Renaissance Canadian Fixed Income Private Pool. Annual Management Report of Fund Performance

Transcription

1 Renissnce Cndin Fied Income Privte Pool Annul Mngement Report of Fund Performnce for the finncil yer ended August 1, 01 All figures re reported in Cndin dollrs unless otherwise noted This nnul mngement report of fund performnce contins finncil highlights but does not contin the complete nnul finncil sttements of the investment fund If you hve not received copy of the nnul finncil sttements with this nnul mngement report of fund performnce, you cn get copy of the nnul finncil sttements t your request, nd t no cost, by clling us toll-free t 1---, by writing to us t Renissnce Investments, 100 Robert-Bourss Boulevrd, Suite 00, Montrel, QC, HA S, by visiting the SEDAR website t sedrcom, or by visiting renissnceinvestmentsc Unitholders my lso contct us using one of these methods to request copy of the investment fund s proy voting policies nd procedures, proy voting disclosure record, or qurterly portfolio disclosure Mngement Discussion of Fund Performnce Investment Objective nd Strtegies Investment Objective: Renissnce Cndin Fied Income Privte Pool (the Pool) seeks to generte high level of totl investment return by investing primrily in bonds of Cndin governments nd compnies, tht do not mture for t lest one yer, with rting of not lower thn B by DBRS Limited (DBRS), or equivlent Investment Strtegies: The Pool invests primrily in securities issued by Cndin governments nd compnies, nd my lso invest in bonds or other debt instruments tht re issued or gurnteed by interntionl or suprntionl gencies, such s the World Bnk, or by foreign governments or compnies The Pool generlly invests in bonds with rting of BBB or bove by DBRS, or equivlent Risk The Pool is Cndin fied income fund tht is suitble for medium-term investors who cn tolerte low investment risk For the period ended August 1, 01, the Pool s overll level of risk remins s discussed in the simplified prospectus Results of Opertions Bker Gilmore & Assocites Inc (Bker Gilmore), AllinceBernstein Cnd, Inc (AllinceBernstein) nd Cnso Investment Counsel Ltd (Cnso) provide investment dvice nd investment mngement services to the Pool The investment style nd the percentge of the portfolio llocted to these portfolio sub-dvisors re outlined below The portfolio lloction my chnge from time to time l Bker Gilmore: Fied Income Core, pproimtely 0% l AllinceBernstein: Fied Income Core Plus, pproimtely % l Cnso: Corporte Credit, pproimtely 1% The commentry tht follows provides summry of the results of opertions for the period ended August 1, 01 All dollr figures re epressed in thousnds, unless otherwise indicted The Pool's net sset vlue decresed by % during the period, from $, s t August 1, 01 to $0, s t August 1, 01 Net redemptions of $,9 in the period, which included purchses of $ due to reblncing of portfolio product tht holds units of the Pool, nd negtive investment performnce resulted in n overll decrese in net sset vlue Clss A units of the Pool posted return of -1% for the period The Pool s benchmrk, the FTSE TMX Cnd Universe Bond Inde (the benchmrk), returned -1% for the sme period The Pool s return is fter the deduction of fees nd epenses, unlike the benchmrk's return See Pst Performnce for the returns of other clsses of units offered by the Pool Geopoliticl events remined key focus for investors with the election of Donld Trump s US president nd the subsequent politicl issues in the White House, rising tensions with North Kore nd uncertinty over the impct of the renegotition of the North Americn Free Trde Agreement With globl economic growth strengthening, number of developed centrl bnks signlled their intention to normlize monetry policy by rising policy rtes nd ending or unwinding quntittive esing mesures Interest rtes generlly rose The Cndin economy showed further signs of improvement, which led the Bnk of Cnd (BoC) to rise its policy rte in July by bsis points to 0%, the first increse in seven yers Government of Cnd (GoC) bond yields moved shrply higher, led by intermedite mturities, nd both provincil nd corporte spreds (the difference in yields from GoC bonds) tightened The 10-yer GoC bond yield rose pproimtely bsis points to end t 1% With the rise in yields, Cndin fied income sw negtive returns GoC bonds fred worst, returning 9%, while provincil bonds returned 1% nd investment-grde corporte bonds returned 11% US investment-grde corporte bonds lso posted positive returns, while US high-yield bonds were the strongest sector, returning %

