Investors Canadian Corporate Bond Fund

Transcription

1 Investors Canadian Corporate Bond Fund Annual Financial Report MARCH 31, 2018 Copyright Investors Group Inc Trademarks, including Investors Group, are owned by IGM Financial Inc. and licensed to its subsidiary corporations.

2 STATEMENTS OF FINANCIAL POSITION at March 31 (in $ 000 except per security amounts) STATEMENTS OF COMPREHENSIVE INCOME for the periods ended March 31 (in $ 000 except per security amounts) Assets Current assets: Non-derivative investments 1,639,887 1,459,028 Cash and cash equivalents 2,704 17,019 Accrued interest receivable 11,969 9,415 Dividends receivable - - Accounts receivable for investments sold 3,010 9,704 Accounts receivable for securities issued - - Accounts receivable from the Manager - 1 Margin on derivative contracts Derivative assets Other assets - - 1,658,824 1,495,167 Non-current assets: Taxes recoverable - - Other assets Total assets 1,658,824 1,495,167 Liabilities Current liabilities: Bank indebtedness - - Accounts payable for investments purchased 25,426 11,902 Accounts payable for securities redeemed 39 - Distributions payable - - Accrued expenses and miscellaneous payables 11 - Dividends payable on investments sold short - - Derivative liabilities Taxes payable - - Other liabilities - - Total liabilities 26,173 11,902 Net assets attributable to securityholders 1,632,651 1,483,265 a2018 b2017 Income: Gains (losses) on derivative and non-derivative investments: Dividends Interest income 46,982 39,357 Net realized gain (loss) (4,366) 7,723 Net unrealized gain (loss) (20,966) 3,105 Income (loss) from derivatives Income (loss) from short selling - - Other - - Net gain (loss) on derivative and non-derivative investments 22,535 50,435 Securities lending income - - Other - - Total income 22,535 50,435 Expenses: Management fees 1,710 1,845 Management fee rebates (8) (8) Service fees - - Service fee rebates - - Mortgage administration and service fees Administration fees Trustee fees Commissions and other portfolio transaction costs 9 - Independent Review Committee costs 5 7 Other 5 10 Expenses before amounts absorbed by Manager 1,901 2,087 Expenses absorbed by Manager (2) - Net expenses 1,899 2,087 Increase (decrease) in net assets attributable to securityholders from operations before tax 20,636 48,348 Foreign withholding taxes paid (recovered) - - Foreign income taxes paid (recovered) - - Income tax paid (recovered) - - Increase (decrease) in net assets attributable to securityholders from operations 20,636 48,348 Net assets attributable to securityholders per security per series Series A ,207 40,430 Series B ,227 14,915 Series C ,691 11,258 Series Jdsc ,722 34,548 Series Jnl ,486 9,155 Series P ,514,386 1,363,084 Series U ,932 9,875 1,632,651 1,483,265 Increase (decrease) in net assets attributable to securityholders from operations per security per series a2018 b2017 a2018 b2017 Series A (0.04) 0.21 (163) 852 Series B (0.04) 0.21 (70) 237 Series C (0.05) 0.22 (46) 231 Series Jdsc (0.01) 0.24 (44) 871 Series Jnl (0.02) 0.24 (43) 208 Series P ,825 45,702 Series U ,636 48,348 See accompanying notes.

