Portfolio Review xxx Quarter 20xx. Evolution 40i60e Model Portfolio Portfolio Review First Quarter 2018

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1 Portfolio Review xxx Quarter 20xx Evolution 40i60e Model Portfolio Portfolio Review First Quarter 2018 Q1

2 Overview Diversified portfolios capture gains from asset classes and security types that are performing well, while limiting exposure to those that are underperforming. Evolution s portfolios are diversified not only across asset classes such as equities, bonds and real estate, but also by country, market capitalization, industry sector and investment style. CI Multi-Asset Management combines its portfolio construction expertise with ongoing comprehensive research and recommendations from State Street Global Advisors, one of the world s largest investment management companies, to create portfolios designed to capture evolving opportunities in the various asset classes. Each Evolution portfolio consists of a number of United and CI mutual funds. The information in the Portfolio Performance and Activity sections below is an aggregate of the underlying funds that make up the portfolio. Portfolio Performance Based on net returns and representative of Class E shares of the underlying United Funds and Class A shares of the underlying Cambridge Canadian Equity Corporate Class, Synergy American Corporate Class and Signature Emerging Markets Corporate Class funds. Returns are rounded to one decimal place. 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years Since Inception (September 2008) -0.4% -1.0% 2.0% 3.2% 4.0% 8.0% 7.6% Activity This report is designed to provide you with an up-to-date look at the Evolution 40i60e Model Portfolio, including the allocations by type of underlying investment and geographic region. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end. Underlying Investments Geographic Regions 24.8% 17.2% 16.0% 11.8% 11.4% 7.9% 4.9% 3.5% 2.5% U.S. equity Canadian bond Canadian equity European equity Foreign bond Cash Asian equity Emerging markets equity Other equity 33.2% 31.9% 17.9% 4.3% 3.9% 3.4% 1.4% 1.4% 1.3% 1.2% Canada U.S. Cash and other countries Emerging markets U.K. Japan Germany Cayman Islands Switzerland Bermuda Equity Market Cap Equity Industry Sector 79.8% 18.9% 1.3% Large-cap Mid-cap Small-cap 18.6% 13.2% 12.6% 11.4% 9.3% 9.3% 7.2% 6.5% 6.1% 4.0% 1.6% 0.2% Financial services Information technology Real estate Industrials Energy Consumer discretionary Consumer staples Health care Materials Utilities Telecommunication services Other 22

3 Portfolio Target Allocations Income and Real Estate 40% Canadian Fixed Income Corporate Class 21% Real Estate Investment Corporate Class 7% Global Fixed Income Corporate Class 6% Enhanced Income Corporate Class 6% Canadian Equity 23% Cambridge Canadian Equity Corporate Class 8% Canadian Equity Alpha Corporate Class 6% Canadian Equity Value Corporate Class 5% Canadian Equity Small Cap Corporate Class 4% Top Ten Holdings Ontario Province 3.5% 02Jun24 1.1% Ontario Province 2.4% 02Jun26 1.0% Ontario Province 2.6% 02Jun25 0.9% Quebec Province 2.5% 01Sep26 0.8% Athene Holding Ltd. 0.8% Canadian Natural Resources Ltd. 0.8% Microsoft Corp. 0.8% Canada Gov't Bond 1.25% 01Feb20 0.7% Atco Ltd. 0.7% SNC-Lavalin Group Inc. 0.7% U.S. Equity 18% Synergy American Corporate Class 6% US Equity Value Corporate Class 4% US Equity Alpha Corporate Class 4% US Equity Small Cap Corporate Class 4% International Equity 19% International Equity Growth Corporate Class 5% Signature Emerging Markets Corporate Class 5% International Equity Alpha Corporate Class 5% International Equity Value Corporate Class 4% 23

