but primarily to purchase additional securities for the Portfolio. Borrowings by the Fund thereunder may be in Canadian or U.S. dollars and shall not exceed 50% of the NAV of the Fund at the time of borrowing. The maximum amount of leverage that the Fund would employ is 1.50:1. There is no fixed termination date for this agreement and the interest rate for the leverage is variable. The Fund is entitled to employ leverage of up to 50% of the net assets of the Fund at the time of borrowing. During the six-month period ended June 30, 2017, the Fund applied leverage in the range from 32.27% to 39.19% of the NAV or U.S. $4,700,000 to U.S. $6,300,000. The Canadian dollar equivalent fluctuated between approximately $6.1 and $8.7 million. (from 33.03% to 49.03% or U.S. $6.3 to $10.0 million during the six-month period ended June 30, The Canadian equivalent was between approximately $8.0 and $14.0 million). The amount of U.S. $4,700,000 or the Canadian dollar equivalent of $6,103,896 was outstanding as of June 30, 2017 and the leverage factor was 34.09% (As of December 31, 2016, the amount of U.S. $6,300,000 or the Canadian dollar equivalent of $8,448,664 was outstanding and the leverage factor was 38.08%). During the six-month period ended June 30, 2017, the related interest expense was $76,110. (During the sixmonth period end June 30, 2016, the related interest expense was $77,578). 15. INCOME TAXES As at December 31, 2016, the Fund did not have any net taxable capital losses ( $40,535), which may be carried forward indefinitely to reduce future realized capital gains. The Fund did not have any taxable non-capital losses as at December 31, 2016 (December 31, $nil). 16. FINANCIAL INSTRUMENT RISK The Fund is exposed to a variety of financial instruments risks: credit risk, liquidity risk, portfolio concentration risk and market risk (including interest rate risk, currency risk and price risk). The level of risk to which each Fund is exposed depends on the investment objectives and the type of investments the Fund holds. The value of investments within a portfolio can fluctuate daily as a result of changes in prevailing interest rates, economic and market conditions and company-specific news related to investments held by the Fund. The Manager of the Fund may attempt to minimize the potential adverse effects of these risks on the Fund s performance by, but not limited to, regular monitoring of the Fund s positions and market events and diversification of the investments portfolio by asset type, country, sector, and term to maturity within the constraints of the stated objectives, and through the usage of derivatives to hedge certain risk exposures. The Manager of the Fund monitors the below risks on a regular basis. Concentration Risk Concentration risk is the risk associated with exposure to any one or more particular country, asset class and industry type security. Manager reduces the portfolio concentration risk for the Funds due to diversification by asset class and security of the Fund. 21

22 The following comparative summary represents the securities by asset type held by the Fund as at June 30, 2017 and December 31, 2016: Geographic Allocation June 30, 2017 December 31, 2016 % of NAV % of NAV United States 44.1% 48.8% Canada 15.8% 14.4% Spain 12.8% 11.6% Italy 12.6% 10.5% Australia 10.8% 12.0% Mexico 4.8% 3.3% Great Britain 4.5% 6.9% Hong Kong 3.9% 3.8% France 3.7% 6.2% Switzerland 3.0% 2.9% China 2.6% 2.5% Singapore 2.1% 2.4% Bermuda 2.1% 2.0% Germany 2.0% 2.7% Brazil 1.9% 2.6% Cayman Islands 1.2% 0.6% Japan 1.0% 1.0% Netherlands 1.0% 0.6% Luxembourg - 0.7% Net Other Assets (Liabilities) (29.9%) (35.5%) Total 100.0% 100.0% Market risk a) Price risk Price risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk). The value of each investment is influenced by the outlook of the issuer and by general economic and political conditions, as well as industry and market trends. The Fund s equity instruments are susceptible to price risk arising from uncertainties about future prices of the instruments. All securities excluding short-term debt present a risk of loss of capital. Other assets and liabilities are monetary items that are short-term in nature and therefore are not subject to significant price risk. As of June 30, 2017, if equity prices had increased or decreased by 10% with all other variables held constant, the net assets attributable to holders of redeemable units of the Fund would have increased or decreased by approximately $2,325,000 (December 31, $3,006,000). In practice, actual results may differ from this sensitivity analysis and the difference could be material. b) Interest rate risk Interest rate risk is the risk that interest-bearing credit facility and the fair value of investments will fluctuate due to changes in prevailing levels of market interest rates. As a result, the value of the Fund that invests in debt securities and short-term notes and will be affected by changes in applicable interest rates. If interest rates fall, the fair value of existing debt securities may increase due to the increase in yield. Alternatively, if interest rates rise, the yield of existing debt securities may decrease which could lead to a decrease in their fair value. The magnitude of the decline will generally be greater for long-term debt securities than for short-term debt securities. Other assets and liabilities are short-term in nature and non-interest bearing. As at June 30, 2017 and December 31, 2016, interest rate risk was negligible as the Fund had no exposure to investment and interest-bearing credit facility. c) Currency risk Currency risk arises from financial instruments that are denominated in a currency other than the Canadian dollar, which is the functional currency of the Fund. As a result, the Fund may be exposed to the risk that the value of securities denominated in other currencies will fluctuate due to changes in exchange rates. The following tables indicate the foreign currencies to which the Fund had significant exposure as at June 30, 2017 and December 31, 2016 in Canadian dollar ( CAD ) terms. The tables also illustrate the approximate potential impact on Net Assets attributable to holders of 22