3 STATEMENTS OF CHANGES IN FINANCIAL POSITION for the periods ended March 31 (in $ 000 except when stated) TOTAL SERIES A SERIES B SERIES C a2018 b2017 a2018 b2017 a2018 b2017 a2018 b2017 Net assets attributable to securityholders, beginning of period 1,483,265 1,178,624 40,430 41,199 14,915 11,617 11,258 12,252 Increase (decrease) in net assets attributable to securityholders resulting from: Operations 20,636 48,348 (163) 852 (70) 237 (46) 231 Distributions: Income (44,351) (37,340) (381) (514) (166) (144) (105) (138) Capital gains - (9,447) - (234) - (73) - (65) Return of capital Management fee rebates (8) (8) Service fee rebates Total distributions (44,359) (46,795) (381) (748) (166) (217) (105) (203) Security transactions: Proceeds from sale of securities 527, ,904 5,208 9,337 9,930 8,690 1,742 1,675 Proceeds from securities issued on merger Reinvested from distributions 44,346 46, Payment on redemption of securities (399,030) (282,591) (13,267) (10,957) (8,548) (5,628) (3,262) (2,900) Total security transactions 173, ,088 (7,679) (873) 1,548 3,278 (1,416) (1,022) Increase (decrease) in assets attributable to securityholders 149, ,641 (8,223) (769) 1,312 3,298 (1,567) (994) Net assets attributable to securityholders, end of period 1,632,651 1,483,265 32,207 40,430 16,227 14,915 9,691 11,258 Increase (decrease) in securities outstanding (in thousands): Securities outstanding, beginning of period 4,014 4,101 1,481 1,157 1,077 1,175 Add (deduct): Securities sold Securities issued on merger Reinvested from distributions Securities redeemed (1,326) (1,082) (854) (557) (314) (276) Securities outstanding, end of period 3,245 4,014 1,635 1, ,077 SERIES Jdsc SERIES Jnl SERIES P SERIES U a2018 b2017 a2018 b2017 a2018 b2017 a2018 b2017 Net assets attributable to securityholders, beginning of period 34,548 37,247 9,155 9,699 1,363,084 1,060,943 9,875 5,667 Increase (decrease) in net assets attributable to securityholders resulting from: Operations (44) 871 (43) ,825 45, Distributions: Income (417) (556) (123) (136) (42,708) (35,686) (451) (166) Capital gains - (216) - (56) - (8,760) - (43) Return of capital Management fee rebates (6) (7) (2) (1) Service fee rebates Total distributions (423) (779) (125) (193) (42,708) (44,446) (451) (209) Security transactions: Proceeds from sale of securities 6,309 8,853 6,753 5, , ,746 19,985 5,803 Proceeds from securities issued on merger Reinvested from distributions ,708 44, Payment on redemption of securities (13,090) (12,422) (7,379) (6,549) (347,389) (242,307) (6,095) (1,828) Total security transactions (6,359) (2,791) (501) (559) 173, ,885 14,331 4,170 Increase (decrease) in assets attributable to securityholders (6,826) (2,699) (669) (544) 151, ,141 14,057 4,208 Net assets attributable to securityholders, end of period 27,722 34,548 8,486 9,155 1,514,386 1,363,084 23,932 9,875 Increase (decrease) in securities outstanding (in thousands): Securities outstanding, beginning of period 3,426 3, , , Add (deduct): Securities sold ,951 48,318 1, Securities issued on merger Reinvested from distributions ,197 4, Securities redeemed (1,305) (1,230) (735) (648) (34,192) (23,473) (601) (177) Securities outstanding, end of period 2,790 3, , ,909 2, See accompanying notes.

4 STATEMENTS OF CASH FLOWS for the periods ended March 31 (in $ 000 except when stated) Cash flows from operating activities a2018 b2017 Increase (decrease) in net assets attributable to securityholders from operations 20,636 48,348 Less non-cash impact of: Net realized (gain) loss 4,366 (7,723) Change in net unrealized (gain) loss 20,966 (3,105) Distributions received from Underlying Funds (82) (190) Adjustments for: Proceeds from sale and maturity of investments 927, ,700 Purchases of investments (1,113,164) (1,082,480) (Increase) decrease in accounts receivable and other assets (3,434) (1,306) Increase (decrease) in accounts payable and other liabilities 11 (1) Net cash provided by (used in) operating activities (143,102) (247,757) Cash flows from financing activities: Proceeds from securities issued 512, ,089 Proceeds from securities issued on merger - - Payments on redemption of securities (383,924) (273,766) Distributions paid net of reinvestments (13) (20) Net cash provided by (used in) financing activities 128, ,303 Increase (decrease) in cash and cash equivalents (14,313) 8,546 Cash and cash equivalents at beginning of period 17,019 8,473 Effect of exchange rate fluctuations on cash and cash equivalents (2) - Cash and cash equivalents, end of period 2,704 17,019 Cash Cash equivalents 2,340 16,493 Bank indebtedness - - Supplementary disclosures on cash flow from operating activities: 2,704 17,019 Dividends received net of withholding taxes Interest received net of withholding taxes 44,428 38,052 Interest paid - - See accompanying notes.

