Renaissance Global Bond Fund. Annual Management Report of Fund Performance

Transcription

1 Renaissance Global Bond Fund Annual Management Report of Fund Performance for the financial year ended August 31, 2017 All figures are reported in Canadian dollars unless otherwise noted This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements of the investment fund If you have not received a copy of the annual financial statements with this annual management report of fund performance, you can get a copy of the annual financial statements at your request, and at no cost, by calling us toll-free at FUND (3863), by writing to us at Renaissance Investments, 1500 Robert-Bourassa Boulevard, Suite 800, Montreal, QC, H3A 3S6, by visiting the SEDAR website at sedarcom, or by visiting renaissanceinvestmentsca Unitholders may also contact us using one of these methods to request a copy of the investment fund s proy voting policies and procedures, proy voting disclosure record, or quarterly portfolio disclosure Management Discussion of Fund Performance Investment Objective and Strategies Investment Objective: Renaissance Global Bond Fund (the Fund) seeks to preserve capital and provide income and long-term growth, primarily through investment in debt securities denominated in foreign currencies and issued by Canadian or non-canadian governments, corporations, and financial institutions Investment Strategies: The Fund is positioned with respect to country allocation, currency allocation, average term-to-maturity, term structure, and sector allocation The basis on which these decisions are made comes from the portfolio sub-advisor s review of global macroeconomic and capital market conditions The Fund s currency strategy is designed to manage the currency/country eposure to protect principal and increase returns Risk The Fund is a global fied income fund that is suitable for medium- to long-term investors who can tolerate low to medium investment risk For the period ended August 31, 2017, the Fund s overall level of risk remains as discussed in the simplified prospectus Results of Operations The portfolio sub-advisor of the Fund is Brandywine Global Investment Management, LLC (the sub-advisor) The commentary that follows provides a summary of the results of operations for the period ended August 31, 2017 All dollar figures are epressed in thousands, unless otherwise indicated The Fund's net asset value increased by 2% during the period, from $536,929 as at August 31, 2016 to $549,475 as at August 31, 2017 Net sales of $2,313 and positive investment performance resulted in an overall increase in net asset value Class A units of the Fund posted a return of 11% for the period The Fund s benchmark, the Citigroup World Government Bond Inde (the benchmark), returned -53% for the same period The Fund s return is after the deduction of fees and epenses, unlike the benchmark's return See Past Performance for the returns of other classes of units offered by the Fund US dollar weakness and the US Federal Reserve Board setting the stage for gradual interest-rate increases supported emerging markets assets and currencies such as the Meican peso, Indonesian government bonds, South African rand and both Brazilian government bonds and the real The outcome of the US presidential election in November 2016 resulted in one of the most event-driven months in several years Currency volatility was especially pronounced in the fourth quarter of 2016 The Fund s overall bond and currency positioning contributed to performance Significant overweight eposure to outperforming emerging markets currencies, including those of Meico, Indonesia, Brazil and South Africa, significantly contributed to the Fund s performance Significant overweight eposure to longer-duration local currency bonds in emerging markets such as Indonesia and Brazil moderately contributed to performance, as these bonds outperformed The Fund s significant underweight eposure to the US dollar relative to the benchmark significantly contributed to performance The sub-advisor has found more value in investing in the European periphery and emerging markets The Fund s significant underweight eposure to the Japanese yen also significantly contributed to performance as the yen depreciated after the Bank of Japan addressed dismantling its unconventional policies at its June meeting The Fund s moderate overweight allocation to Brazilian local currency bonds moderately contributed to performance Although Brazilian assets declined in May when the president was implicated in a corruption investigation, this was offset by solid performance in the first quarter as investors searched for higher-yielding assets The Fund s moderate overweight eposure to the British pound moderately detracted from performance as the pound depreciated

