Alphabet Soup. Understanding CI s fund classes

Transcription

1 Alphabet Soup Understanding CI s fund classes

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3 CI Investments offers a broad range of investment fund classes to suit how you and your clients achieve their investment goals. You may prefer compensation that is fee-based or based on an embedded fee. Either way, we are committed to helping you build your business. This guide explains CI s fund classes, and describes how to use them to provide benefits such as tax efficiency and other specialized services to enhance the value you provide to your clients. Our fund classes offer opportunities to attract and retain larger accounts by consolidating household assets through incentives such as tiered pricing.

4 Fund classes for fee-based accounts F, EF and O CI s Class F, Class EF and Class O have unbundled compensation and are designed for fee-based accounts. Class O can also be used when your compensation is commission-based. Class EF and Class O are offered in CI Class F For clients with mid-size and larger accounts A series of funds for investors in a dealer-sponsored fee-based program. Management fee and operating expenses are embedded in the daily net asset valuation. Dealer service fee administered and charged by your dealer*. Flexible compensation options no dealer service fee included in the management fee as CI does not pay any commission or trailing commissions to dealers. Up-front commission: 0%. Investment minimum: $500. Clients can opt for these services: Automatic rebalancing: Class F assets can automatically be switched to adhere to a specific allocation defined by the client. Systematic plans (AWDs, PACs, IFEs): similar to Class A processes. Flexible (FT5 and FT8) clients may customize the regular monthly cash distributions they receive by selecting the funds and instructing CI to pay a portion of the monthly cash distributions with any difference being automatically reinvested in that same fund. * Class F can be made available to advisors whose dealer does not have a fee-based platform. CI can administer the dealer service fee, between 0% and 1.50%, if instructed by you and approved by your dealer. Private Investment Management (PIM), our wealth management solution for the high net worth and mass affluent markets. PIM is also available with an embedded fee option, Class E.

5 Class EF (available in PIM) Premium Class F funds with tiered pricing A series of premium Class F funds for investors in dealersponsored fee-based programs with tiered management fees for larger asset bases. Management fee and operating expenses are embedded in the daily net asset valuation. Operating expenses are fixed at 0.15%. Dealer service fee administered by your dealer. Flexible compensation options: - no dealer service fee included in the management fee as CI does not pay any commission or trailing commissions to dealers - tiered management fee rebates are paid out to investors with larger asset bases. Up-front commission: 0%. Investment minimum per mandate: $100,000 (waived if household assets exceed $250,000). Clients can opt for these services: PIM account linking to take advantage of tiered pricing and consolidated reporting. Automatic rebalancing assets within a PIM account can automatically be switched to adhere to a specific allocation defined by the client. Systematic plans (AWDs, PACs, IFEs) similar to Class A processes. Flexible (EFT5 and EFT8) clients may customize the regular monthly cash distributions they receive by selecting the funds and instructing CI to pay a portion of the monthly cash distributions with any difference being automatically reinvested in that same fund. Class O (available in PIM) Tiered pricing, with the fees charged externally For investors with larger asset levels who want the benefits of tiered pricing and fee transparency. Management fee and dealer service fee are charged externally. These fees are calculated separately but rolled up to a single, automatic, quarterly fee redemption transaction from the account which is identified as a Program Fee transaction. Operating expenses are embedded and fixed at 0.15%. Flexible compensation options for dealer service fee: - charged by dealer or CI and can be customized, 0% to 1.25%* - can be adjusted and applied on the household, account or mandate level - collected quarterly from account but paid monthly to enhance your cash flow. Up-front commission: 0%. Investment minimum per mandate: $100,000 (waived if household assets exceed $250,000). Clients can opt for these services: PIM account linking to take advantage of tiered pricing and consolidated reporting. Automatic rebalancing assets within a PIM account can automatically be switched to adhere to a specific allocation defined by the client. Systematic plans (AWDs, PACs, IFEs) similar to Class A processes. Customizing Class O dealer service fee clients may negotiate this fee rate. Fee redirection Class O fees may be redirected to another Class O account. Flexible (OT5 and OT8) clients may customize the regular monthly cash distributions they receive by selecting the funds and instructing CI to pay a portion of the monthly cash distributions with any difference being automatically reinvested in that same fund. * If you plan to use Class O for a fee-based account, please confirm eligibility with your dealer. CI solutions available in fee-based fund classes Class F Class EF (PIM) Class O (PIM) Portfolio Series G5 20 Series Portfolio Series G5 20 Series