2 Renissnce Cndin Fied Income Privte Pool In the Fied Income Core component of the Pool, yield-curve positioning (lloction to bonds of different mturities) detrcted modertely from performnce s the increse in interest rtes ffected medium-term bonds more thn other mturities A slight underweight lloction to the industrils sector detrcted slightly from performnce s corporte spreds tightened Slight individul detrctors included smll overweight holdings in Government of Cnd (10%, 0/1/01), Province of Ssktchewn (90%, 0/0/0) nd severl issues of Province of Ontrio Rel return bonds underperformed nominl bonds, while both these provincil issuers underperformed their peers The component s durtion ( mesure of interest-rte sensitivity) positioning ws significntly shorter thn tht of the benchmrk As interest rtes incresed, this ws significnt contributor to performnce Slight overweight eposures to A-rted finncils sector bonds nd BBB-rted utilities sector bonds contributed modertely to performnce, s did modest overweight eposure to provincil bonds The component s overll yield crry dvntge versus the benchmrk ws moderte contributor Individul securities tht mde slight contributions to the component included slight overweight eposure to Province of Mnitob nd Cnd Housing Trust issues, which outperformed their peer groups A slight underweight eposure to Province of British Columbi issues, which underperformed their peers, lso contributed slightly Bker Gilmore dded new holding in TrnsCnd Trust (%, 0/0/1), which ws offered t n ttrctive level The component hs n overweight eposure to BBB-rted utilities bonds, whose credit spreds remin ttrctive The modest overweight eposure to Cnd Housing Trust mortgge-bcked securities, which re AAA-rted nd gurnteed by the GoC, ws incresed becuse the sub-dvisor prefers these bonds within the sovereign sector The sub-dvisor lso shifted the component s yield-curve positioning to neutrl, nd then to modest underweight eposure to medium- nd longer-term bonds, s mrkets reduced their epecttions of BoC policy rte cuts The sub-dvisor epects yields of longer mturities to rise more thn other mturities Comber Wind LP (1%, 00/11/1), Trillium Windpower LP (0%, 0/0/1), FortisAlbert Inc (%, 09/10/0), Northlnd Power Solr Finnce One LP (0%, 0/0/0) nd Ternet Holdings LP (%, 00/1/1), ll utilities sector bonds, were sold from the component to tke profits following tightening spreds For the sme reson, Bker Gilmore reduced the slight overweight eposure to the finncils sector The sub-dvisor decresed the component s durtion, in prt through holding floting-rte notes, in the epecttion tht yields will rise further The modest overweight eposure to provincil bonds ws slightly decresed by reducing holdings in Province of Ontrio, Province of Mnitob nd Province of British Columbi, lthough some profits were reinvested in issues of Province of Quebec nd Province of Albert In the Fied Income Core Plus component of the Pool, US holdings nd US yield-curve eposure modestly detrcted from performnce Security selection in the provincil bond sector lso detrcted A modest holding in commercil mortgge-bcked security credit-defult swps (CMBS CDS) detrcted modestly s negtive news in the rel estte sector led CMBS CDS to underperform nominl commercil mortgge-bcked securitized bonds Modest eposure to US high-yield corporte bonds significntly contributed to the component s performnce s high-yield bonds outperformed Modest ctive eposure to non-cndin currencies, prticulrly emerging mrkets currencies, lso contributed significntly Modest eposure to Brzilin nd Europen corporte bonds (both investment-grde nd high-yield) contributed significntly Individul contributors included Brclys Bnk PLC, s investment-grde corporte spreds tightened, nd Petrobrs Globl Finnce BV nd Petroleos Meicnos These emerging mrkets, qusi-sovereign issues benefited from the stbiliztion of oil prices The component dded eposure to infltion-protected securities becuse AllinceBernstein believes the mrket is underestimting infltion The sub-dvisor incresed overll eposure to emerging mrkets through sovereign, qusi-sovereign, locl bond nd currency holdings, s growth nd infltion stbilized in mny countries Eposure to Europen corporte bonds nd high-yield corporte bonds ws lso incresed The sub-dvisor selectively reduced eposure to investment-grde corporte bonds s their spreds tightened In the Corporte Credit component of the Pool, eposure to long-durtion bonds, which underperformed, detrcted modertely from performnce Slight individul detrctors included Clerstrem Energy Services Inc (1000%, 0/0/), convertible bond tht declined on stock price wekness InPower BC Generl Prtnership (%, 0/0/1) nd Loblw Cos Ltd (90%, 0/01/1) were negtively ffected by higher yields The component s reltively shorter durtion contributed significntly to performnce The component ws fully invested in corporte bonds, which contributed significntly s corporte bonds outperformed Security selection lso contributed Individul contributors included Bombrdier Inc (0%, 0/0/1), Postmedi Network Inc (%, 01/0/1) nd Sobey s Inc (%, 00/0/0) Recovery in Bombrdier s business resulted in price increse, which contributed modertely to performnce Similrly, Sobey s business benefited from the cquisition of Sfewy, nd the security contributed slightly The structure nd high coupon of the Postmedi bond lso contributed slightly Cnso dded new mple bond holdings (bonds from foreign issuers denominted in Cndin dollrs) to diversify the component, nmely Anheuser-Busch InBev Finnce Inc (0%, 0/0/1), Apple Inc (1%, 0/0/19), AT&T Inc (%, 0/0/) nd PepsiCo Inc (1%, 0/0/) The eisting holdings in Bombrdier Inc (%, 0/1/) nd Sobeys Inc (%, 00/0/0) were incresed t ttrctive levels Yellow Pges Digitl & Medi Solutions Ltd (9%, 01/11/0) ws decresed s the issuer is prtilly pying down the bonds

