Dynamic Dividend Advantage Fund

Transcription

1 27JAN Dynamic Dividend Advantage Fund Interim Management Report of Fund Performance For the period ended December 31, 217 This interim management report of fund performance contains financial highlights but does not contain the complete interim financial statements of the investment fund. You can get a copy of the interim financial statements at your request, and at no cost, by calling toll-free , by writing to us at 1832 Asset Management L.P., Dynamic Funds Tower, 1 Adelaide Street East, 28th Floor, Toronto, ON, M5C 2V9 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 annual financial statements, proxy voting policies and procedures, proxy voting disclosure record or quarterly portfolio disclosure Asset Management L.P. is the manager (the Manager ) of the fund. In this document, we, us, our and the Manager refer to 1832 Asset Management L.P. and the Fund refers to Dynamic Dividend Advantage Fund. The term net asset value or net asset value per unit in this document refers to the net asset value determined in accordance with Part 14 of National Instrument Investment Fund Continuous Disclosure ( National Instrument ); while the term net assets or net assets per unit refers to total equity or net assets attributable to unitholders of the Fund as determined in accordance with International Financial Reporting Standards ( IFRS ). Caution Regarding Forward-Looking Statements Certain portions of this report, including, but not limited to, Recent Developments, may contain forward-looking statements about the Fund and the underlying funds, as applicable, including statements with respect to strategies, risks, expected performance events and conditions. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates, projects and similar forward-looking expressions or negative versions thereof. In addition, any statement that may be made concerning future performance, strategies or prospects and possible future action by the Fund is also a forward-looking statement. Forwardlooking statements are based on current expectations and projections about future general economic, political and relevant market factors, such as interest rates, foreign exchange rates, equity and capital markets, and the general business environment, in each case assuming no changes to applicable tax or other laws or government regulation. Expectations and projections about future events are inherently subject to, among other things, risks and uncertainties, some of which may be unforeseeable. Accordingly, current assumptions concerning future economic and other factors may prove to be incorrect at a future date. Forward-looking statements are not guarantees of future performance and actual results or events could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, such as interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government relations, unexpected judicial or regulatory proceedings and catastrophic events. We stress that the above mentioned list of important factors is not exhaustive. Some of these risks, uncertainties and other factors are described in the Fund s simplified prospectus, under the heading Risk Factors. We encourage you to consider these and other factors carefully before making any investment decisions. Forward-looking statements should not be unduly relied upon. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next management report of fund performance, and that the forward-looking statements speak only to the date of this management report of fund performance. Results of Operations For the six month period ended at December 31, 217 (the period ), the Series A units of the Fund returned 3.4%. Fund returns are reported net of all management fees and expenses for all series, unlike the returns of the Fund s benchmark, which is based on the performance of an index that does not pay fees or incur expenses. Returns for other series of the Fund will be similar to Series A with any difference in performance being primarily due to different management fees, operating expenses and other expenses that are applicable to that particular series. Please see the Past Performance section for the performance of the Fund s other series. The Fund s broad-based benchmark, the S&P/TSX Composite Index, returned 8.3% during the same period. In accordance with National Instrument 81-16, we have included a comparison to this broad-based index to help you understand the Fund s performance relative to the general performance of the market. The second half of 217 saw better performance out of the Canadian equity market relative to the first six months of the year. Leading into the summer months the world s major central