23 redeemable units if the CAD had weakened by 5% in relation to each of the other currencies, with other variables held constant If the CAD were to strengthen relative to these currencies, the opposite would occur. In practice, actual results may differ from this sensitivity analysis and the difference could be material. As at June 30, 2017: Non - Monetary instruments Exposure Impact on net assets attributable to holders of redeemable units Monetary Non-Monetary Monetary Currency instruments Total Instruments Instruments Total Australian Dollar $ 1,935,528 $ 32,215 $ 1,967,743 $ 96,776 $ 1,611 $ 98,387 Brazilian Real 332, ,926 16, ,646 Swiss Franc 539, ,506 26,975-26,975 Euro 5,744,139-5,744, , ,207 British Pound 800,025 17, ,870 40, ,893 Hong Kong Dollar 1,753,545 25,140 1,778,685 87,677 1,257 88,934 Japanese Yen 173, ,873 8,694-8,694 Mexican Peso 861, ,230 43,062-43,062 United States Dollar 8,279,196 (6,096,942) 2,182, ,960 (304,847) 109,113 Total $ 20,419,806 $ (6,021,580) $ 14,398,226 $ 1,020,990 $ (301,079) $ 719,911 % of net assets attributable to holder of redeemable units 114.1% (33.6%) 80.4% 5.7% (1.7%) 4.0% As at December 31, 2016: Non - Monetary instruments Exposure Impact on net assets attributable to holders of redeemable units Monetary Non-Monetary Monetary Currency instruments Total Instruments Instruments Total Australian Dollar $ 2,700,368 $ 38,007 $ 2,738,375 $ 135,018 $ 1,900 $ 136,918 Brazilian Real 576, ,253 28,813-28,813 Swiss Franc 633, ,098 31,655-31,655 Euro 6,968,183 78,142 7,046, ,409 3, ,316 British Pound 1,519,243 13,556 1,532,799 75, ,640 Hong Kong Dollar 2,008,902-2,008, , ,445 Japanese Yen 232, ,258 11,613-11,613 Mexican Peso 727, ,845 36,392-36,392 United States Dollar 11,495,460 (8,426,586) 3,068, ,773 (421,329) 153,444 Total $ 26,861,610 $ (8,296,881) $ 18,564,729 $ 1,343,080 $ (414,844) $ 928,236 % of net assets attributable to holder of redeemable units 121.1% (37.4%) 83.7% 6.1% (1.9%) 4.2% *Under monetary instruments, the cash, leverage and foreign currency forward contracts are netted together. Credit risk Credit risk is the risk that a security issuer or counterparty to a financial instrument will fail to meet its financial obligations. The fair value of a debt instrument includes consideration for the credit worthiness of the debt issuer. The credit risk exposure of the Fund s other assets is represented by their carrying amount as disclosed in the Statements of Financial Position. The carrying amount of debt investments and unrealized gain (loss) on derivative instruments outstanding with counterparties represents the maximum exposure to credit risk. Credit ratings for debt securities, preferred securities and derivative instruments are obtained from Standard & Poor s, where available; otherwise, ratings are obtained from Moody s Investors Service, Dominion Bond Rating Services or Canadian Bond Rating Services. Other assets will be settled in the short term. The Manager evaluates the credit quality of the securities prior to purchase and performs ongoing monitoring of the credit quality of the securities. As of the purchase date, the Fund will not invest more than 10% of its total assets in the securities of any one issuer in accordance with investment restrictions. The Fund is exposed to the credit risk of the Custodian, whose S&P credit rating as of June 30, 2017 and December 31, 2016 was AA-. As of June 30, 2017 and December 31, 2016, the Fund didn t hold foreign currency forward contracts. 23