3 Renissnce Cndin Fied Income Privte Pool Recent Developments Effective April, 01, the composition of the Independent Review Committee (IRC) chnged Tim Kennish nd Willim Thornhill resigned s members of the IRC nd Susn Silm nd Bryn Houston were ppointed s members of the IRC Effective September 1, 01, the minimum investment mount in respect of Premium Clss, Premium-T Clss, Premium-T Clss, Clss F-Premium, Clss F-Premium T, Clss F-Premium T, Clss N-Premium, Clss N-Premium T, nd Clss N-Premium T units of the Pool ws reduced from $10,000 to $100,000 Relted Prty Trnsctions CIBC nd its ffilites hve the following roles nd responsibilities with respect to the Pool, nd receive the fees described below in connection with their roles nd responsibilities Mnger, Trustee, nd Portfolio Advisor of the Pool CAMI, wholly-owned subsidiry of CIBC, is the Pool's Mnger, Trustee, nd Portfolio Advisor CAMI receives mngement fees with respect to the Pool's dy-to-dy business nd opertions, clculted bsed on the net sset vlue of ech respective clss of units of the Pool s described in Mngement Fees As Trustee, CAMI holds title to the Pool's property (csh nd securities) on behlf of its unitholders As Portfolio Advisor, CAMI provides, or rrnges to provide, investment dvice nd portfolio mngement services to the Pool CAMI lso compenstes delers in connection with their mrketing ctivities regrding the Pool From time to time, CAMI my provide seed cpitl to the Pool Distributor Clss A units of the Pool my be purchsed only through CIBC Wood Gundy, division of CIBC World Mrkets Inc (CIBC WM) Other clsses of units of the Pool my be purchsed through delers nd other firms, including CIBC's relted delers such s the CIBC Investor's Edge discount brokerge division of CIBC Investor Services Inc (CIBC ISI), the CIBC Imperil Service division of CIBC ISI, nd CIBC WM CIBC ISI nd CIBC WM re wholly-owned subsidiries of CIBC CAMI my py sles commissions nd triling commissions to the delers in connection with the sle of units of the Pool These delers nd other firms my py portion of these sles commissions nd triling commissions to their dvisors who sell units of the Pool to investors Brokerge Arrngements nd Soft Dollrs The Portfolio Advisor mkes decisions, including the selection of mrkets nd delers nd the negotition of commissions, with respect to the purchse nd sle of portfolio securities, certin derivtive products nd the eecution of portfolio trnsctions Brokerge business my be llocted by the Portfolio Advisor to CIBC WM nd CIBC World Mrkets Corp, ech subsidiry of CIBC CIBC WM nd CIBC World Mrkets Corp my lso ern spreds on the sle of fied income securities, other securities, nd certin derivtive products to the Pool A spred is the difference between the bid nd sk prices for security in the pplicble mrketplce, with respect to the eecution of portfolio trnsctions The spred will differ bsed upon vrious fctors such s the nture nd liquidity of the security Delers, including CIBC WM nd CIBC World Mrkets Corp, my furnish goods nd services, other thn order eecution, when CAMI processes trdes through them (referred to in the industry s soft-dollr rrngements) These goods nd services re pid for with portion of brokerge commissions nd ssist CAMI with investment decision-mking services for the Pool or relte directly to the eecution of portfolio trnsctions on behlf of the Pool The fees nd spreds for services of the Custodin directly relted to the eecution of portfolio trnsctions by the Pool re pid by CAMI nd/or deler(s) directed by CAMI, up to the mount of the credits generted under soft dollr rrngements from trding on behlf of the Pool during tht month In ddition, CAMI my enter into commission recpture rrngements with certin delers with respect to the Pool Any commission recptured will be pid to the Pool During the period, the Pool did not py ny brokerge commissions or other fees to CIBC WM or CIBC World Mrkets Corp Spreds ssocited with fied income nd other securities re not scertinble nd, for tht reson, cnnot be included when determining these mounts Pool Trnsctions The Pool my enter into one or more of the following trnsctions (the Relted Prty Trnsctions) in relince on the stnding instructions issued by the Independent Review Committee (IRC): l l l l l l invest in or hold equity securities of CIBC or issuers relted to portfolio sub-dvisor; invest in or hold non-echnge-trded debt securities of CIBC or n issuer relted to CIBC in primry offering nd in the secondry mrket; mke n investment in the securities of issuers for which CIBC WM, CIBC World Mrkets Corp, or ny ffilite of CIBC ( Relted Deler) cts s n underwriter during the offering of such securities t ny time during the 0-dy period following the completion of the offering of such securities (in the cse of privte plcement offering, in ccordnce with the eemptive relief order grnted by the Cndin securities regultory uthorities nd in ccordnce with the policies nd procedures relting to such investment); purchse equity or debt securities from or sell them to Relted Deler, where it is cting s principl; undertke currency nd currency derivtive trnsctions where Relted Deler is the counterprty; nd purchse securities from or sell securities to nother investment fund or mnged ccount mnged by the Mnger or n ffilite of the Mnger At lest nnully, the IRC reviews the Relted Prty Trnsctions for which they hve issued stnding instructions t lest nnully The