2 banks began to signal the need to scale back on stimulus measures and look towards interest rate increases. In July, the Bank of Canada raised interest rates by 25 bps, an action that would be repeated in September as the Canadian economy continued to remain resilient despite NAFTA worries and tensions between the U.S. and North Korea. Despite a second rate increase, Canadian equities delivered solid positive returns led by the Health Care and Financial sectors. By the end of December, all eleven sectors produced positive performance as the outlook for global growth improved throughout the period concurrent with modest increases in earnings expectations and valuation multiples. During the period the Fund underperformed the broad-based benchmark, with the main detractors from relative performance being security selection in the Consumer Discretionary, Financials and Energy sectors. Contributing to the Fund s absolute performance were holdings in the Industrials and Financials sectors. Recent Developments Portfolio Manager Change DYNAMIC DIVIDEND ADVANTAGE FUND Effective September 19, 217, Don Simpson and Eric Mencke were added to the portfolio management responsibilities on the Fund. Change to Risk Classification Methodology Effective November 17, 217, the Manager has implemented a new Risk Classification Methodology recently mandated by the Canadian Securities Administrators, which is used to determine the investment risk level of the Fund. The investment risk level of the Fund has changed from Low-to-Medium to Medium as a result of the implementation. There are no changes to the investment objectives or strategies of the Fund as a result of the implementation. IFRS 9, Financial Instruments Individual securities which detracted from the period s The final version of IFRS 9, Financial Instruments was issued by performance were concentrated in the Energy and Consumer the International Accounting Standards Board ( IASB ) in Discretionary sectors and included Cineplex, Uni-Select, Advance July 214 and will replace IAS 39, Financial Instruments: Auto Parts (Consumer Discretionary), Arc Resources, Precision Recognition and Measurement, related to the classification and Drilling, PrairieSky Royalty, Parkland Fuel (Energy), Envision measurement of financial assets and financial liabilities. Healthcare, Mednax (Health Care) and Metro (Consumer IFRS 9 relates to the classification and measurement of financial Staples). The period s top contributing positions included assets and financial liabilities in the Fund. The new standard is Toronto-Dominion Bank, Royal Bank of Canada, Canadian effective for the Fund for the fiscal year beginning July 1, 218. Imperial Bank of Commerce, Intact Financial (Financials), The Manager has been evaluating the standard and has currently Suncor Energy (Energy) and Microsoft (Information determined that the impact to the Fund will include additional Technology). disclosures related to changes to the classification of certain At the end of the period, the Fund s largest sector weights were financial instruments to align with the classifications under Financials, Industrials, Consumer Discretionary and Energy. The IFRS 9. Adoption of the standard will not impact net assets Fund s allocation to the Energy sector was reduced from 16% to attributable to holders of redeemable units. 1% during the period while the allocation to both Financials and Materials both increased. Related Party Transactions The Fund s net asset value decreased by 13.5% to $81.7 million The Manager is a wholly-owned subsidiary of The Bank of Nova at December 31, 217, from $927. million at June 3, 217. This Scotia ( Scotiabank ). Scotiabank also owns, directly or change was composed of net redemptions of $15.7 million, cash indirectly, 1% of Scotia Securities Inc. and Tangerine distributions of $2.6 million and investment performance of Investment Funds Limited, each a mutual fund dealer, and Scotia $28. million. The investment performance of the Fund includes Capital Inc. (which includes ScotiaMcLeod and Scotia itrade), income and expenses which vary year over year. The Fund s an investment dealer. income and expenses changed compared to the previous year On August 4, 217, Industrial Alliance Insurance and Financial mainly as a result of fluctuations in average net assets, portfolio Services Inc. completed its acquisition of HollisWealth including activity, changes in the Fund s income earning investments and HollisWealth Advisory Services Inc. (collectively, HollisWealth ), reductions in fixed administration fees. a related party of the Manager. As such, HollisWealth ceased to Certain series of the Fund, as applicable, may make distributions be a related party. at a rate determined by the Manager from time to time. If the The Manager, on behalf of the Fund, may enter into transactions aggregate amount of distributions in such series exceeds the or arrangements with other members of Scotiabank or certain portion of net income and net realized capital gains allocated to other companies that are related or connected to the Manager such series, the excess will constitute a return of capital. The (each a related party ). All transactions between the Fund and Manager does not believe that the return of capital distributions the related parties are in the normal course of business and are made by such series of the Fund have a meaningful impact on carried out at arm s length terms. the Fund s ability to implement its investment strategy or to fulfill its investment objective. The purpose of this section is to provide a brief description of any transaction involving the Fund and a related party.

3 Management Fees derivatives transactions. The Manager, or its affiliates, may earn The Manager is responsible for the day-to-day management and a foreign exchange spread when unitholders switch between operations of the Fund. Certain series of the Fund pay the series of funds denominated in different currencies. Manager a management fee for its services as described in the Management Fee section later in this document. The Independent Review Committee management fee is an annualized rate based on the net asset The Manager has established an independent review committee value of each series of the Fund, accrued daily and calculated (the IRC ) in accordance with National Instrument and paid monthly. Independent Review Committee for Investment Funds ( NI ) with a mandate to review and provide Fixed Administration Fees and Other Fund Costs recommendations or approval, as required, on conflict of interest The Manager pays the operating expenses of the Fund, other matters referred to it by the Manager on behalf of the Fund. The than Other Fund Costs, in exchange for the payment by the Fund IRC is responsible for overseeing the Manager s decisions in of a fixed rate administration fee (the Fixed Administration situations where the Manager is faced with any present or Fee ) to the Manager with respect to each series of the Fund. perceived conflicts of interest, all in accordance with NI The expenses charged to the Fund in respect of the Fixed The IRC may also approve certain mergers between the Fund and Administration Fee are disclosed in the Fund s financial other funds, and any change of the auditor of the Fund. Subject statements. The Fixed Administration Fee is equal to a specified to any corporate and securities law requirements, no percentage of the net asset value of a series, calculated and paid securityholder approval will be obtained in such circumstances, in the same manner as the management fees for the Fund. but you will be sent a written notice at least 6 days before the Further details about the Fixed Administration Fee can be found effective date of any such transaction or change of auditor. In in the Fund s most recent simplified prospectus. certain circumstances, securityholder approval may be required In addition, each series of the Fund is responsible for its to approve certain mergers. proportionate share of certain operating expenses ( Other Fund The IRC has five members, Carol S. Perry (Chair), Brahm Costs ). Further details about Other Fund Costs can be found in Gelfand, Simon Hitzig, D. Murray Paton and Jennifer L. the Fund s most recent simplified prospectus. Witterick, each of whom is independent of the Manager. The Manager, at its sole discretion, may waive or absorb a portion The IRC prepares and files a report to the securityholders each of a series expenses. These waivers or absorptions may be fiscal year that describes the IRC and its activities for terminated at any time without notice. securityholders as well as contains a complete list of the standing instructions. These standing instructions enable the Manager to Related Brokerage Commissions act in a particular conflict of interest matter on a continuing From time to time, the Fund may enter into portfolio securities basis provided the Manager complies with its policies and transactions with Scotia Capital or other related dealers in whom procedures established to address that conflict of interest matter Scotiabank has a significant interest (a Related Broker ). These and reports periodically to the IRC on the matter. This report to Related Brokers may earn commission or spreads on such the securityholders is available on the Manager s website or, at no transactions, which are made on terms and conditions that are cost, by contacting the Manager. comparable to transactions made with non-related brokers. The compensation and other reasonable expenses of the IRC will During the period, the Fund paid $9, in commissions to be paid out of the assets of the Fund as well as out of the assets Related Brokers. of the other investment funds for which the IRC may act as the independent review committee. The main components of Distribution Services compensation are an annual retainer and a fee for each committee meeting attended. The chair of the IRC is entitled to Certain registered dealers through which units of the Fund are an additional fee. Expenses of the IRC may include premiums for distributed are related parties to the Fund and the Manager. The insurance coverage, travel expenses and reasonable out-of-pocket Manager pays to these related parties a trailer commission out of expenses. its management fees, representing distribution and servicing fees, based on the amount of assets held in the investors The Fund received the following standing instructions from the accounts. These fees are paid on the same basis and at the same IRC with respect to related party transactions: rates that the Manager pays to non-affiliated dealers. Paying brokerage commissions and spreads to a related party for effecting security transactions on an agency and principal Other Fees basis on behalf of the Fund; The Manager, or its affiliates, may earn fees and spreads in Purchases or sales of securities of an issuer from or to another connection with various services provided to, or transactions investment fund managed by the Manager; with, the Fund, such as banking, brokerage, foreign exchange or

4 Investments in the securities of issuers for which a related underwriter acted as an underwriter during the distribution of such securities and the 6-day period following the completion of such distribution; Executing foreign exchange transactions with a related party on behalf of the Fund; Purchases of securities of a related party; Entering into over-the-counter derivatives on behalf of the Fund with a related party; Entering into securities lending transactions with a related party; Outsourcing products and services to related parties which can be charged to the Fund; Acquisition of prohibited securities as defined by securities regulations; Trading in mortgages with a related party. The Manager is required to advise the IRC of any breach of a condition of the standing instructions. The standing instructions require, among other things, that the investment decision in respect to a related party transaction: (a) is made by the Manager free from any influence by an entity related to the Manager and without taking into account any consideration to any associate or affiliate of the Manager; (b) represents the business judgment of the Manager uninfluenced by considerations other than the best interests of the Fund; and (c) is made in compliance with the Manager s written policies and procedures. Transactions made by the Manager under the standing instructions are subsequently reviewed by the IRC to monitor compliance. The Fund relied on IRC standing instructions regarding related party transactions during the period. Financial Highlights The following tables show selected key financial information about each series of the Fund and are intended to help you understand the Fund s financial performance for the periods indicated. The information on the following tables is based on prescribed regulations and as a result, is not expected to add down due to the increase (decrease) in net assets from operations being based on average units outstanding during the period and all other numbers being based on actual units outstanding at the relevant point in time. Footnotes for the tables are found at the end of the Financial Highlights section. The Fund s Net Assets per Unit ($) (1) Increase (decrease) from operations Distributions Realized Unrealized Total From net Net gains gains increase investment Net Assets, (losses) (losses) (decrease) income From Return Assets, beginning Total Total for the for the from (excluding From capital of Total end of For the period ended of period revenue expenses period period operations (2) dividends) dividends gains capital distributions (3) period (1) Series A Dec. 31, (.11) (.64) (.5) (.28) (.33) June 3, (.21) (.1) (.14) (.42) (.66) June 3, (.2).4 (1.1) (.49) (.5) (.11) (.18) (.79) June 3, (.25) 1.25 (1.3).8 (.9) (1.76) (1.85) June 3, (.26) (.13) (.14) (.4) (.67) June 3, (.25) 1.68 (.6) 1.72 (.16) (.36) (.52) Series F Dec. 31, (.5) (.51).7.25 (.6) (.2) (.26) 8.24 June 3, (.1) (.11) (.1) (.29) (.5) 8.2 June 3, (.1).27 (.62) (.23) (.34) (.11) (.13) (.58) 8.15 June 3, (.14).83 (.82).13 (.9) (1.22) (1.31) 8.91 June 3, (.15) (.11) (.1) (.27) (.48) 1.14 June 3, (.15) 1.17 (.9) 1.18 (.14) (.25) (.39) 8.1 Series FT Dec. 31, (.6) (.49) (.6) (.34) (.4) 9.36 June 3, (.12) (.12) (.12) (.54) (.78) 9.42 June 3, (.12).26 (.55) (.14) (.8) (.8) 9.56 June 3, (.17) 1.3 (1.9).8 (.1) (1.45) (1.55) 1.59 June 3, (.18) (.13) (.12) (.57) (.82) 12.5 June 3, (.18) 1.52 (.38) 1.3 (.4) (.68) (.72) 9.84

5 Increase (decrease) from operations Distributions Realized Unrealized Total From net Net gains gains increase investment Net Assets, (losses) (losses) (decrease) income From Return Assets, beginning Total Total for the for the from (excluding From capital of Total end of For the period ended of period revenue expenses period period operations (2) dividends) dividends gains capital distributions (3) period (1) Series I Dec. 31, (.1) (.41) (.9) (.19) (.28) 7.81 June 3, (.2) (.18) (.9) (.29) (.56) 7.78 June 3, (.2).19 (.47) (.8) (.37) (.15) (.5) (.57) 7.74 June 3, (.3).79 (.81).2 (.17) (1.14) (1.31) 8.41 June 3, (.4) (.2) (.9) (.25) (.54) 9.55 June 3, (.5) 1.24 (.2) 1.26 (.3) (.1) (.4) 7.6 Series IT Dec. 31, (.1) (.39) (.8) (.22) (.3) 7.28 June 3, (.2) (.17) (.9) (.33) (.59) 7.29 June 3, (.2).21 (.45) (.6) (.61) (.61) 7.32 June 3, (.3).8 (.87).14 (.17) (1.12) (1.29) 8.3 June 3, (.4) (.21) (.1) (.31) (.62) 9.15 June 3, (.5) 1.6 (.4) 1.19 (.14) (.4) (.54) 7.38 Series O Dec. 31, (.1) (.41) (.9) (.19) (.28) 8. June 3, (.2) (.18) (.9) (.31) (.58) 7.97 June 3, (.2).25 (.51) (.6) (.36) (.17) (.8) (.61) 7.93 June 3, (.3).67 (.27).62 (.14) (.94) (1.8) 8.64 June 3, (.3) (.2) (.9) (.25) (.54) 9.54 June 3, (.5) (.19) (.26) (.45) 