2 Renaissance Global Bond Fund Uncertainty surrounding several key European elections put downward pressure on the pound The sub-advisor made several adjustments to the Fund's currency eposures during the period The Fund's eposure to the Japanese yen was increased by approimately 5% early in the period, based on the sub-advisor's view that government policies may finally be having a positive economic impact Consumer confidence rose to its highest level since 2013, and wage gains have been relatively strong Improving leading economic indicators, stronger Purchasing Managers Inde reports, an increase in machine orders and higher capacity utilization have suggested a positive impact from the weaker yen The sub-advisor also added Canadian eposure via a Canadian dollar forward contract, reducing eposure to the US dollar at the same time A stronger global growth outlook, especially in the US, led the Bank of Canada to indicate the possibility of interest-rate increases, which may provide some support for the Canadian dollar A 4% eposure to Turkey was added through a currency forward contract and government bonds The sub-advisor believes that Turkey may benefit as its central bank is focused on reducing inflation, its eports have grown, its currency has strengthened from January lows, and tourism has rebounded The sub-advisor swapped Hungarian government bonds for Polish government bonds, as the sub-advisor believes Poland has a better economic backdrop and a central bank more likely to address an increase in inflation In addition, the sub-advisor believes that Polish bonds offer a real yield premium to Hungarian bonds The Fund s eposure to the Chilean peso was eliminated as it approached fair value according to the sub-advisor s short-term economic model The Chilean economy has slowed dramatically from its peak growth in 2011, partially in response to lower copper prices and the subsequent decline in copper production Recent Developments Effective April 27, 2017, the composition of the Independent Review Committee (IRC) changed Tim Kennish and William Thornhill resigned as members of the IRC and Susan Silma and Bryan Houston were appointed as members of the IRC Effective September 1, 2017, Premium Class and Class F-Premium units of the Fund were closed to purchases Effective September 1, 2017, the annual management fee payable was reduced from 175% to 150% in respect of Class A units of the Fund, and from 100% to 075% in respect of Class F units of the Fund Related Party Transactions CIBC and its affiliates have the following roles and responsibilities with respect to the Fund, and receive the fees described below in connection with their roles and responsibilities Manager, Trustee, and Portfolio Advisor of the Fund CAMI, a wholly-owned subsidiary of CIBC, is the Fund's Manager, Trustee, and Portfolio Advisor CAMI receives management fees with respect to the Fund's day-to-day business and operations, calculated based on the net asset value of each respective class of units of the Fund as described in Management Fees As Trustee, CAMI holds title to the Fund's property (cash and securities) on behalf of its unitholders As Portfolio Advisor, CAMI provides, or arranges to provide, investment advice and portfolio management services to the Fund CAMI also compensates dealers in connection with their marketing activities regarding the Fund From time to time, CAMI may provide seed capital to the Fund Distributor Dealers and other firms sell units of the Fund to investors These dealers and other firms include CIBC s related dealers such as the CIBC Investor s Edge discount brokerage division of CIBC Investor Services Inc (CIBC ISI), the CIBC Imperial Service division of CIBC ISI, and the CIBC Wood Gundy division of CIBC World Markets Inc (CIBC WM) CIBC ISI and CIBC WM are wholly-owned subsidiaries of CIBC CAMI may pay sales commissions and trailing commissions to these dealers and firms in connection with the sale of units of the Fund These dealers and other firms may pay a portion of these sales commissions and trailing commissions to their advisors who sell units of the Fund to investors Brokerage Arrangements and Soft Dollars The Portfolio Advisor makes decisions, including the selection of markets and dealers and the negotiation of commissions, with respect to the purchase and sale of portfolio securities, and the eecution of portfolio transactions Brokerage business may be allocated by the Portfolio Advisor to CIBC WM and CIBC World Markets Corp, each a subsidiary of CIBC CIBC WM and CIBC World Markets Corp may also earn spreads on the sale of fied income securities and other securities to the Fund A spread is the difference between the bid and ask prices for a security in the applicable marketplace, with respect to the eecution of portfolio transactions The spread will differ based upon various factors such as the nature and liquidity of the security Dealers, including CIBC WM and CIBC World Markets Corp, may furnish goods and services, other than order eecution, when CAMI processes trades through them (referred to in the industry as soft-dollar arrangements) These goods and services are paid for with a portion of brokerage commissions and assist CAMI with investment decision-making services for the Fund or relate directly to the eecution of portfolio transactions on behalf of the Fund The fees and spreads for services of the Custodian directly related to the eecution of portfolio transactions by the Fund are paid by CAMI and/or dealer(s) directed by CAMI, up to the amount of the credits generated under soft dollar arrangements from trading on behalf of the Fund during that month 2