4 Renissnce Cndin Fied Income Privte Pool IRC is required to dvise the Cndin securities regultory uthorities, fter mtter hs been referred to or reported to it by the Mnger, if it determines tht n investment decision ws not mde in ccordnce with conditions imposed by securities legisltion or the IRC in ny Relted Prty Trnsctions requiring its pprovl Custodin CIBC Mellon Trust Compny is the custodin of the Pool (the Custodin) The Custodin holds ll csh nd securities for the Pool nd ensures tht those ssets re kept seprte from ny other csh or securities tht the custodin might be holding The Custodin lso provides other services to the Pool including record-keeping nd processing foreign echnge trnsctions The fees nd spreds for services of the Custodin directly relted to the eecution of portfolio trnsctions by the Pool re pid by CAMI nd/or deler(s) directed by CAMI, up to the mount of the credits generted under soft dollr rrngements from trding on behlf of the Pool during tht month All other fees nd spreds for the services of the Custodin re pid by the Mnger nd chrged to the Pool on recoverble bsis CIBC owns 0% interest in the Custodin Service Provider CIBC Mellon Globl Securities Services Compny (CIBC GSS) provides certin services to the Pool, including securities lending, fund ccounting nd reporting, nd portfolio vlution Such servicing fees re pid by the Mnger nd chrged to the Pool on recoverble bsis CIBC indirectly owns 0% interest in CIBC GSS

5 Renissnce Cndin Fied Income Privte Pool Finncil Highlights The following tbles show selected key finncil informtion bout the Pool nd re intended to help you understnd the Pool s finncil performnce for the period ended August 1 The Pool's Net Assets per Unit¹ - Clss A Units Net Assets, beginning of period $ 10 $ 111 $ 11 $ 11 $ 119 Increse (decrese) from opertions: Totl revenue $ 0 $ 01 $ 01 $ 0 $ 00 Totl epenses (00) (0) (0) (0) (0) Relized gins (losses) for the period Unrelized gins (losses) for the period (0) 01 (01) 00 (0) Totl increse (decrese) from opertions $ (0) $ 01 $ 01 $ 0 $ (009) Distributions: From income (ecluding dividends) $ 01 $ 01 $ 01 $ 019 $ 0 From dividends From cpitl gins Return of cpitl 001 Totl Distributions $ 0 $ 0 $ 00 $ 00 $ 01 Net Assets, end of period $ 119 $ 10 $ 111 $ 11 $ 11 1 This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Previously, the Pool prepred its finncil sttements in ccordnce with Cndin Generlly Accepted Accounting Principles (GAAP) s defined in Prt V of the CPA Cnd Hndbook Under Cndin GAAP, the Pool mesured fir vlues of its investments in ccordnce with CICA Hndbook Section which required the use of bid prices for long positions nd sk prices for short positions As such, the net ssets per unit figure presented in the finncil sttements my differ from the net sset vlue clculted for fund pricing purposes An eplntion of these differences cn be found in the notes to the finncil sttements issued prior to September 1, 01 Upon doption of IFRS, the Pool mesures the fir vlue of its investments by using the close mrket prices, where the close mrket price flls within the bid-sk spred As such, the Pool's ccounting policies for mesuring the fir vlue of investments in the finncil sttements re consistent with those used in mesuring the net sset vlue for trnsctions with unitholders Accordingly, the opening net sset figure s t September 1, 01 reflects the djusted mount in ccordnce with IFRS All figures presented for periods prior to September 1, 01 were prepred in ccordnce with Cndin GAAP Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Clss A Units Totl Net Asset Vlue (000s) $,0 $ 0, $, $,1 $ 9, Number of Units Outstnding,,0,00,0,0,91,,,1,11 Mngement Epense Rtio 19% 19% 19% 19% 19% Mngement Epense Rtio before wivers or bsorptions 1% % 0% % 0% Trding Epense Rtio 000% 000% 00% 000% 000% Portfolio Turnover Rte 101% 1% 99% 01% % Net Asset Vlue per Unit $ 119 $ 10 $ 111 $ 11 $ 11 This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund

6 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Premium Clss Units Net Assets, beginning of period $ 10 $ 1000 b Increse (decrese) from opertions: Totl revenue $ 01 $ 009 Totl epenses (011) (00) Relized gins (losses) for the period Unrelized gins (losses) for the period (0) 010 Totl increse (decrese) from opertions $ (01) $ 0 Distributions: From income (ecluding dividends) $ 01 $ 00 From dividends From cpitl gins 01 Return of cpitl Totl Distributions $ 0 $ 00 Net Assets, end of period $ 9 $ 10 Informtion presented is for the period from My 1, 01 to August 1, 01 b Initil offering price 1 This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Premium Clss Units Totl Net Asset Vlue (000s) $ 90 $ Number of Units Outstnding 0,0,1 Mngement Epense Rtio 11% 11%* Mngement Epense Rtio before wivers or bsorptions 1% 11%* Trding Epense Rtio 000% 000% Portfolio Turnover Rte 101% 1% Net Asset Vlue per Unit $ 9 $ 10 Informtion presented is for the period from My 1, 01 to August 1, 01 * Rtio hs been nnulized This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund

7 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Premium-T Clss Units Net Assets, beginning of period $ 1011 $ 1000 b Increse (decrese) from opertions: Totl revenue $ 09 $ 00 Totl epenses (011) (00) Relized gins (losses) for the period Unrelized gins (losses) for the period (0) 01 Totl increse (decrese) from opertions $ (00) $ 00 Distributions: From income (ecluding dividends) $ 09 $ 010 From dividends From cpitl gins 0 Return of cpitl Totl Distributions $ 0 $ 010 Net Assets, end of period $ 91 $ 1011 Informtion presented is for the period from My 1, 01 to August 1, 01 b Initil offering price 1 This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Premium-T Clss Units Totl Net Asset Vlue (000s) $ $ Number of Units Outstnding 0,09 1 Mngement Epense Rtio 11% 11%* Mngement Epense Rtio before wivers or bsorptions 1% 11%* Trding Epense Rtio 000% 000% Portfolio Turnover Rte 101% 1% Net Asset Vlue per Unit $ 91 $ 1011 Informtion presented is for the period from My 1, 01 to August 1, 01 * Rtio hs been nnulized This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund

8 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Premium-T Clss Units Net Assets, beginning of period $ 100 $ 1000 b Increse (decrese) from opertions: Totl revenue $ 00 $ 00 Totl epenses (010) (00) Relized gins (losses) for the period Unrelized gins (losses) for the period (0) 01 Totl increse (decrese) from opertions $ (01) $ 00 Distributions: From income (ecluding dividends) $ 0 $ 01 From dividends From cpitl gins 01 Return of cpitl Totl Distributions $ 0 $ 01 Net Assets, end of period $ 91 $ 100 Informtion presented is for the period from My 1, 01 to August 1, 01 b Initil offering price 1 This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Premium-T Clss Units Totl Net Asset Vlue (000s) $ $ Number of Units Outstnding 1 1 Mngement Epense Rtio 11% 11%* Mngement Epense Rtio before wivers or bsorptions 11% 11%* Trding Epense Rtio 000% 000% Portfolio Turnover Rte 101% 1% Net Asset Vlue per Unit $ 91 $ 100 Informtion presented is for the period from My 1, 01 to August 1, 01 * Rtio hs been nnulized This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund

9 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Clss C Units Net Assets, beginning of period $ 10 $ 109 $ 10 $ 100 $ 109 Increse (decrese) from opertions: Totl revenue $ 01 $ 0 $ 019 $ 0 $ 0 Totl epenses (010) (010) (010) (010) (010) Relized gins (losses) for the period Unrelized gins (losses) for the period (09) 01 (01) 0 (01) Totl increse (decrese) from opertions $ (01) $ 0 $ 0 $ 0 $ 001 Distributions: From income (ecluding dividends) $ 01 $ 0 $ 0 $ 0 $ 01 From dividends From cpitl gins Return of cpitl Totl Distributions $ 09 $ 0 $ 0 $ 0 $ 0 Net Assets, end of period $ 10 $ 10 $ 109 $ 10 $ This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Previously, the Pool prepred its finncil sttements in ccordnce with Cndin Generlly Accepted Accounting Principles (GAAP) s defined in Prt V of the CPA Cnd Hndbook Under Cndin GAAP, the Pool mesured fir vlues of its investments in ccordnce with CICA Hndbook Section which required the use of bid prices for long positions nd sk prices for short positions As such, the net ssets per unit figure presented in the finncil sttements my differ from the net sset vlue clculted for fund pricing purposes An eplntion of these differences cn be found in the notes to the finncil sttements issued prior to September 1, 01 Upon doption of IFRS, the Pool mesures the fir vlue of its investments by using the close mrket prices, where the close mrket price flls within the bid-sk spred As such, the Pool's ccounting policies for mesuring the fir vlue of investments in the finncil sttements re consistent with those used in mesuring the net sset vlue for trnsctions with unitholders Accordingly, the opening net sset figure s t September 1, 01 reflects the djusted mount in ccordnce with IFRS All figures presented for periods prior to September 1, 01 were prepred in ccordnce with Cndin GAAP Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Clss C Units Totl Net Asset Vlue (000s) $ 1,99 $ 1,11 $ 1,1 $ 0, $, Number of Units Outstnding 1,01,1 1,99,9 1,,19 1,9,,,1 Mngement Epense Rtio 09% 09% 09% 09% 09% Mngement Epense Rtio before wivers or bsorptions 1% 1% 1% 1% 11% Trding Epense Rtio 000% 000% 00% 000% 000% Portfolio Turnover Rte 101% 1% 99% 01% % Net Asset Vlue per Unit $ 10 $ 10 $ 109 $ 10 $ 100 This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund 9

10 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Clss I Units Net Assets, beginning of period $ 10 $ 10 $ 109 $ 101 $ 10 Increse (decrese) from opertions: Totl revenue $ 0 $ 0 $ 019 $ 0 $ 0 Totl epenses (00) (00) (00) (00) (00) Relized gins (losses) for the period Unrelized gins (losses) for the period (00) 00 (009) 0 (0) Totl increse (decrese) from opertions $ 00 $ 00 $ 0 $ 09 $ 01 Distributions: From income (ecluding dividends) $ 0 $ 09 $ 0 $ 0 $ 0 From dividends From cpitl gins Return of cpitl Totl Distributions $ 0 $ 01 $ 0 $ 0 $ 01 Net Assets, end of period $ 10 $ 10 $ 10 $ 109 $ This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Previously, the Pool prepred its finncil sttements in ccordnce with Cndin Generlly Accepted Accounting Principles (GAAP) s defined in Prt V of the CPA Cnd Hndbook Under Cndin GAAP, the Pool mesured fir vlues of its investments in ccordnce with CICA Hndbook Section which required the use of bid prices for long positions nd sk prices for short positions As such, the net ssets per unit figure presented in the finncil sttements my differ from the net sset vlue clculted for fund pricing purposes An eplntion of these differences cn be found in the notes to the finncil sttements issued prior to September 1, 01 Upon doption of IFRS, the Pool mesures the fir vlue of its investments by using the close mrket prices, where the close mrket price flls within the bid-sk spred As such, the Pool's ccounting policies for mesuring the fir vlue of investments in the finncil sttements re consistent with those used in mesuring the net sset vlue for trnsctions with unitholders Accordingly, the opening net sset figure s t September 1, 01 reflects the djusted mount in ccordnce with IFRS All figures presented for periods prior to September 1, 01 were prepred in ccordnce with Cndin GAAP Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Clss I Units Totl Net Asset Vlue (000s) $ 1, $ 11,10 $, $ 1,1 $ 0 Number of Units Outstnding 1,,0 1,0,90 11,9 11,10 1, Mngement Epense Rtio 0% 0% 09% 0% 09% Mngement Epense Rtio before wivers or bsorptions 0% 0% 0% 00% 01% Trding Epense Rtio 000% 000% 00% 000% 000% Portfolio Turnover Rte 101% 1% 99% 01% % Net Asset Vlue per Unit $ 10 $ 10 $ 10 $ 109 $ 101 This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund 10

11 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Clss F-Premium Units Net Assets, beginning of period $ 101 $ 1000 b Increse (decrese) from opertions: Totl revenue $ 01 $ 00 Totl epenses (00) (001) Relized gins (losses) for the period Unrelized gins (losses) for the period (11) 01 Totl increse (decrese) from opertions $ (09) $ 01 Distributions: From income (ecluding dividends) $ 00 $ 00 From dividends From cpitl gins 01 Return of cpitl Totl Distributions $ 0 $ 00 Net Assets, end of period $ 9 $ 101 Informtion presented is for the period from My 1, 01 to August 1, 01 b Initil offering price 1 This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Clss F-Premium Units Totl Net Asset Vlue (000s) $ 0 $ Number of Units Outstnding,0 1 Mngement Epense Rtio 0% 0%* Mngement Epense Rtio before wivers or bsorptions 0% 0%* Trding Epense Rtio 000% 000% Portfolio Turnover Rte 101% 1% Net Asset Vlue per Unit $ 9 $ 101 Informtion presented is for the period from My 1, 01 to August 1, 01 * Rtio hs been nnulized This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund 11

12 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Clss F-Premium T Units Net Assets, beginning of period $ 1011 $ 1000 b Increse (decrese) from opertions: Totl revenue $ 00 $ 00 Totl epenses (00) (00) Relized gins (losses) for the period Unrelized gins (losses) for the period (0) 01 Totl increse (decrese) from opertions $ (0) $ 00 Distributions: From income (ecluding dividends) $ 01 $ 010 From dividends From cpitl gins 0 Return of cpitl Totl Distributions $ 0 $ 010 Net Assets, end of period $ 9 $ 1011 Informtion presented is for the period from My 1, 01 to August 1, 01 b Initil offering price 1 This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Clss F-Premium T Units Totl Net Asset Vlue (000s) $ $ Number of Units Outstnding 1 1 Mngement Epense Rtio 00% 0%* Mngement Epense Rtio before wivers or bsorptions 0% 0%* Trding Epense Rtio 000% 000% Portfolio Turnover Rte 101% 1% Net Asset Vlue per Unit $ 9 $ 1011 Informtion presented is for the period from My 1, 01 to August 1, 01 * Rtio hs been nnulized This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund 1

13 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Clss F-Premium T Units Net Assets, beginning of period $ 100 $ 1000 b Increse (decrese) from opertions: Totl revenue $ 00 $ 00 Totl epenses (00) (001) Relized gins (losses) for the period Unrelized gins (losses) for the period (0) 01 Totl increse (decrese) from opertions $ (0) $ 01 Distributions: From income (ecluding dividends) $ 0 $ 01 From dividends From cpitl gins 00 Return of cpitl Totl Distributions $ 0 $ 01 Net Assets, end of period $ 9 $ 100 Informtion presented is for the period from My 1, 01 to August 1, 01 b Initil offering price 1 This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Clss F-Premium T Units Totl Net Asset Vlue (000s) $ $ Number of Units Outstnding 1 1 Mngement Epense Rtio 00% 0%* Mngement Epense Rtio before wivers or bsorptions 0% 0%* Trding Epense Rtio 000% 000% Portfolio Turnover Rte 101% 1% Net Asset Vlue per Unit $ 9 $ 100 Informtion presented is for the period from My 1, 01 to August 1, 01 * Rtio hs been nnulized This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund 1