7.6 Series T Dec. 31, (.8) (.34) (.1) (.26) (.27) 6.26 June 3, (.16) (.1) (.8) (.43) (.52) 6.35 June 3, (.16).23 (.6) (.35) (.56) (.56) 6.52 June 3, (.21).71 (.73) (.2) (.96) (.96) 7.31 June 3, (.21) (.2) (.9) (.46) (.57) 8.28 June 3, (.2) (.51) (.51) 6.84 (1) This information is derived from the Fund s interim and audited annual financial statements. The net assets per unit presented in the financial statements may differ from the net asset value calculated for Fund pricing purposes. An explanation of these differences can be found in note 2 of the Fund s financial statements. The net asset value per unit at the end of the period is disclosed in Ratios and Supplemental Data. Information related to 213 and prior was prepared in accordance with Part V of the CPA Handbook (Pre-Changeover Accounting Standards) and subsequent to 213 was prepared in accordance with Part I of the CPA Handbook (International Financial Reporting Standards). (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant series 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 series over the period. (3) Distributions were paid in cash or reinvested in additional units of the Fund. Ratios and Supplemental Data Management MER before Total net asset Number of units expense ratio waivers or Trading expense Portfolio turnover Net asset value As at value (in $s) (1) outstanding (1) ( MER ) (%) (2) absorptions (%) (2) ratio (%) (3) ratio (%) (4) per unit ($) Series A Dec. 31, ,88 28,684, * 1.54*.21* June 3, ,512 33,196, June 3, ,476 36,579, June 3, ,955 44,31, June 3, ,532 41,172, June 3, ,98 26,875, Series F Dec. 31, 217 4,676 4,936,99.98*.98*.21* June 3, ,82 7,97, June 3, ,79 7,497, June 3, ,918 8,184, June 3, ,887 5,88, June 3, ,369 3,246, Series FT Dec. 31, 217 4, ,92 1.1* 1.1*.21* June 3, 217 4, , June 3, 216 3, , June 3, 215 2, , June 3, 214 2, , June 3, ,

6 Management MER before Total net asset Number of units expense ratio waivers or Trading expense Portfolio turnover Net asset value As at value (in $s) (1) outstanding (1) ( MER ) (%) (2) absorptions (%) (2) ratio (%) (3) ratio (%) (4) per unit ($) Series I Dec. 31, ,22.9*.9*.21* June 3, , June 3, , June 3, , June 3, , June 3, , Series IT Dec. 31, 217 6, ,757.9*.9*.21* June 3, 217 6, , June 3, 216 6,58 827, June 3, 215 3, , June 3, 214 4,36 44, June 3, 213 2,153 29, Series O Dec. 31, ,676 45,44,131.4*.4*.21* June 3, ,734 5,936, June 3, ,861 34,781, June 3, ,133 34,258, June 3, ,177 5,469, June 3, ,963 5,894, Series T Dec. 31, ,789 7,311, * 2.21*.21* June 3, ,598 8,287, June 3, ,894 9,649, June 3, ,75 12,599, June 3, 214 1,233 12,1, June 3, ,444 9,99, * Annualized (1) This information is provided as at the period end of the years shown. (2) The management expense ratio is based on total expenses (including sales tax, and excluding commissions and other portfolio transaction costs) of each series of the Fund and a proportionate share of underlying fund expenses (mutual funds, ETFs and closed-end funds), where applicable, for the stated period and is expressed as an annualized percentage of the daily average net asset value during the period. (3) The trading expense ratio represents total commissions and other portfolio transaction costs of the Fund and the underlying funds, where applicable, expressed as an annualized percentage of daily average net asset value of the Fund during the period. (4) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 1% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the 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 year. There is not necessarily a relationship between a high turnover rate and the performance of a fund. Management Fee Management Dealer fees compensation Other The management fee is an annualized rate based on the net asset (%) (%) (%) value of each series of the Fund, accrued daily and calculated Series A Series F and paid monthly. The management fees cover the costs of Series FT managing the Fund, arranging for investment analysis, Series I* n/a n/a n/a recommendations and investment decision making for the Fund, Series IT* n/a n/a n/a Series O* n/a n/a n/a arranging for distribution of the Fund, marketing and promotion Series T of the Fund and providing or arranging for other services. * The management fee for this series is negotiated and paid directly by these unitholders and not by the Fund. The breakdown of services received in consideration of Relates to all services provided by the Manager described above except dealer management fees for each series, as a percentage of the compensation. management fees, are as follows: Past Performance The following shows the past performance for each series and will not necessarily indicate how the Fund will perform in the future. The information shown assumes that all distributions made by each series of the Fund in the periods shown were reinvested in additional units of the relevant series. In addition, the information does not take into account sales, redemption, distribution or other optional charges that would have reduced returns or performance.