3 Renaissance Global Bond Fund In addition, the Manager may enter into commission recapture arrangements with certain dealers with respect to the Fund Any commission recaptured will be paid to the Fund During the period, the Fund did not pay any brokerage commissions or other fees to CIBC WM or CIBC World Markets Corp Spreads associated with fied income and other securities are not ascertainable and, for that reason, cannot be included when determining these amounts Fund Transactions The Fund may enter into one or more of the following transactions (the Related Party Transactions) in reliance on the standing instructions issued by the Independent Review Committee (IRC): l l l l l invest in or hold equity securities of CIBC or issuers related to a portfolio sub-advisor; invest in or hold non-echange-traded debt securities of CIBC or an issuer related to CIBC in a primary offering and in the secondary market; make an investment in the securities of an issuer for which CIBC WM, CIBC World Markets Corp, or any affiliate of CIBC (a Related Dealer) acts as an underwriter during the offering of the securities at any time during the 60-day period following the completion of the offering of such securities (in the case of a private placement offering, in accordance with the eemptive relief order granted by the Canadian securities regulatory authorities and in accordance with the policies and procedures relating to such investment); purchase equity or debt securities from or sell them to a Related Dealer, where it is acting as principal; and purchase securities from or sell securities to another investment fund or a managed account managed by the Manager or an affiliate of the Manager At least annually, the IRC reviews the Related Party Transactions for which they have issued standing instructions The IRC is required to advise the Canadian securities regulatory authorities, after a matter has been referred to or reported to it by the Manager, if it determines that an investment decision was not made in accordance with conditions imposed by securities legislation or the IRC in any Related Party Transactions requiring its approval Custodian CIBC Mellon Trust Company is the custodian of the Fund (the Custodian) The Custodian holds all cash and securities for the Fund and ensures that those assets are kept separate from any other cash or securities that the custodian might be holding The Custodian also provides other services to the Fund including record-keeping and processing of foreign echange transactions The fees and spreads for services of the Custodian directly related to the eecution of portfolio transactions by the Fund are paid by CAMI and/or dealer(s) directed by CAMI, up to the amount of the credits generated under soft dollar arrangements from trading on behalf of the Fund during that month All other fees and spreads for the services of the Custodian are paid by the Manager and charged to the Fund on a recoverable basis CIBC owns a 50% interest in the Custodian Service Provider CIBC Mellon Global Securities Services Company (CIBC GSS) provides certain services to the Fund, including securities lending, fund accounting and reporting, and portfolio valuation Such servicing fees are paid by the Manager and charged to the Fund on a recoverable basis CIBC indirectly owns a 50% interest in CIBC GSS 3

4 Renaissance Global Bond Fund Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the period ended August 31 The Fund's Net Assets per Unit¹ - Class A Units Net Assets, beginning of period $ 562 $ 545 $ 507 $ 469 $ 454 Increase (decrease) from operations: Total revenue $ 031 $ 016 $ 019 $ 010 $ 017 Total epenses (012) (012) (011) (010) (010) Realized gains (losses) for the period Unrealized gains (losses) for the period (036) (009) Total increase (decrease) from operations 2 $ (002) $ 031 $ 041 $ 040 $ 015 Distributions: From income (ecluding dividends) $ 008 $ 005 $ 004 $ 004 $ 005 From dividends From capital gains Return of capital Total Distributions 3 $ 026 $ 016 $ 005 $ 004 $ 005 Net Assets, end of period $ 540 $ 562 $ 545 $ 507 $ This information is derived from the Fund's audited annual financial statements The Fund adopted IFRS on September 1, 2014 Previously, the Fund prepared its financial statements in accordance with Canadian Generally Accepted Accounting Principles (GAAP) as defined in Part V of the CPA Canada Handbook Under Canadian GAAP, the Fund measured fair values of its investments in accordance with CICA Handbook Section 3855 which required the use of bid prices for long positions and ask prices for short positions As such, the net assets per unit figure presented in the financial statements may differ from the net asset value calculated for fund pricing purposes An eplanation of these differences can be found in the notes to the financial statements issued prior to September 1, 2014 Upon adoption of IFRS, the Fund measures the fair value of its investments by using the close market prices, where the close market price falls within the bid-ask spread As such, the Fund's accounting policies for measuring the fair value of investments in the financial statements are consistent with those used in measuring the net asset value for transactions with unitholders Accordingly, the opening net asset figure as at September 1, 2013 reflects the adjusted amount in accordance with IFRS All figures presented for periods prior to September 1, 2013 were prepared in accordance with Canadian GAAP 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time The total increase (decrease) from operations is based on the weighted average number of units outstanding during the period 3 Distributions were paid in cash, reinvested in additional units of the Fund, or both Ratios and Supplemental Data - Class A Units Total Net Asset Value (000s) 4 $ 63,080 $ 78,931 $ 37,882 $ 22,003 $ 15,981 Number of Units Outstanding 4 11,677,387 14,056,167 6,946,679 4,342,586 3,406,092 Management Epense Ratio 5 208% 206% 208% 207% 206% Management Epense Ratio before waivers or absorptions 6 227% 226% 227% 230% 232% Trading Epense Ratio 7 000% 000% 000% 000% 000% Portfolio Turnover Rate % 5547% 4958% 11702% 9027% Net Asset Value per Unit $ 540 $ 562 $ 545 $ 507 $ This information is presented as at August 31 of the period(s) shown 5 Management epense ratio is based on the total epenses of the fund (ecluding commissions and other portfolio transaction costs), incurred by or allocated to a class of units for the period shown, epressed as an annualized percentage of the daily average net asset value of that class during the period 6 The decision to waive and/or absorb management fees and operating epenses is at the discretion of the Manager The practice of waiving and/or absorbing management fees and operating epenses may continue indefinitely or may be terminated at any time without notice to unitholders 7 The trading epense ratio represents total commissions and other portfolio transaction costs before income taes epressed as an annualized percentage of the daily average net asset value during the period Spreads associated with fied income securities trading are not ascertainable and, for that reason, are not included in the trading epense ratio calculation 8 The portfolio turnover rate indicates how actively the portfolio advisor and/or portfolio sub-advisor manages the portfolio investmentsa portfolio turnover rate of 100% is equivalent to a fund buying and selling all of the securities in its portfolio once in the course of the period The higher a portfolio turnover rate in a period, the greater the trading costs payable by a fund in the period, and the greater the chance of an investor receiving taable capital gains in the year There is not necessarily a relationship between a high turnover rate and the performance of a fund 4