24 Liquidity risk Liquidity risk is the risk that the Fund will encounter difficulty in meeting obligations on time or at a reasonable price with financial liabilities. Unitholder redemption requests are the main liquidity risk for the Fund. The Fund is exposed to liquidity risk through its monthly and annual redemptions. Therefore, the Funds invest the majority of their assets in investments that are traded in an active market and can be readily disposed of. In addition, the Funds retain sufficient cash and cash equivalents to maintain liquidity. All of the Fund s financial liabilities at June 30, 2017 and December 31, 2016 had maturities of less than one year. The tables below analyze the Fund s financial liabilities into relevant maturity groupings based on the remaining period to the contractual maturity date. The amounts in the tables are the contractual undiscounted amounts. As at June 30, 2017: Financial liabilities On demand less than 3 months Total Leverage $ 6,103,896 $ $ 6,103,896 Management fees payable 3,235 3,235 Interest payable 11,335 11,335 Other accounts payable and accrued expenses 20,896 20,896 Distributions payable to unitholders 267, ,886 Total $ 6,103,896 $ 303,352 $ 6,407,248 As at December 31, 2016: Financial liabilities On demand less than 3 months Total Leverage $ 8,448,664 $ $ 8,448,664 Management fees payable 10,303 10,303 Interest payable 12,032 12,032 Other accounts payable and accrued expenses 48,298 48,298 Distributions payable to unitholders 373, ,861 Total $ 8,448,664 $ 444,494 $ 8,893, FAIR VALUE MEASUREMENT The Fund's assets and liabilities recorded at fair value have been categorized within a hierarchy which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The Fund classifies its investments and derivative assets and liabilities into three categories based on the nature of the inputs used to determine their fair value. The categories and the nature of the inputs used in each category are as follows: Level l: Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs, other than quoted prices that are observable for the asset or liability, either directly or indirectly, including inputs in markets that are not considered to be active. Level 3: Inputs that are unobservable. There is little if any market activity. Inputs into the determination of fair value require significant management judgement or estimation. Equities: The Fund s long equity positions are classified as Level 1 as the security held is actively traded and a reliable quote is observable. Some equity positions are classified as Level 2 as they are less actively traded. Foreign currency forward contracts: Foreign currency forward contracts for which inputs, including interest rates, forward market rates and credit spreads are observable and reliable or for which unobservable inputs are determined not to be significant to fair value, are classified as Level 2. A financial instrument s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table illustrates the classification of the Fund s assets and liabilities measured at fair value within the fair value hierarchy as at June 30, 2017 and December 31, 2016: Assets at fair value as at June 30, 2017 Level 1 Level 2 Level 3 Total Equities 23,250,790 23,250,790 Total $ 23,250,790 $ $ $ 23,250,790 24

25 Assets at fair value as at December 31, 2016 Level 1 Level 2 Level 3 Total Equities 30,061,141 30,061,141 Total $ 30,061,141 $ $ $ 30,061,141 There were no transfers among the three levels during the six-month period ended June 30, 2017 and the year ended December 31, WITHHOLDING TAXES The Fund incurs withholding taxes imposed by certain countries on investment income and capital gains. Such income and gains are recorded on a gross basis and the related withholding taxes are shown as a separate line item in the Statements of Comprehensive Income. 19. FINANCIAL INTRUMENTS BY CATEGORY The following table presents the net gains (losses) on financial instruments at FVTPL by category for the six-month periods ended June 30, 2017 and Net gains (losses) Net gains (losses) on financial instruments at FVTPL June 30, 2017 June 30, 2016 Financial Assets and Liabilities at FVTPL: Held for Trading $ - $ - Designated at inception 3,996,350 1,743,277 Total financial assets and liabilities at FVTPL $ 3,996,350 $ 1,743,277 25

26 CORPORATE INFORMATION Independent Review Committee John Crow Chairman C. Scott Browning Robert Falconer Joseph H. Wright Directors and Senior Officers of the Manager Joe Canavan Director and Chief Executive Officer Mary Anne Palangio Director and President Kal Zakarneh Director and Chief Financial Officer Manager LOGiQ Asset Management Ltd. Investment Manager Macquarie Capital Investment Management LLC Transfer Agent and Trustee Computershare Trust Company of Canada Custodian RBC Investor and Treasury Services Auditor PricewaterhouseCoopers LLP Website Mailing Address 77 King Street West Suite2110, PO Box 92 Toronto -Dominion Centre Toronto, ON M5K 1G8 General Website: Inquiries: