Select 40i60e Managed Portfolio. Portfolio Review First Quarter 2018

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1 Select 40i60e Managed Portfolio Portfolio Review First Quarter 2018 Q1

2 Portfolio Review First Quarter 2018 as at March 31, 2018 Portfolio Performance (Class F) 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years 10 Years Since Inception (November 2006) -0.6% -1.2% 1.6% 2.7% 3.1% 7.1% 5.8% 4.7% Asset Allocation Overview and Activity Different types of investments will respond differently to the markets, reinforcing the importance of a multi-level diversification strategy. A balanced asset mix ensures that investors are not dependent on any one asset class or security type to provide returns. CI Multi-Asset Management combines its portfolio construction expertise with ongoing comprehensive research and recommendations from State Street Global Advisors, a world leader in asset allocation, to create portfolios designed to capture evolving opportunities in the various asset classes. This report is designed to provide you with an up-to-date portfolio overview of the Select 40i60e Managed Portfolio, including the allocations across asset class, geographic region, equity sector and market capitalization. The arrows indicate whether the allocation for each category has increased or decreased since the previous quarter-end. Asset Class Geographic Regions 22.0% 17.1% 16.1% 16.0% 12.5% 7.1% 3.8% 3.4% 2.0% U.S. equity Foreign bond Canadian bond Canadian equity European equity Cash Asian equity Emerging markets equity Other equity 32.2% 32.1% 16.3% 5.2% 4.1% 3.5% 1.9% 1.8% 1.6% 1.3% U.S. Canada Cash and other countries Emerging markets Japan U.K. France Switzerland Germany Bermuda Equity Market Cap Equity Industry Sector 84.5% 13.2% 2.3% Large-cap Mid-cap Small-cap 21.7% 12.8% 11.2% 10.1% 9.6% 9.4% 8.9% 8.3% 4.0% 2.2% 1.8% Financial services Information technology Industrials Consumer discretionary Materials Consumer staples Health care Energy Utilities Telecommunication services Real estate 22 Portfolio Select Series

3 Portfolio Review First Quarter 2018 as at March 31, 2018 Underlying Fund Allocations CI Income Fund 36.3% Select U.S. Equity Managed Fund 20.8% Select International Equity Managed Fund 19.4% Select Canadian Equity Managed Fund 17.8% Signature Global Bond Fund 4.7% Cash 1.0% Top Ten Holdings Canada Gov t Bond 1% 01Jun27 2.0% SPDR Gold Trust 1.4% ishares 20+ Yr Treasury Bond ETF 1.2% Toronto-Dominion Bank 1.0% Royal Bank of Canada 0.8% Canadian Natural Resources Ltd. 0.7% Bank of Nova Scotia 0.7% Japan Gov t Five Year Bond 0.1% 20Dec22 0.7% Ontario Province 3.5% 02Jun24 0.6% Ontario Province 2.4% 02Jun26 0.6% Portfolio Select Series 23

4 Portfolio Review First Quarter 2018 as at March 31, 2018 Portfolio Commentary The portfolio declined 1.2% during the quarter, matching its benchmark (40% FTSE TMX Canada Universe Bond Index, 24% S&P/TSX Composite Index, 18% MSCI World Index C$, 18% MSCI World Index local currency). The international equity pool added relative value. Diversified exposure to global listed real estate, infrastructure and dividend-paying equities detracted from relative performance, while positions in global bonds, the U.S. dollar and gold made positive contributions. The portfolio s overall asset allocation made a positive contribution, due largely to an underweight position in Canadian equities. Global equity markets soared in January, continuing 2017 s gains. In early February, however, market volatility suddenly 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. 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 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 24 Portfolio Select Series

5 Portfolio Review First Quarter 2018 as at March 31, 2018 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 cyclical and interest rate sensitive sectors, such as energy and telecommunications services. 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. Select Canadian Equity Managed Fund underperformed the Canadian equity market. The fund has underweight allocations to the resources and financials sectors, and overweight positions in other areas such as utilities, information technology and consumer staples positioning that we believe enhances risk-adjusted return potential. Our holdings in the real estate and industrials sectors detracted from value. 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. Select International Equity Managed Fund outperformed the broader international equity markets. Our holdings in financials and health care added 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. The international equity portion had overweight allocations 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 Select U.S. Equity Managed Fund underperformed the broader U.S. market. The portfolio has overweight allocations to the materials and financials sectors, and underweight positions in other areas such as consumer discretionary and health care. Our holdings in consumer discretionary and information technology detracted from relative value. Portfolio Select Series 25

6 Portfolio Management Teams In the Portfolio Select Series program 38 Portfolio Select Series Portfolio Select Series 38

7 For more information on Portfolio Select Series, please contact your CI Sales Representative or visit All commentaries are published by CI Investments Inc., 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, CI Investments Inc. 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. Please read the prospectus before investing. Unless otherwise indicated and except for returns for periods less than one year, the indicated rates of return are the historical annual compounded total returns including changes in security value. All performance data assume reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. CI Investments, the CI Investments design, Harbour Advisors, Harbour Funds and Cambridge are registered trademarks of CI Investments Inc. Portfolio Select Series, Signature Funds, Signature Global Asset Management and CI Multi-Asset Management are trademarks of CI Investments Inc. First Asset is a trademark of First Asset Capital Corp., a wholly owned subsidiary of CI Financial Corp 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. All Rights Reserved. Published April Queen Street East, Twentieth Floor, Toronto, Ontario M5C 3G7 I Head Office / Toronto Calgary Montreal Vancouver Client Services _E (04/18)