5 Renaissance Global Bond Fund The Fund's Net Assets per Unit¹ - Premium Class Units a Net Assets, beginning of period $ 1103 $ 1082 $ 1005 $ 1000 b Increase (decrease) from operations: Total revenue $ 063 $ 032 $ 038 $ 005 Total epenses (014) (015) (014) (003) Realized gains (losses) for the period Unrealized gains (losses) for the period (060) Total increase (decrease) from operations 2 $ 019 $ 071 $ 101 $ 033 Distributions: From income (ecluding dividends) $ 023 $ 016 $ 017 $ 007 From dividends From capital gains Return of capital Total Distributions 3 $ 060 $ 051 $ 017 $ 007 Net Assets, end of period $ 1061 $ 1103 $ 1082 $ 1005 a Information presented is for the period from June 4, 2014 to August 31, 2014 b Initial offering price 1 This information is derived from the Fund's audited annual financial statements The Fund adopted IFRS on September 1, 2014 Previously, the Fund prepared its financial statements in accordance with Canadian Generally Accepted Accounting Principles (GAAP) as defined in Part V of the CPA Canada Handbook Under Canadian GAAP, the Fund measured fair values of its investments in accordance with CICA Handbook Section 3855 which required the use of bid prices for long positions and ask prices for short positions As such, the net assets per unit figure presented in the financial statements may differ from the net asset value calculated for fund pricing purposes An eplanation of these differences can be found in the notes to the financial statements issued prior to September 1, 2014 Upon adoption of IFRS, the Fund measures the fair value of its investments by using the close market prices, where the close market price falls within the bid-ask spread As such, the Fund's accounting policies for measuring the fair value of investments in the financial statements are consistent with those used in measuring the net asset value for transactions with unitholders Accordingly, the opening net asset figure as at September 1, 2013 reflects the adjusted amount in accordance with IFRS All figures presented for periods prior to September 1, 2013 were prepared in accordance with Canadian GAAP 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time The total increase (decrease) from operations is based on the weighted average number of units outstanding during the period 3 Distributions were paid in cash, reinvested in additional units of the Fund, or both Ratios and Supplemental Data - Premium Class Units a Total Net Asset Value (000s) 4 $ 21,637 $ 23,795 $ 16,519 $ 5,998 Number of Units Outstanding 4 2,038,633 2,156,965 1,526, ,542 Management Epense Ratio 5 132% 133% 134% 127%* Management Epense Ratio before waivers or absorptions 6 148% 161% 151% 151%* Trading Epense Ratio 7 000% 000% 000% 000% Portfolio Turnover Rate % 5547% 4958% 11702% Net Asset Value per Unit $ 1061 $ 1103 $ 1082 $ 1005 a Information presented is for the period from June 4, 2014 to August 31, 2014 * Ratio has been annualized 4 This information is presented as at August 31 of the period(s) shown 5 Management epense ratio is based on the total epenses of the fund (ecluding commissions and other portfolio transaction costs), incurred by or allocated to a class of units for the period shown, epressed as an annualized percentage of the daily average net asset value of that class during the period 6 The decision to waive and/or absorb management fees and operating epenses is at the discretion of the Manager The practice of waiving and/or absorbing management fees and operating epenses may continue indefinitely or may be terminated at any time without notice to unitholders 7 The trading epense ratio represents total commissions and other portfolio transaction costs before income taes epressed as an annualized percentage of the daily average net asset value during the period Spreads associated with fied income securities trading are not ascertainable and, for that reason, are not included in the trading epense ratio calculation 8 The portfolio turnover rate indicates how actively the portfolio advisor and/or portfolio sub-advisor manages the portfolio investmentsa portfolio turnover rate of 100% is equivalent to a fund buying and selling all of the securities in its portfolio once in the course of the period The higher a portfolio turnover rate in a period, the greater the trading costs payable by a fund in the period, and the greater the chance of an investor receiving taable capital gains in the year There is not necessarily a relationship between a high turnover rate and the performance of a fund 5

6 Renaissance Global Bond Fund The Fund's Net Assets per Unit¹ - Class F Units Net Assets, beginning of period $ 1240 $ 1214 $ 1133 $ 1047 $ 1014 Increase (decrease) from operations: Total revenue $ 072 $ 035 $ 045 $ 022 $ 043 Total epenses (015) (015) (015) (013) (012) Realized gains (losses) for the period Unrealized gains (losses) for the period (076) 011 (017) 042 (063) Total increase (decrease) from operations 2 $ 015 $ 079 $ 066 $ 094 $ (007) Distributions: From income (ecluding dividends) $ 029 $ 021 $ 022 $ 017 $ 020 From dividends From capital gains Return of capital Total Distributions 3 $ 069 $ 057 $ 027 $ 017 $ 020 Net Assets, end of period $ 1192 $ 1240 $ 1214 $ 1133 $ This information is derived from the Fund's audited annual financial statements The Fund adopted IFRS on September 1, 2014 Previously, the Fund prepared its financial statements in accordance with Canadian Generally Accepted Accounting Principles (GAAP) as defined in Part V of the CPA Canada Handbook Under Canadian GAAP, the Fund measured fair values of its investments in accordance with CICA Handbook Section 3855 which required the use of bid prices for long positions and ask prices for short positions As such, the net assets per unit figure presented in the financial statements may differ from the net asset value calculated for fund pricing purposes An eplanation of these differences can be found in the notes to the financial statements issued prior to September 1, 2014 Upon adoption of IFRS, the Fund measures the fair value of its investments by using the close market prices, where the close market price falls within the bid-ask spread As such, the Fund's accounting policies for measuring the fair value of investments in the financial statements are consistent with those used in measuring the net asset value for transactions with unitholders Accordingly, the opening net asset figure as at September 1, 2013 reflects the adjusted amount in accordance with IFRS All figures presented for periods prior to September 1, 2013 were prepared in accordance with Canadian GAAP 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time The total increase (decrease) from operations is based on the weighted average number of units outstanding during the period 3 Distributions were paid in cash, reinvested in additional units of the Fund, or both Ratios and Supplemental Data - Class F Units Total Net Asset Value (000s) 4 $ 68,421 $ 65,138 $ 19,871 $ 1,742 $ 720 Number of Units Outstanding 4 5,737,737 5,251,728 1,636, ,691 68,718 Management Epense Ratio 5 121% 120% 118% 116% 114% Management Epense Ratio before waivers or absorptions 6 136% 133% 131% 124% 126% Trading Epense Ratio 7 000% 000% 000% 000% 000% Portfolio Turnover Rate % 5547% 4958% 11702% 9027% Net Asset Value per Unit $ 1192 $ 1240 $ 1214 $ 1133 $ This information is presented as at August 31 of the period(s) shown 5 Management epense ratio is based on the total epenses of the fund (ecluding commissions and other portfolio transaction costs), incurred by or allocated to a class of units for the period shown, epressed as an annualized percentage of the daily average net asset value of that class during the period 6 The decision to waive and/or absorb management fees and operating epenses is at the discretion of the Manager The practice of waiving and/or absorbing management fees and operating epenses may continue indefinitely or may be terminated at any time without notice to unitholders 7 The trading epense ratio represents total commissions and other portfolio transaction costs before income taes epressed as an annualized percentage of the daily average net asset value during the period Spreads associated with fied income securities trading are not ascertainable and, for that reason, are not included in the trading epense ratio calculation 8 The portfolio turnover rate indicates how actively the portfolio advisor and/or portfolio sub-advisor manages the portfolio investmentsa portfolio turnover rate of 100% is equivalent to a fund buying and selling all of the securities in its portfolio once in the course of the period The higher a portfolio turnover rate in a period, the greater the trading costs payable by a fund in the period, and the greater the chance of an investor receiving taable capital gains in the year There is not necessarily a relationship between a high turnover rate and the performance of a fund 6