5 SCHEDULE OF INVESTMENTS No. of Units, Fair Shares, or Cost Value Country Sector Par Value (CAD$ 000) (CAD$ 000) MORTGAGES Canada See Schedules 2 to 6 14,691,185 14,772 14,674 BONDS 407 International Inc. 4.99% Callable Canada Corporate 2,500,000 2,824 2, International Inc. 3.43% MTN Canada Corporate 2,500,000 2,498 2, International Inc. 4.19% Callable Canada Corporate 5,000,000 5,562 5, International Inc. 3.65% Callable MTN Canada Corporate 5,500,000 5,492 5, International Inc. 3.30% Callable 2044 MTN Canada Corporate 9,500,000 9,248 9, International Inc. 3.60% Callable Canada Corporate 7,500,000 7,492 7,597 Aeroports de Montreal 3.92% Canada Corporate 2,000,000 2,054 2,241 AECOM 5.13% Callable 2026 United States Corporate USD 390, AerCap Ireland Capital Designated Activity Co. 3.30% Callable 2022 Netherlands Corporate USD 1,770,000 2,194 2,222 AIMCo Realty Investors LP 2.27% Callable 2024 Canada Corporate 14,000,000 13,673 13,530 AIMCo Realty Investors LP 3.04% Callable 2028 Canada Corporate 1,780,000 1,780 1,769 Alectra Inc. 2.49% Callable 2027 Canada Corporate 5,000,000 4,794 4,838 Algonquin Power & Utilities Corp. 4.09% Callable Canada Corporate 2,760,000 2,820 2,833 Alibaba Group Holding Ltd. 3.40% Callable 2027 China Corporate USD 1,600,000 2,045 1,957 Allied Properties Real Estate Investment Trust 3.75% Series A Canada Corporate 1,400,000 1,400 1,422 Allied Properties Real Estate Investment Trust 3.93% Series B Canada Corporate 1,250,000 1,250 1,271 Allied Properties Real Estate Investment Trust 3.64% Callable 2025 Canada Corporate 6,600,000 6,600 6,450 AltaGas Ltd. 3.72% Callable Canada Corporate 2,350,000 2,509 2,407 AltaGas Ltd. 3.98% Callable 2027 Canada Corporate 300, AltaLink LP 3.67% MTN Canada Corporate 5,800,000 5,800 6,109 AltaLink LP 3.40% Callable 2024 Canada Corporate 7,600,000 8,136 7,883 AltaLink LP 4.46% Callable MTN Canada Corporate 4,000,000 4,000 4,607 AltaLink LP 3.99% Callable MTN Canada Corporate 3,000,000 3,281 3,224 AltaLink LP 4.05% Callable 2044 Canada Corporate 5,000,000 5,000 5,444 AltaLink LP 4.09% Callable MTN Canada Corporate 5,000,000 5,241 5,493 AMC Entertainment Holdings Inc. 5.88% Callable United States Corporate USD 1,440,000 1,728 1,829 Amneal Pharmaceuticals LLC Term loan B 1st Lien F/R United States Bank Loans USD 1,490,000 1,908 1,923 Anheuser-Busch InBev Finance Inc. 2.60% Callable 2024 Belgium Corporate 5,000,000 4,999 4,870 Aramark Services Inc. 4.75% Callable 2021 United States Corporate USD 1,890,000 2,387 2,362 ATS Consolidated Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 630, Avolon Holdings Funding Ltd. 5.50% Callable A Ireland Corporate USD 1,340,000 1,717 1,704 Bank of America Corp. 3.23% Series MPLE United States Corporate 1,040,000 1,054 1,055 Bank of America Corp. F/R Callable 2022 United States Corporate 2,960,000 2,960 2,924 Bank of America Corp. F/R Callable 2024 United States Corporate 1,430,000 1,463 1,439 Bank of Montreal 2.84% DPNT