4 Portfolio Commentary The portfolio declined 1% during the quarter, slightly underperforming its benchmark (40% FTSE TMX Canada Universe Bond Index, 30% S&P/TSX Composite Index, 30% MSCI World Index C$), which fell 0.9%. In the equity portion, Canadian information technology and energy stocks made positive contributions to relative performance, while international consumer staples and industrials holdings detracted. In the income portion, global bonds and U.S.-dollar exposure made positive contributions to relative performance, while diversified exposure to global listed real estate, infrastructure and dividend-paying equities detracted. Global equity markets soared in January, continuing 2017 s gains. In early February, however, market volatility resurfaced and stocks declined, as very positive U.S. economic data prompted investor concerns about rising inflation. Valuations recovered during the ensuing weeks, but markets were roiled again in late March by rising international trade tensions. The North American energy and materials sectors were among the weakest during the quarter. Information technology was a top performer, although gains achieved early in the period were reduced by later losses. The S&P/ TSX Composite Index lagged global equity markets due to its heavy weightings in the resource sectors and its under-representation in sectors that outperformed, including information technology. The Canadian dollar depreciated against its U.S. counterpart, which created positive returns in foreign markets for Canadian investors after currency conversion. Central banks worldwide continued to weigh their options for scaling back monetary policies designed to stimulate the economy. Despite continuing economic growth, the Bank of Canada in early March maintained the target for its key overnight interest rate at 1.25%, citing international trade uncertainties. The U.S. Federal Reserve, under new Chairman Jerome Powell, raised its target range for the federal funds rate by one-quarter of a percentage point, based on a stronger economic outlook. This was in line with market expectations. Government bond yields rose early in the quarter, reflecting the market s optimism for continued global growth and expectations of higher interest rates. government bonds for safety and income. Interest rate sensitivity is hedged by diversifying into other asset classes, such as gold bullion, corporate bonds and stocks. Within the corporate bond portion, we maintain a short term to maturity as we near the latter stages of the economic cycle, when credit defaults could become more frequent. Currency hedging detracted from relative performance during the quarter, after playing a positive role in 2017 when it mitigated some foreign investment losses. Nonetheless, we continue to attempt to limit the effects of exchange rate fluctuations by maintaining our long-standing, partial hedge on the portfolio. Our market outlook has not changed from the previous quarter, and we believe equity valuations are nearing their peaks. While we believe it is possible for corporate earnings to continue to grow, market prosperity could be threatened by macroeconomic developments in such areas as global trade, credit conditions, sovereign and household debts, and central bank policies. We will monitor these threats closely and will continue to use derivatives to help manage the risk of stock market decline. The U.S. deficit and debt expansion are significant concerns, as we believe these will weaken the U.S. dollar. We are decreasing our U.S. exposure by selling assets denominated in the greenback and increasing our hedge ratio. With correlation increasing between asset classes (equities and bonds) and declining among stock prices, true active management employing both asset allocation and security selection is more important than ever. Moreover, active management thrives during periods of high market volatility, while a passive approach is exposed to the fluctuations of the entire market. Our equity allocation is more diversified than that of the Canadian economy and the S&P/TSX Composite Index. Our largest underweight allocation relative to the index is in the financials sector and the positioning within the sector is more diversified than the benchmark. We had overweight exposure to defensive sectors, such as health care and consumer staples, and were underweight in cyclical and interest-rate-sensitive sectors, such as energy and telecommunications services. In the income portion of the portfolio, our core goals remain preserving capital and outpacing inflation over a three-year period. We focus on careful portfolio construction and asset allocation, built on a foundation of 24