14 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Clss N-Premium Units Net Assets, beginning of period $ 101 $ 1000 b Increse (decrese) from opertions: Totl revenue $ 00 $ 00 Totl epenses (00) (001) Relized gins (losses) for the period Unrelized gins (losses) for the period (0) 01 Totl increse (decrese) from opertions $ (0) $ 01 Distributions: From income (ecluding dividends) $ 01 $ 00 From dividends From cpitl gins 01 Return of cpitl Totl Distributions $ 0 $ 00 Net Assets, end of period $ 9 $ 101 Informtion presented is for the period from My 1, 01 to August 1, 01 b Initil offering price 1 This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Clss N-Premium Units Totl Net Asset Vlue (000s) $ $ Number of Units Outstnding 1 1 Mngement Epense Rtio 00% 0%* Mngement Epense Rtio before wivers or bsorptions 0% 0%* Trding Epense Rtio 000% 000% Portfolio Turnover Rte 101% 1% Net Asset Vlue per Unit $ 9 $ 101 Informtion presented is for the period from My 1, 01 to August 1, 01 * Rtio hs been nnulized This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund 1

15 Renissnce Cndin Fied Income Privte Pool The Pool's Net Assets per Unit¹ - Clss N-Premium T Units Net Assets, beginning of period $ 101 $ 1000 b Increse (decrese) from opertions: Totl revenue $ 00 $ 00 Totl epenses (00) (001) Relized gins (losses) for the period Unrelized gins (losses) for the period (0) 01 Totl increse (decrese) from opertions $ (0) $ 01 Distributions: From income (ecluding dividends) $ 0 $ 010 From dividends From cpitl gins 0 Return of cpitl Totl Distributions $ 0 $ 010 Net Assets, end of period $ 9 $ 101 Informtion presented is for the period from My 1, 01 to August 1, 01 b Initil offering price 1 This informtion is derived from the Pool's udited nnul finncil sttements The Pool dopted IFRS on September 1, 01 Net ssets nd distributions re bsed on the ctul number of units outstnding t the relevnt time The totl increse (decrese) from opertions is bsed on the weighted verge number of units outstnding during the period Distributions were pid in csh, reinvested in dditionl units of the Pool, or both Rtios nd Supplementl Dt - Clss N-Premium T Units Totl Net Asset Vlue (000s) $ $ Number of Units Outstnding 1 1 Mngement Epense Rtio 00% 0%* Mngement Epense Rtio before wivers or bsorptions 0% 0%* Trding Epense Rtio 000% 000% Portfolio Turnover Rte 101% 1% Net Asset Vlue per Unit $ 9 $ 101 Informtion presented is for the period from My 1, 01 to August 1, 01 * Rtio hs been nnulized This informtion is presented s t August 1 of the period(s) shown Mngement epense rtio is bsed on the totl epenses of the fund (ecluding commissions nd other portfolio trnsction costs), incurred by or llocted to clss of units for the period shown, epressed s n nnulized percentge of the dily verge net sset vlue of tht clss during the period The decision to wive nd/or bsorb mngement fees nd operting epenses is t the discretion of the Mnger The prctice of wiving nd/or bsorbing mngement fees nd operting epenses my continue indefinitely or my be terminted t ny time without notice to unitholders The trding epense rtio represents totl commissions nd other portfolio trnsction costs before income tes epressed s n nnulized percentge of the dily verge net sset vlue during the period Spreds ssocited with fied income securities trding re not scertinble nd, for tht reson, re not included in the trding epense rtio clcultion The portfolio turnover rte indictes how ctively the portfolio dvisor nd/or portfolio sub-dvisor mnges the portfolio investmentsa portfolio turnover rte of 100% is equivlent to fund buying nd selling ll of the securities in its portfolio once in the course of the period The higher portfolio turnover rte in period, the greter the trding costs pyble by fund in the period, nd the greter the chnce of n investor receiving tble cpitl gins in the yer There is not necessrily reltionship between high turnover rte nd the performnce of fund 1