Canada Corporate 4,500,000 4,503 4,545 Bank of Montreal 1.88% DPNT Canada Corporate 11,000,000 11,040 10,799 Bank of Montreal 3.40% DPNT Canada Corporate 7,900,000 8,388 8,100 Bank of Montreal 1.61% DPNT Canada Corporate 23,860,000 23,511 23,065 Bank of Montreal 2.27% DPNT Canada Corporate 8,510,000 8,510 8,373 Bank of Montreal 2.70% DPNT Canada Corporate 20,630,000 20,563 20,454 Bank of Montreal 3.32% Canada Corporate 2,230,000 2,284 2,255 Bank of Montreal F/R Callable 2027 Canada Corporate USD 2,710,000 3,483 3,324 The Bank of Nova Scotia 2.13% DPNT Canada Corporate 26,110,000 26,070 25,957 The Bank of Nova Scotia 3.27% DPNT Canada Corporate 8,200,000 8,514 8,366 The Bank of Nova Scotia 1.83% Canada Corporate 25,000,000 24,470 24,193 The Bank of Nova Scotia 2.36% Canada Corporate 7,020,000 7,019 6,916 bcimc Realty Corp. 2.96% Canada Corporate 3,400,000 3,399 3,430 bcimc Realty Corp. 3.00% Callable 2026 Canada Corporate 3,120,000 3,098 3,115 Bell Canada 3.54% Canada Corporate 11,300,000 11,811 11,538 Bell Canada 3.15% Callable 2021 Canada Corporate 4,800,000 4,781 4,859 Bell Canada 3.00% Callable Canada Corporate 12,500,000 12,649 12,553 Bell Canada 3.35% Canada Corporate 6,000,000 6,074 6,099 Bell Canada 4.70% MTN Canada Corporate 5,000,000 4,995 5,400 Bell Canada 2.70% Callable Canada Corporate 17,000,000 16,900 16,611 Bell Canada 3.60% Callable MTN Canada Corporate 20,300,000 20,242 20,493 Bell Canada 4.35% Callable MTN Canada Corporate 5,300,000 5,568 5,354 Boardriders Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,860,000 2,350 2,372 Brookfield Asset Management Inc. 4.54% Canada Corporate 7,000,000 7,406 7,435 Brookfield Asset Management Inc. 4.82% Callable 2025 Canada Corporate 1,000,000 1,059 1,078 Brookfield Asset Management Inc. 3.80% Callable 2026 Canada Corporate 3,000,000 2,999 3,019 Brookfield Infrastructure Finance ULC 3.54% Reg S Canada Corporate 3,000,000 3,000 3,066 Brookfield Infrastructure Finance ULC 3.32% Callable 2023 Canada Corporate 10,000,000 10,063 9,966 Brookfield Renewable Energy Partners ULC 3.75% Callable 2025 Canada Corporate 2,500,000 2,500 2,547 Brookfield Renewable Energy Partners ULC 3.63% Callable 2026 Canada Corporate 4,000,000 3,998 3,979 Bruce Power LP 2.84% Canada Corporate 1,500,000 1,500 1,502 Bruce Power LP 3.00% Callable 2024 Canada Corporate 2,000,000 2,000 1,981 Bruce Power LP 3.97% Canada Corporate 4,220,000 4,298 4,388 Bruce Power LP 4.01% Callable 2029 Canada Corporate 3,950,000 3,950 4,069 Calpine Corp. 5.25% Callable A United States Corporate USD 60, Canada Housing Trust No % Canada Federal Government 820, Canadian Imperial Bank of Commerce 1.64% DPNT Canada Corporate 14,000,000 14,011 13,594