5 Despite our underweighting in Canada, holding domestic assets nonetheless caused some downside, as investors were focused on negative economic issues, such as high household debt, low oil prices and trade uncertainties. However, we consider this a very restrictive view of domestic equities, which we see as increasingly offering better value than other markets. We continue to look for opportunities in areas that have been out of favour and under-bought, but in which investment fundamentals remain strong. The Canadian equity portion outperformed the market. The portfolio has underweight allocations to the resources and financials sectors, and overweight positions in other areas such as utilities and consumer staples positioning that we believe enhances risk-adjusted return potential. Cambridge Canadian Equity Corporate Class s exposure to the U.S. dollar, overweight allocation to the information technology sector and stock selection in energy added relative value. The U.S. equity portion underperformed the broader U.S. markets. The portfolio has overweight allocations to the materials and financials sectors, and underweight positions in other areas such as consumer discretionary and health care. The U.S. Equity Alpha pool s underweight allocation to information technology and consumer discretionary as well as stock selection in financials detracted from relative value. The international equity portion underperformed the broader international equity markets. The International Alpha Equity pool s holdings in consumer staples and industrials detracted from relative value. Currency hedging detracted from performance as the Canadian dollar depreciated against most major currencies. An allocation to emerging markets added value over the quarter. This portion had an overweight allocation to information technology, and was underweight industrials, real estate and utilities. Geographically, we had overweight exposure to emerging markets, mainly in Asia and Latin America, and were significantly underweight Australia and Japan. Alfred Lam, CFA, Senior Vice-President and Chief Investment Officer Yoonjai Shin, CFA, Vice-President and Portfolio Manager Marchello Holditch, CFA, Vice-President Milica Stojanovic, Associate Director Andrew Ashworth, MBA, CFA Desta Tadesse, Analyst Zoe Li, Junior Analyst We held a market hedge through S&P 500 derivatives to limit portfolio volatility. This hedge remains in place and will be removed only when the risk-return trade-off becomes favourable. 25

6 Portfolio management teams In the Evolution Private Managed Accounts program

7 For more information on Evolution Private Managed Accounts, please contact your advisor or visit Evolution Private Managed Accounts is a program that provides strategic asset allocation across a series of portfolios comprised of United and CI mutual funds and is managed by CI Investments Inc. ( CII ). Evolution Private Managed Accounts is not a mutual fund. CII provides portfolio management and investment advisory services as a registered advisor under applicable securities legislation. Evolution Private Managed Accounts is available through Assante Financial Management Ltd. and Assante Capital Management Ltd., affiliates of CII. The principal business of CII is the management, marketing, distribution and administration of mutual funds, segregated funds and other fee-earning investment products for Canadian investors. If you invest in CII products, CII will earn ongoing asset management fees in accordance with applicable prospectus or other offering documents. All commentaries are published by CII, the manager of all the funds described herein. They are provided as a general source of information and should not be considered personal investment advice or an offer or solicitation to buy or sell securities. Every effort has been made to ensure that the material contained in the commentaries is accurate at the time of publication. However, CII cannot guarantee their accuracy or completeness and accepts no responsibility for any loss arising from any use of or reliance on the information contained herein. This report may contain forward-looking statements about the funds, future performance, strategies or prospects, and possible future fund action. These statements reflect the portfolio managers current beliefs and are based on information currently available to them. Forward-looking statements are not guarantees of future performance. We caution you not to place undue reliance on these statements as a number of factors could cause actual events or results to differ materially from those expressed in any forward-looking statement, including economic, political and market changes and other developments. All indexes quoted in this document are reported on a total return basis, which assumes the reinvestment of all dividends and other cash distributions. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments and the use of an asset allocation service. Please read the prospectus of the mutual funds in which investment may be made under the asset allocation service before investing. The indicated rates of return are the historical annual compounded total returns assuming the investment strategy recommended by the asset allocation service is used and after deduction of the fees and charges in respect of the service. The returns are based on the historical annual compounded total returns of the participating funds including changes in share unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder in respect of a participating fund that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Signature Global Asset Management, Signature Funds and CI Multi-Asset Management are trademarks of CII. Evolution, Cambridge, CI Investments, the CI Investments design, Harbour Advisors and Harbour Funds are registered trademarks of CII. Cambridge Global Asset Management is a division of CII. Certain funds associated with Cambridge Global Asset Management are sub-advised by CI Global Investments Inc., a firm registered with the U.S. Securities and Exchange Commission and an affiliate of CII Asset Management L.P. and the 1832 Asset Management design are trademarks of The Bank of Nova Scotia, used under licence. All trademarks used under licence. Published May _E (05/18)