7 Renaissance Global Bond Fund The Fund's Net Assets per Unit¹ - Class F-Premium Units a Net Assets, beginning of period $ 1129 $ 1080 $ 1009 $ 1000 b Increase (decrease) from operations: Total revenue $ 065 $ 032 $ 038 $ 009 Total epenses (010) (010) (010) (004) Realized gains (losses) for the period Unrealized gains (losses) for the period (065) Total increase (decrease) from operations 2 $ 021 $ 077 $ 112 $ 024 Distributions: From income (ecluding dividends) $ 031 $ 022 $ 020 $ 014 From dividends From capital gains Return of capital Total Distributions 3 $ 067 $ 029 $ 028 $ 014 Net Assets, end of period $ 1085 $ 1129 $ 1080 $ 1009 a Information presented is for the period from March 18, 2014 to August 31, 2014 b Initial offering price 1 This information is derived from the Fund's audited annual financial statements The Fund adopted IFRS on September 1, 2014 Previously, the Fund prepared its financial statements in accordance with Canadian Generally Accepted Accounting Principles (GAAP) as defined in Part V of the CPA Canada Handbook Under Canadian GAAP, the Fund measured fair values of its investments in accordance with CICA Handbook Section 3855 which required the use of bid prices for long positions and ask prices for short positions As such, the net assets per unit figure presented in the financial statements may differ from the net asset value calculated for fund pricing purposes An eplanation of these differences can be found in the notes to the financial statements issued prior to September 1, 2014 Upon adoption of IFRS, the Fund measures the fair value of its investments by using the close market prices, where the close market price falls within the bid-ask spread As such, the Fund's accounting policies for measuring the fair value of investments in the financial statements are consistent with those used in measuring the net asset value for transactions with unitholders Accordingly, the opening net asset figure as at September 1, 2013 reflects the adjusted amount in accordance with IFRS All figures presented for periods prior to September 1, 2013 were prepared in accordance with Canadian GAAP 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time The total increase (decrease) from operations is based on the weighted average number of units outstanding during the period 3 Distributions were paid in cash, reinvested in additional units of the Fund, or both Ratios and Supplemental Data - Class F-Premium Units a Total Net Asset Value (000s) 4 $ 41,141 $ 38,267 $ 14,735 $ 5,744 Number of Units Outstanding 4 3,792,417 3,390,524 1,364, ,486 Management Epense Ratio 5 084% 084% 085% 084%* Management Epense Ratio before waivers or absorptions 6 095% 095% 096% 090%* Trading Epense Ratio 7 000% 000% 000% 000% Portfolio Turnover Rate % 5547% 4958% 11702% Net Asset Value per Unit $ 1085 $ 1129 $ 1080 $ 1009 a Information presented is for the period from March 18, 2014 to August 31, 2014 * Ratio has been annualized 4 This information is presented as at August 31 of the period(s) shown 5 Management epense ratio is based on the total epenses of the fund (ecluding commissions and other portfolio transaction costs), incurred by or allocated to a class of units for the period shown, epressed as an annualized percentage of the daily average net asset value of that class during the period 6 The decision to waive and/or absorb management fees and operating epenses is at the discretion of the Manager The practice of waiving and/or absorbing management fees and operating epenses may continue indefinitely or may be terminated at any time without notice to unitholders 7 The trading epense ratio represents total commissions and other portfolio transaction costs before income taes epressed as an annualized percentage of the daily average net asset value during the period Spreads associated with fied income securities trading are not ascertainable and, for that reason, are not included in the trading epense ratio calculation 8 The portfolio turnover rate indicates how actively the portfolio advisor and/or portfolio sub-advisor manages the portfolio investmentsa portfolio turnover rate of 100% is equivalent to a fund buying and selling all of the securities in its portfolio once in the course of the period The higher a portfolio turnover rate in a period, the greater the trading costs payable by a fund in the period, and the greater the chance of an investor receiving taable capital gains in the year There is not necessarily a relationship between a high turnover rate and the performance of a fund 7

8 Renaissance Global Bond Fund The Fund's Net Assets per Unit¹ - Class O Units Net Assets, beginning of period $ 574 $ 565 $ 529 $ 488 $ 471 Increase (decrease) from operations: Total revenue $ 034 $ 016 $ 019 $ 011 $ 018 Total epenses Realized gains (losses) for the period Unrealized gains (losses) for the period (031) (010) Total increase (decrease) from operations 2 $ 019 $ 045 $ 054 $ 054 $ 026 Distributions: From income (ecluding dividends) $ 020 $ 016 $ 015 $ 013 $ 014 From dividends From capital gains Return of capital Total Distributions 3 $ 039 $ 036 $ 020 $ 013 $ 014 Net Assets, end of period $ 552 $ 574 $ 565 $ 529 $ This information is derived from the Fund's audited annual financial statements The Fund adopted IFRS on September 1, 2014 Previously, the Fund prepared its financial statements in accordance with Canadian Generally Accepted Accounting Principles (GAAP) as defined in Part V of the CPA Canada Handbook Under Canadian GAAP, the Fund measured fair values of its investments in accordance with CICA Handbook Section 3855 which required the use of bid prices for long positions and ask prices for short positions As such, the net assets per unit figure presented in the financial statements may differ from the net asset value calculated for fund pricing purposes An eplanation of these differences can be found in the notes to the financial statements issued prior to September 1, 2014 Upon adoption of IFRS, the Fund measures the fair value of its investments by using the close market prices, where the close market price falls within the bid-ask spread As such, the Fund's accounting policies for measuring the fair value of investments in the financial statements are consistent with those used in measuring the net asset value for transactions with unitholders Accordingly, the opening net asset figure as at September 1, 2013 reflects the adjusted amount in accordance with IFRS All figures presented for periods prior to September 1, 2013 were prepared in accordance with Canadian GAAP 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time The total increase (decrease) from operations is based on the weighted average number of units outstanding during the period 3 Distributions were paid in cash, reinvested in additional units of the Fund, or both Ratios and Supplemental Data - Class O Units Total Net Asset Value (000s) 4 $ 355,196 $ 330,798 $ 329,943 $ 253,400 $ 191,138 Number of Units Outstanding 4 64,336,732 57,612,545 58,390,653 47,923,320 39,182,625 Management Epense Ratio 5 000% 000% 000% 000% 000% Management Epense Ratio before waivers or absorptions 6 000% 000% 001% 002% 002% Trading Epense Ratio 7 000% 000% 000% 000% 000% Portfolio Turnover Rate % 5547% 4958% 11702% 9027% Net Asset Value per Unit $ 552 $ 574 $ 565 $ 529 $ This information is presented as at August 31 of the period(s) shown 5 Management epense ratio is based on the total epenses of the fund (ecluding commissions and other portfolio transaction costs), incurred by or allocated to a class of units for the period shown, epressed as an annualized percentage of the daily average net asset value of that class during the period 6 The decision to waive and/or absorb management fees and operating epenses is at the discretion of the Manager The practice of waiving and/or absorbing management fees and operating epenses may continue indefinitely or may be terminated at any time without notice to unitholders 7 The trading epense ratio represents total commissions and other portfolio transaction costs before income taes epressed as an annualized percentage of the daily average net asset value during the period Spreads associated with fied income securities trading are not ascertainable and, for that reason, are not included in the trading epense ratio calculation 8 The portfolio turnover rate indicates how actively the portfolio advisor and/or portfolio sub-advisor manages the portfolio investmentsa portfolio turnover rate of 100% is equivalent to a fund buying and selling all of the securities in its portfolio once in the course of the period The higher a portfolio turnover rate in a period, the greater the trading costs payable by a fund in the period, and the greater the chance of an investor receiving taable capital gains in the year There is not necessarily a relationship between a high turnover rate and the performance of a fund 8