6 SCHEDULE OF INVESTMENTS (continued) No. of Units, Fair Shares, or Cost Value Country Sector Par Value (CAD$ 000) (CAD$ 000) BONDS (continued) Canadian Imperial Bank of Commerce 2.30% DPNT Canada Corporate 4,450,000 4,450 4,384 Canadian Imperial Bank of Commerce 2.47% Canada Corporate 25,410,000 25,415 25,169 Canadian Imperial Bank of Commerce F/R Callable 2023 Canada Corporate 2,730,000 2,729 2,740 Canadian National Railway Co. 2.75% Callable 2021 Canada Corporate 2,000,000 2,089 2,017 Canadian Natural Resources Ltd. 3.05% Canada Corporate 3,000,000 2,998 3,027 Canadian Natural Resources Ltd. 2.89% Callable MTN Canada Corporate 3,000,000 3,000 3,019 Canadian Natural Resources Ltd. 3.31% Canada Corporate 5,000,000 4,999 5,069 Canadian Real Estate Investment Trust 2.95% Callable 2022 Canada Corporate 2,230,000 2,230 2,201 Canadian Western Bank 2.38% DPNT Canada Corporate 1,500,000 1,500 1,497 Canadian Western Bank 2.79% DPNT Canada Corporate 3,700,000 3,700 3,688 Canadian Western Bank 2.74% DPNT Canada Corporate 4,000,000 4,000 3,962 Canadian Western Bank 2.92% Canada Corporate 2,910,000 2,910 2,893 Capital Power Corp. 4.28% Callable 2024 Canada Corporate 7,000,000 7,000 7,094 Central 1 Credit Union F/R Canada Corporate 1,260,000 1,260 1,257 Central 1 Credit Union 2.60% Canada Corporate 2,200,000 2,199 2,162 Chassix Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,356,600 1,686 1,759 Choice Properties Real Estate Investment Trust 3.01% Callable 2022 Canada Corporate 1,100,000 1,100 1,099 Choice Properties Real Estate Investment Trust 3.56% Callable 2024 Canada Corporate 5,060,000 5,060 5,083 Choice Properties Real Estate Investment Trust 3.55% Callable 2024 Canada Corporate 1,860,000 1,860 1,860 Choice Properties Real Estate Investment Trust 4.06% Callable Canada Corporate 2,750,000 2,750 2,820 Choice Properties Real Estate Investment Trust 4.18% Callable 2027 Canada Corporate 570, CI Financial Corp. 2.65% Callable Canada Corporate 5,000,000 5,000 4,997 CI Financial Corp. 3.90% Callable Canada Corporate 2,000,000 2,000 2,041 Citigroup Inc. 3.39% United States Corporate 2,000,000 2,000 2,045 City of Montreal 3.15% Canada Municipal Governments 3,500,000 3,492 3,483 Cogeco Communications Inc. 4.93% Canada Corporate 2,300,000 2,301 2,460 Cominar Real Estate Investment Trust 4.23% Canada Corporate 2,000,000 1,984 2,029 Cominar Real Estate Investment Trust 4.94% Callable Canada Corporate 2,300,000 2,347 2,369 Communications Sales & Leasing Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,044,823 2,464 2,548 Coronado Australian Holdings Pty Ltd. Term Loan B 1st Lien F/R United States Bank Loans USD 872,143 1,091 1,112 Coronado Australian Holdings Pty Ltd. Term Loan C 1st Lien F/R United States Bank Loans USD 237, CSC Holdings LLC Term Loan B 1st Lien F/R United States Bank Loans USD 750, CT Real Estate Investment Trust 3.29% Series D Callable Canada Corporate 5,000,000 5,000 4,877 CT Real Estate Investment Trust 3.47% Series E Callable Canada Corporate 3,100,000 3,100 3,023 CU Inc. 4.54% Callable Canada Corporate 4,000,000 4,465 4,631 CU Inc. 3.81% Canada Corporate 12,500,000 12,882 13,036 CU Inc. 4.09% Callable Canada Corporate 10,000,000 10,072 10,898 CU Inc. 