7 Year-by-Year Returns The following charts show the performance for each series of the Fund and illustrate how performance has varied from year to year. The charts show, in percentage terms, how much an investment held on the first day of each fiscal year would have increased or decreased by the last day of each fiscal year for that series. (for fiscal years ended June 3) % 4 % Series IT Units DYNAMIC DIVIDEND ADVANTAGE FUND Series A Units (1) 31.1% 3 % Series O Units % 17.5% 33.2% 9.2% % 2.1%.7% 3.4% 2.4% 19.4% 2 1.8% -2.3% % 2.2% % % % (1) % 7.8% 4.1% -4 % Series F Units (1) % 3 % Series T Units % 17.9% 3.% 9.6% % 2.5% 1.% 3.7% % 16.6% -1.8% 1 8.5% 5.4% % 1.3% 2.9% % -2.9% % % (1) % -4 % Series FT Units (1) 4 (1) Six month period ended December 31, % 3 Summary of Investment Portfolio % 1 The Summary of Investment Portfolio may change due to ongoing 6.6% 3.6% 1.% portfolio transactions. A quarterly portfolio update is available to -1.8% the investor at no cost by calling , or by visiting % 6 days after quarter end, except for June 3, -2 which is the fiscal year end, when they are available after (1) 9 days. % Series I Units Percentage of 4 By Asset Type net asset value 33.2% 3 Equities % 19.3% Cash and Short Term Instruments (Bank Overdraft) % 7.8% Other Net Assets (Liabilities).3 3.7% 2.2% 4.1% -.9% Percentage of % By Country / Region (1) net asset value -2 Canada % United States Cash and Short Term Instruments (Bank Overdraft) (1) 3.6% -27.% 1.9% 2.1% -5.7% 19.2% 33.1% 2.2% -.9% 7.7% 4.2%

8 Percentage of By Industry (1)(2) net asset value Financials 29.1 Consumer Discretionary 15.2 Industrials 12.2 Energy 1. Cash and Short Term Instruments (Bank Overdraft) 6.9 Materials 6.1 Consumer Staples 6. Health Care 4.7 Information Technology 3.6 Telecommunication Services 3.6 Real Estate 1.3 Utilities 1. Percentage of Top 25 Holdings net asset value Cash and Short Term Instruments (Bank Overdraft) 6.9 Royal Bank of Canada 5.2 Toronto-Dominion Bank (The) 4.9 Bank of Nova Scotia (The) 4. Bank of Montreal 3.4 Intact Financial Corporation 3.3 Shaw Communications Inc., Class B 3.1 Canadian National Railway Company 3. Canadian Imperial Bank of Commerce 2.9 Uni-Select Inc. 2.5 K-Bro Linen Inc. 2.4 Morneau Shepell Inc. 2.4 Thomson Reuters Corporation 2.4 Enbridge Inc. 2.3 Alimentation Couche-Tard Inc., Class B, Subordinated Voting 2.2 Agrium Inc. 2.2 United Parcel Service, Inc., Class B 2.2 BCE Inc. 2.2 Microsoft Corporation 2.2 Starbucks Corporation 2.1 Cineplex Inc. 2.1 Canadian Pacific Railway Limited 2.1 Loblaw Companies Limited 2.1 PrairieSky Royalty Ltd. 2. Canadian Natural Resources Limited 2. (1) Excludes other net assets (liabilities) and derivatives. (2) Excludes bonds and debentures. Based on the net asset value, therefore, weightings presented in the Schedule of Investments will differ from the ones disclosed above.