6 Funds with embedded compensation CI s Class E and Class A offer embedded-fee compensation. Class E (available in PIM) Tiered pricing the fees are embedded For investors with larger asset levels who want to take advantage of tiered pricing through quarterly management fee rebates. Management fee, operating expenses and trailer fee* are embedded in the daily net asset valuation. Flexible compensation options: - trailer fee can be customized through quarterly rebates - trailer fee rebates can be adjusted on the household, account or mandate level. Available in ISC with negotiable up-front commission of 0% to 5%. Investment minimum per mandate: $100,000 (waived if household assets exceed $250,000). Clients can opt for these services: PIM account linking to take advantage of tiered pricing and consolidated reporting. Automatic rebalancing assets within a PIM account can automatically be switched to adhere to a specific allocation defined by the client. Systematic plans (AWDs, PACs, IFEs) similar to Class A processes. Flexible (ET5 and ET8) clients may customize the regular monthly cash distributions they receive by selecting the funds and instructing CI to pay a portion of the monthly cash distributions with any difference being automatically reinvested in that same fund.

7 Class A The fees are embedded Management fee, operating expenses and trailer fee are embedded in the daily net asset valuation. Up-front compensation options: - ISC: negotiable, 0% to 5% - LL: 2% to 2.5% - DSC: 5%. Trailer fee*: - ISC: 1% for equity, 0.5% for income - LL: 0.5% for equity, 0.25% for income; trailer increases to frontend rate after three years - DSC: 0.5% for equity, 0.25% for income; trailer increases to frontend rate after seven years Investment minimum: $500. Clients can opt for these services: Automatic rebalancing available to all investors in the funds. It can be applied to any account and monitors when the value of investments within the funds deviates from the client s target allocations. Pre-authorized chequing plan allows your clients to make regular investments in one or more of the funds in the amounts they choose. Systematic redemption plan lets clients receive regular cash payments from their funds. Systematic transfer plan allows clients to make regular transfers or conversions from one fund to another in the CI Funds family, other than Select Funds. Flexible (AT5 and AT8) clients may customize the regular monthly cash distributions they receive by selecting the funds and instructing CI to pay a portion of the monthly cash distributions with any difference being automatically reinvested in that same fund. * Please speak to your CI Sales Team or CI Client Services for exact information as trailers vary by fund type. CI solutions available in embedded-fee fund classes Class E (PIM) Class A ISC LL DSC Portfolio Series Portfolio Series G5 20 Series Portfolio Series G5 20 Series Portfolio Series G5 20 Series

8 CI s tax-efficient fund classes Prudent tax management is essential, particularly for clients with substantial non-registered investments. Based on a tax-efficient corporate structure, CI is an excellent solution for building a non-registered portfolio. It allows you to: Achieve tax-deferred compound growth. Receive tax-efficient capital gains or Canadian dividends. Benefit from a low dividend payout policy. Not all corporate class structures are the same. CI was the first to establish a multi-class investment fund corporation in Canada in 1987 and today, CI is one of the largest, most diversified and best managed tax-efficient investment structures of its kind in Canada, with approximately $40 billion in assets. When clients would like to draw cash flow from their portfolio, builds on the CI platform. provides customizable monthly payments of non-taxable return of capital through a choice of more than 50 CI mandates. The G5 20 Series mutual funds offer guaranteed tax-effective cash flow for non-registered accounts: Like CI s, it is substantially characterized as return of capital from the fund. When the adjusted cost base reaches zero, cash flows are treated as capital gains. The fund s underlying actively managed funds are, minimizing the potential for any annual taxable distributions. Guaranteed distributions from a non-registered account are not subject to clawback of Old Age Security.