3.96% Callable Canada Corporate 3,900,000 3,900 4,184 CU Inc. 3.76% Callable 2046 Canada Corporate 4,230,000 4,230 4,389 Daimler Canada Finance Inc. 1.80% EMTN Germany Corporate 5,000,000 5,000 4,952 Daimler Canada Finance Inc. 2.23% EMTN Germany Corporate 2,500,000 2,500 2,454 DaVita Healthcare Partners Inc. 5.00% Callable 2020 United States Corporate USD 1,890,000 2,342 2,359 Dollarama Inc. 3.10% Canada Corporate 6,000,000 6,165 6,042 Emera Inc. 2.90% Canada Corporate 9,000,000 9,026 8,938 The Empire Life Insurance Co. F/R Callable 2021 Canada Corporate 2,000,000 2,000 2,005 The Empire Life Insurance Co. F/R Callable 2023 Canada Corporate 1,700,000 1,700 1,710 Enbridge Gas Distribution Inc. 3.31% Callable MTN Canada Corporate 3,250,000 3,249 3,342 Enbridge Gas Distribution Inc. 2.50% Callable 2026 Canada Corporate 3,900,000 3,831 3,782 Enbridge Inc. 3.19% Canada Corporate 1,500,000 1,565 1,505 Enbridge Inc. 3.94% Callable MTN Canada Corporate 7,000,000 7,000 7,241 Enbridge Inc. 3.20% Callable 2027 Canada Corporate 6,100,000 6,097 5,851 Enbridge Inc. 5.37% Callable 2027 Canada Corporate 7,900,000 7,900 7,615 Enbridge Income Fund Holdings Inc. 4.85% Callable MTN Canada Corporate 3,000,000 2,996 3,186 Enbridge Pipelines Inc. 2.93% Callable Canada Corporate 3,000,000 2,999 3,030 Enbridge Pipelines Inc. 3.00% Callable MTN Canada Corporate 2,000,000 2,000 1,972 Enbridge Pipelines Inc. 5.08% Callable Canada Corporate 5,000,000 5,130 5,734 Enbridge Pipelines Inc. 4.55% Canada Corporate 4,500,000 4,497 4,862 Enbridge Pipelines Inc. 4.13% Callable MTN Canada Corporate 3,400,000 3,399 3,457 ENMAX Corp. 3.81% Callable 2024 Canada Corporate 4,000,000 4,000 4,050 Envigo Holdings Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,330,000 1,637 1,683 EPCOR Utilities Inc. 4.55% Canada Corporate 3,000,000 3,505 3,450 EPCOR Utilities Inc. 3.55% Callable 2047 Canada Corporate 2,280,000 2,280 2,282 Fairfax Financial Holdings Ltd. 4.50% Canada Corporate 1,320,000 1,371 1,377 Fairfax Financial Holdings Ltd. 4.25% Callable 2027 Canada Corporate 4,250,000 4,250 4,214 First Capital Realty Inc. 5.60% Callable Canada Corporate 2,000,000 2,244 2,117 First Capital Realty Inc. 3.90% Callable Canada Corporate 4,000,000 4,018 4,108 First Capital Realty Inc. 3.75% Callable 2027 Canada Corporate 10,000,000 10,000 9,861 First Quantum Minerals Ltd. 6.88% Callable A Zambia Corporate USD 3,270,000 4,137 4,005 Ford Credit Canada Co. 3.14% United States Corporate 6,250,000 6,250 6,300 Ford Credit Canada Co. 2.45% United States Corporate 2,500,000 2,510 2,482 Ford Credit Canada Co. 2.92% United States Corporate 4,350,000 4,350 4,354 Ford Credit Canada Co. 2.58% United States Corporate 3,400,000 3,400 3,354