9 Renaissance Global Bond Fund Management Fees The Fund pays CAMI an annual management fee to cover the costs of managing the Fund Management fees are based on the net asset value of the Fund and are calculated daily and paid monthly Management fees are paid to CAMI in consideration for providing, or arranging for the provision of, management, distribution, and portfolio advisory services Advertising and promotional epenses, office overhead epenses, and trailing commissions are paid by CAMI out of the management fees received from the Fund The Fund is required to pay applicable taes on the management fees paid to CAMI Refer to the simplified prospectus for the annual management fee rate for each class of units For Class O units, the management fee is negotiated with and paid by, or as directed by, unitholders or dealers and discretionary managers on behalf of unitholders Such Class O management fee will not eceed the Class A unit management fee rate The following table shows a breakdown of the services received in consideration of the management fees, as a percentage of the management fees collected from the Fund for the period ended August 31, 2017 These amounts do not include waived fees or absorbed epenses Class A Units Premium Class Units Class F Units Class F-Premium Units Sales and trailing commissions paid to dealers 3776% 4418% 000% 000% General administration, investment advice, and profit 6224% 5582% 10000% 10000% Past Performance The performance data provided assumes reinvestment of distributions only and does not take into account sales, redemption, distribution, or other optional charges payable by any unitholder that would have reduced returns Past performance does not necessarily indicate how a fund will perform in the future The Fund s returns are after the deduction of fees and epenses, and the difference in returns between classes of units is primarily due to differences in the management epense ratio See Financial Highlights for the management epense ratio Year-by-Year Returns These bar charts show the annual performance of each class of units of the Fund for each of the periods shown, and illustrate how the performance has changed from period to period These bar charts show, in percentage terms, how an investment made on September 1 would have increased or decreased by August 31, unless otherwise indicated Class A Units 12% 9% 6% 53% 71% 73% 49% 43% 89% 87% 60% 3% 0% 14% % 9

10 Renaissance Global Bond Fund Premium Class Units 12% 9% 6% 95% 68% 3% 13% 19% 0% 14 a a 2014 return is for the period from June 4, 2014 to August 31, 2014 Class F Units 12% 99% 97% 9% 6% 61% 79% 82% 57% 52% 70% 3% 22% 20% 0% Class F-Premium Units 12% 9% 6% 100% 73% 3% 23% 24% 0% 14 a a 2014 return is for the period from March 18, 2014 to August 31,