9 Key benefits and flexibility Tiered pricing for larger accounts, an incentive for prospects and existing clients to consolidate assets with you. Management fee and dealer service fee can be charged externally, for clients who favour the benefits of fee transparency. Accounts can be linked with a $250,000 threshold based on all household assets rather than a single account with $100,000 mandate minimums waived to help you consolidate family assets. Flexible dealer service fee options are designed to fit your practice you can apply them at the household, account or mandate level. Available in Class EF and Class O* for fee-based accounts. Available in Class E for embedded fee programs. CI Private Investment Management For your fee-based and embedded-fee accounts. Incentives such as tiered pricing to help you consolidate assets of high net worth clients. * If you plan to use Class O for a fee-based account, please confirm eligibility with your dealer.

10 Fund classes at a glance Class A Class F Class E (available in PIM) Class EF (available in PIM) Class O (available in PIM) Management fee Embedded and calculated as a % of NAV Embedded and calculated as a % of NAV Embedded and calculated as a % of NAV; quarterly tiered rebates Embedded and calculated as a % of NAV; quarterly tiered rebates Charged as a redemption of units by CI; quarterly tiered rate Operating expenses Embedded and fixed (0.17%-0.22%) Embedded and fixed (0.17%-0.22%) Embedded and fixed at 0.15% Embedded and fixed at 0.15% Embedded and fixed at 0.15% Trailer fee Embedded None Embedded (rebates available) None None Dealer service/ investment advisory fee None Administered by your dealer* None Administered by your dealer Administered by CI or your dealer Up-front commission ISC: 0-5% DSC: 5% LL: up to 2.5% None ISC: 0-5% None None Eligible for fee-based accounts No Yes No Yes Yes** Initial minimum investment $500 $500 $100,000 per fund or minimums waived at $250,000 per household $100,000 per fund or minimums waived at $250,000 per household $100,000 per fund or minimums waived at $250,000 per household Subsequent investment $50 $50 $5,000 $5,000 $5,000 * Class F can be made available to advisors whose dealer does not have a fee-based platform. CI can administer the dealer service fee, between 0% and 1.50%, if instructed by you and approved by your dealer. **Confirm eligibility with your dealer.

11 CI has experienced strong growth over the years, as we have evolved and innovated to meet the increasingly diverse and complex needs of advisors and their clients. CI offers you and your clients: Expertise CI s award-winning lineup of portfolio management teams consists of some of the country s best money managers. Their expertise and accomplishments have been recognized through an extensive list of accolades, including 55 Morningstar Awards since 1998 and 56 Lipper Fund Awards since Choice CI provides the industry s widest selection of investment funds, representing a diverse selection of investment styles, mandates and product platforms, including mutual funds, segregated funds and managed solutions. This selection allows you to build a portfolio that meets unique client needs all within the CI lineup. Experience CI has five decades of experience in investment management and has established a strong overall track record of performance, as well as excellence in fund administration and operations. Strength CI is backed by the financial strength of its parent company CI Financial Corp., an independent, diversified wealth management firm listed on the Toronto Stock Exchange (symbol: CIX).

12 For more information on CI s solutions for your fee-based and embedded-fee accounts, please visit these online sites or contact your CI Sales Representative FOR ADVISOR USE ONLY NOT FOR DISTRIBUTION TO CLIENTS This document is intended for advisor use only and is not a sales communication. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. CI Investments and the CI Investments design are registered trademarks of CI Investments Inc. Portfolio Series,, G5 20 Series and the G5 20 Series design are trademarks of CI Investments Inc. First published June Queen Street East, Twentieth Floor, Toronto, Ontario M5C 3G7 I Head Office / Toronto Calgary Montreal Vancouver Client Services English: French: _E (02/17)