7 SCHEDULE OF INVESTMENTS (continued) No. of Units, Fair Shares, or Cost Value Country Sector Par Value (CAD$ 000) (CAD$ 000) BONDS (continued) Ford Credit Canada Co. 3.35% United States Corporate 4,300,000 4,300 4,300 FortisAlberta Inc. 4.54% MTN Canada Corporate 9,000,000 10,402 10,407 FortisAlberta Inc. 4.85% Callable 2043 Canada Corporate 1,300,000 1,536 1,580 FortisAlberta Inc. 4.27% MTN Canada Corporate 1,200,000 1,308 1,352 FortisAlberta Inc. 3.34% Callable MTN Canada Corporate 750, FortisBC Energy Inc. 2.58% Callable MTN Canada Corporate 2,000,000 1,999 1,965 FortisBC Energy Inc. 3.67% Callable MTN Canada Corporate 1,000, ,020 Gaz Metro Inc. 3.28% Callable Series T Canada Corporate 800, Gaz Metro Inc. 3.53% Callable Canada Corporate 3,000,000 2,997 3,014 General Motors Financial of Canada Ltd. 3.08% United States Corporate 2,000,000 2,043 2,012 Genesis Trust II 1.70% Canada Corporate 5,000,000 5,005 4,937 George Weston Ltd. 4.12% Callable 2024 Canada Corporate 3,000,000 3,000 3,121 GFL Environmental Inc. 5.38% Callable A Canada Corporate USD 3,110,000 3,946 3,940 Glacier Credit Card Trust 2.57% Canada Corporate 6,000,000 6,032 6,024 Glacier Credit Card Trust 2.24% Canada Corporate 5,000,000 5,000 4,968 The Goldman Sachs Group Inc. 2.43% Callable United States Corporate 6,700,000 6,700 6,535 The Goodyear Tire & Rubber Co. 4.88% Callable 2026 United States Corporate USD 760, Government of Canada 3.25% Canada Federal Government 2,090,000 2,175 2,176 Government of Canada 2.50% Canada Federal Government 8,610,000 8,807 8,847 Government of Canada 2.00% Canada Federal Government 9,000,000 8,753 8,910 Government of Canada 2.75% Canada Federal Government 1,080,000 1,166 1,205 H&R Real Estate Investment Trust F/R Canada Corporate 8,000,000 8,056 8,080 H&R Real Estate Investment Trust 3.42% Callable 2022 Canada Corporate 1,450,000 1,450 1,450 Heathrow Funding Ltd. 3.40% United Kingdom Corporate 3,460,000 3,455 3,507 Hornblower Sub LLC Term Loan 1st Lien F/R United States Bank Loans USD 1,220,000 1,568 1,576 HSBC Bank Canada 2.17% Canada Corporate 2,350,000 2,350 2,292 HSBC Bank Canada 2.54% Canada Corporate 3,650,000 3,650 3,597 Hudson River Trading LLC Term Loan 1st Lien F/R United States Bank Loans USD 1,030,000 1,334 1,332 Hydro One Inc. 1.48% MTN Canada Corporate 5,000,000 5,000 4,947 Hydro One Inc. 1.84% Canada Corporate 16,000,000 16,042 15,735 Hydro One Inc. 2.77% Canada Corporate 3,000,000 3,087 2,967 Hydro One Inc. 4.89% Canada Corporate 10,000,000 11,249 11,817 Hydro One Inc. 4.59% Callable 2043 Canada Corporate 4,752,000 4,824 5,541 Hydro One Inc. 4.17% Callable MTN Canada Corporate 12,000,000 12,500 13,158 Intact Financial Corp. 4.70% Canada Corporate 7,500,000 8,305 7,992 Intact Financial Corp. 2.85% Callable MTN Canada Corporate 10,000,000 9,841 9,640 Inter Pipeline Ltd. 3.45% Canada Corporate 9,369,000 9,488 9,546 Inter Pipeline Ltd. 3.78% MTN Canada Corporate 3,000,000 3,000 3,086 Inter Pipeline Ltd. 2.61% Callable MTN Canada Corporate 2,875,000 2,875 2,782 Inter Pipeline Ltd. 2.73% Callable 2024 Canada Corporate 2,500,000 2,500 2,416 iqor US Inc. Term Loan 2nd Lien F/R United States Bank Loans USD 1,420,000 1,697 1,768 Itron Inc. 