11 Renaissance Global Bond Fund Class O Units 20% 15% 10% 73% 92% 94% 71% 65% 112% 110% 82% 5% 35% 32% 0% Annual Compound Returns This table shows the annual compound return of each class of units of the Fund for each indicated period ended on August 31, 2017 The annual compound return is also compared to the Fund s benchmark The Fund s benchmark is the Citigroup World Government Bond Inde 1 Year 3 Years 5 Years 10 Years* or Since Inception* Inception Date Class A units 11% 52% 58% 55% October 21, 1992 Citigroup World Government Bond Inde -53% 50% 49% 51% Premium Class units 19% 60% 60% June 4, 2014 Citigroup World Government Bond Inde -53% 50% 47% Class F units 20% 62% 67% 64% August 22, 2007 Citigroup World Government Bond Inde -53% 50% 49% 51% Class F-Premium units 24% 65% 63% March 18, 2014 Citigroup World Government Bond Inde -53% 50% 43% Class O units 32% 74% 80% 76% July 13, 2005 Citigroup World Government Bond Inde -53% 50% 49% 51% * If a class of units has been outstanding for less than 10 years, the annual compound return since inception is shown Citigroup World Government Bond Inde is intended to represent the global government bond market Currently it consists of fied interest securities (bonds) issued by governments in various developed countries A discussion of the Fund's relative performance compared to its benchmark can be found in Results of Operations 11

12 Renaissance Global Bond Fund Summary of Investment Portfolio (as at August 31, 2017) The summary of investment portfolio may change due to ongoing portfolio transactions of the investment fund A quarterly update is available by visiting renaissanceinvestmentsca The Top Positions table shows a fund s 25 largest positions For funds with fewer than 25 positions in total, all positions are shown % of Net Asset Portfolio Breakdown Value United States Dollar 478 Meican Peso 106 Polish Zloty 60 British Pound 56 Australian Dollar 55 Malaysian Ringgit 54 Other Bonds 50 Brazilian Real 48 Indonesian Rupiah 43 Cash 43 Forward & Spot Contracts 09 Other Assets, less Liabilities -02 % of Net Asset Top Positions Value United Meican States, Series 'M', 775%, 2042/11/13 73 United States Treasury Bond, Floating Rate, 109%, 2019/04/30 66 United States Treasury Bond, Variable Rate, 113%, 2019/07/31 59 United Kingdom Treasury Bond, 125%, 2018/07/22 56 United States Treasury Bond, Floating Rate, 121%, 2019/01/31 48 United States Treasury Bond, 288%, 2046/11/15 47 Cash 43 Republic of Indonesia, Series 'FR71', 900%, 2029/03/15 38 Republic of Poland, Series '0725', 325%, 2025/07/25 35 United Meican States, Series 'M30', 850%, 2038/11/18 33 New South Wales Treasury Corp, 500%, 2024/08/20 25 Federative Republic of Brazil, Series 'F', 1000%, 2027/01/01 25 Federative Republic of Brazil, Series 'F', 1000%, 2025/01/01 24 United States Treasury Bond, Floating Rate, 069%, 2018/10/31 20 Goldman Sachs Group Inc (The), Variable Rate, 242%, 2018/11/15 20 Republic of South Africa, Series 'R214', 650%, 2041/02/28 20 General Motors Financial Co Inc, Floating Rate, 223%, 2020/04/13 18 Republic of Poland, Series '0726', 250%, 2026/07/25 18 NBCUniversal Enterprise Inc, Floating Rate, 170%, 2021/04/01 18 Government of Malaysia, Series '0314', 405%, 2021/09/30 17 Apple Inc, Callable, 465%, 2046/02/23 16 Queensland Treasury Corp, Series '25', 475%, 2025/07/21 16 Queensland Treasury Corp, Series '26', 325%, 2026/07/21 14 Wells Fargo & Co, Floating Rate, 234%, 2021/07/26 13 Nederlandse Waterschapsbank NV, Variable Rate, 154%, 2018/02/

13 A note on Forward-looking Statements The management report of fund performance may contain forward-looking statements 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 epects, anticipates, intends, plans, believes, estimates, or other similar wording In addition, any statements that may be made concerning future performance, strategies, or prospects and possible future actions taken by the fund, are also forward-looking statements Forward-looking statements are not guarantees of future performance These statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results and achievements of the fund to differ materially from those epressed or implied by such statements Such factors include, but are not limited to: general economic, market, and business conditions; fluctuations in securities prices, interest rates, and foreign currency echange rates; changes in government regulations; and catastrophic events The above list of important factors that may affect future results is not ehaustive Before making any investment decisions, we encourage you to consider these and other factors carefully CIBC Asset Management Inc does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise prior to the release of the net management report of fund performance

14 Renaissance Investments 1500 Robert-Bourassa Boulevard, Suite 800 Montreal, Quebec H3A 3S FUND (3863) Website renaissanceinvestmentsca CIBC Asset Management Inc, the manager and trustee of the Renaissance Investments family of funds, is a wholly-owned subsidiary of Canadian Imperial Bank of Commerce Please read the Renaissance Investments family of funds and Aiom Portfolios simplified prospectus before investing To obtain a copy of the simplified prospectus, call FUND (3863), us at info@renaissanceinvestmentsca, or ask your advisor Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc 02317E (201708)