sample Advisor letterhead June 30, 2004 John Doe 1234 Yonge Street Toronto, Ontario M4T 3R5 RE: CI Portfolio Series Investment Policy Statement

Transcription

1 Advisor letterhead June 30, 2004 John Doe 1234 Yonge Street Toronto, Ontario M4T 3R5 RE: CI Portfolio Series Investment Policy Statement Dear John, I am pleased to provide you with your CI Global Balanced Portfolio Investment Policy Statement, which provides a framework to help you achieve your long-term investment goals at a level of risk suitable to you. Based on the information you provided me through the questionnaire, I am recommending the CI Global Balanced Portfolio from the CI Portfolio Series. This portfolio offers a diversified asset mix that meets your investment goals, based on your short-term and long-term financial requirements, investment objectives, risk tolerance, investment knowledge and experience. As your financial circumstances change over time, we will need to review your asset mix to determine if it should be adjusted. This ensures that your portfolio will continue to reflect your risk tolerance and any needs for cash flow and liquidity. In addition to addressing your specific investment objectives, your Investment Policy Statement serves as a reference tool you can use to evaluate the progress of your investment portfolio. Adhering to your plan will help you maintain a disciplined approach and avoid adopting investment actions that are based on emotional reactions to market events. If you have any questions, please do not hesitate to contact me at (416) Sincerely, John Smith Financial Advisor

2 CI Portfolio Series Investment policy statement We will refer to your Investment Policy Statement often as your investments grow and evolve. The criteria listed here will be used to ensure that your portfolio continues to meet your requirements. Why CI Portfolio Series? CI Portfolio Series is intended to maximize your chances of reaching your investment goals. CI Portfolio Series was designed by CI Funds and Mercer Investment Consulting using the principles of strategic asset allocation and is based on the Nobel Prize-winning Modern Portfolio Theory, a time-tested investment process for optimizing a portfolio making the most return for a given level of risk. CI Portfolio Series is a sophisticated, yet simple, investment program and provides you with: 1. Portfolio Efficiency: Optimized to provide long-term performance Each portfolio is designed to maximize returns for a given level of risk using sophisticated portfolio optimization methods. All portfolios invest in a selected group of CI mutual funds through a fund-of-funds structure that ensures style neutrality relative to broad capital markets. A style-neutral portfolio mixes various types of investing styles such as growth, value and momentum to ensure that your portfolio will perform in all market conditions. 2. Multi-Level Diversification to guard your investment against short-term volatility A balanced asset mix ensures that investors are not dependent on any one asset class or security to provide returns. Your portfolio offers diversification across asset class, market capitalization, geographic regions, economic sectors, money managers and investment styles. 3. Professional Money Management Managers are selected for CI Portfolio Series based on their investment process, proven value added and fit into the overall strategy. All of the money managers in CI Portfolio Series employ proven, time-tested security selection and portfolio management processes and their styles are complementary by asset class. The goal in selecting active portfolio managers is to increase return and decrease volatility relative to the underlying broad market benchmarks. 2

3 Your Personal Investment Plan This Investment Policy Statement is a blueprint for your long-term investment strategy. We have determined that the CI Global Balanced Portfolio from the CI Portfolio Series provides the most suitable diversified asset allocation for achieving your investment goals. The determination is based on the information you provided during our discussion and the completion of the CI Portfolio Series Questionnaire. The main factors considered in making this decision include: Your personal and financial situation Your investment objective and risk tolerance (e.g. ability to accept temporary declines in value) Investment knowledge and experience through different market cycles. Your household s investable assets are $75,001 to $125,000 Your Investment Objective To achieve strong asset growth with modest income. You expect a 5% to 9% overall average return on your investment portfolio over the long term (+10 years), before tax but after inflation. Your Time Horizon You plan to invest these funds for 11 to 15 years before you begin withdrawing a substantial portion of the portfolio (e.g. a withdrawal of more than half). Your Risk Tolerance Given your financial goals, you are willing to assume medium to high volatility, such as negative returns in one of every five years. You could tolerate a temporary decline of 15% over a one-year period. The CI Global Balanced Portfolio is designed to be a medium-risk portfolio. Your Portfolio s Characteristics The CI Global Balanced Portfolio is designed to provide steady, long-term growth with capital preservation. 70% Equity The CI Global Balanced Portfolio provides diversified equity market exposure for steady capital appreciation through mostly large and mid-cap holdings. 30% Income The CI Global Balanced Portfolio includes a fixed-income component to reduce volatility and contribute to the growth of the portfolio. 3

4 The fund allocation is broken down as follows: Equity Independent asset managers with complementary investment styles are selected to help reduce risk and enhance returns relative to the broad markets. Fund Allocation Style Harbour Fund 4% Value Signature Select Canadian Fund 14% GARP (Growth at a reasonable price) CI Canadian Investment Fund 12% Value BPI American Equity Fund 8% Growth CI American Value Sector Fund 9% Value CI American Managers Sector Fund 5% Blend CI American Small Companies Fund 3% Value CI International Value Fund 5% Value CI International Fund 5% Growth BPI International Equity Fund 5% Growth Income Each manager has a separate investment mandate to search for the highest yield without incurring undue risk. Fund Allocation CI Canadian Bond Fund 15% Signature Corporate Bond Fund 10% CI Global Bond Fund 5% Automatic Portfolio Rebalancing Once you ve selected the appropriate asset mix, it is important that the portfolio be monitored to ensure that the asset mix does not change over time due to the performance of one or more of the components of the portfolio. To ensure that your portfolio remains invested at the asset mix you have chosen, CI will automatically rebalance it. This process: Reduces Risk Rebalancing lessens your portfolio s exposure to unforeseen events which may have a negative impact if, at that time, your asset mix does not reflect your risk tolerance. Protects Gains By selling a portion of the top-performing funds in your portfolio, rebalancing captures some of the gains you have made by essentially selling high and buying low. Reporting CI issues semi-annual client statements to keep you informed about the value of your CI Global Balanced Portfolio. Monitoring We will review your asset mix on a regular basis to ensure you remain on the right track to achieve your financial goals. 4

5 Mercer Investment Consulting, one of world s leading investment consulting firms, has worked with CI Funds in designing the CI Portfolio Series and selecting the managers. On a quarterly basis, Mercer reviews the portfolio funds to ensure that each of the funds within the portfolio follows its investment profile and continues to contribute to the portfolio s style-neutral bias. Liquidity Needs The key to achieving your financial goals is to stay the course and remain fully invested. Unscheduled withdrawals work against your investment plan and are not recommended. However, you can redeem units at any time by notifying me of your requirement. We will work to find a solution to meet your cash requirements while continuing to adhere to your investment plan. Review Process Please review the entire package and inform me of any misstatements so that I can submit a revised Investment Policy Statement to you. Your simplified prospectus provides additional essential details on your portfolio and I recommend you read it and let me know of any questions you may have. Acknowledgement It is important you acknowledge that: Your investment objectives are accurately reflected in this Investment Policy Statement; The selected portfolio accurately matches your investment objectives; If there is any change to your financial situation and/or investment objectives that you advise me; There is no guarantee of investment returns and that returns will fluctuate over time. What is left for you to do? 1. Retain this copy of your Investment Policy Statement for reference and periodic review. 2. Complete the enclosed application form with me. My Recommendation To achieve your investment objectives, I recommend that you: Invest (AMOUNT 1) in the CI Global Balanced Portfolio from the CI Portfolio Series and / or Contribute (AMOUNT 2) on a monthly basis to the CI Global Balanced Portfolio as a means of meeting your long-term financial goals and objectives. Investor Signature Date Advisor Signature Date 5