5.00% Callable A United States Corporate USD 1,890,000 2,371 2,403 John Deere Canada Funding Inc. 2.63% United States Corporate 2,500,000 2,499 2,494 Lamb Weston Holdings Inc. 4.63% Callable A United States Corporate USD 530, Lamb Weston Holdings Inc. 4.88% Callable A United States Corporate USD 1,020,000 1,293 1,306 Laurentian Bank of Canada F/R Canada Corporate 2,930,000 2,930 2,932 Laurentian Bank of Canada 2.50% DPNT Canada Corporate 10,750,000 10,800 10,712 LD Intermediate Holdings Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 953,846 1,088 1,106 Loblaw Companies Ltd. 3.75% Canada Corporate 2,500,000 2,500 2,537 Loblaw Companies Ltd. 6.45% Callable Canada Corporate 4,824,000 5,468 5,876 Lower Mattagami Energy LP 3.42% Canada Corporate 3,000,000 3,000 3,119 Lower Mattagami Energy LP 2.31% Canada Corporate 7,000,000 6,754 6,701 The Manufacturers Life Insurance Co. 2.81% Callable 2019 Canada Corporate 8,000,000 8,166 8,045 The Manufacturers Life Insurance Co. 2.10% Callable 2020 Canada Corporate 5,000,000 5,000 4,951 Manulife Bank of Canada F/R Callable 2019 Canada Corporate 5,000,000 5,000 5,001 Manulife Bank of Canada 2.08% Canada Corporate 7,300,000 7,300 7,111 Manulife Bank of Canada 2.84% Canada Corporate 2,180,000 2,180 2,182 Mattamy Group Corp. 6.50% Callable A Canada Corporate USD 2,940,000 3,928 3,830 Meredith Corp. Term Loan B 1st Lien F/R United States Bank Loans USD 2,100,000 2,602 2,725 Metro Inc. 1.52% MTN Canada Corporate 3,800,000 3,804 3,817 Metro Inc. 3.20% Callable 2021 MTN Canada Corporate 4,000,000 4,000 4,062 Metro Inc. 2.68% Callable 2022 Canada Corporate 1,100,000 1,100 1,089 Metro Inc. 3.39% Callable 2027 Canada Corporate 2,330,000 2,329 2,298 Molson Coors International LP 2.84% Callable 2023 United States Corporate 2,500,000 2,500 2,446 Molson Coors International LP 3.44% Callable Series MPLE United States Corporate 6,150,000 6,148 6,006 Mondelez International Inc. 3.25% Callable 2025 United States Corporate 3,090,000 3,076 3,082 National Bank of Canada 1.96% Canada Corporate 15,700,000 15,243 15,251 NAV Canada 3.29% Callable 2047 Canada Corporate 1,960,000 1,963 1,999 Neenah Foundry Co. Term Loan B 1st Lien F/R United States Bank Loans USD 890,000 1,134 1,141 New Red Finance Inc. 5.00% Callable A Canada Corporate USD 2,230,000 2,783 2,744 Newell Brands Inc. 4.20% Callable 2026 United States Corporate USD 1,280,000 1,624 1,636 Nissan Canada Financial Services Inc. 2.42% Series D Canada Corporate 2,500,000 2,500 2,494

8 SCHEDULE OF INVESTMENTS (continued) No. of Units, Fair Shares, or Cost Value Country Sector Par Value (CAD$ 000) (CAD$ 000) BONDS (continued) North West Redwater Partnership 3.20% Callable 2026 Canada Corporate 10,900,000 10,875 10,931 North West Redwater Partnership 3.65% Callable 2034 Canada Corporate 1,130,000 1,125 1,134 North West Redwater Partnership/NWR Financing Co. Ltd. 4.25% Callable Series F Canada Corporate 5,000,000 4,986 5,377 Numericable-SFR 6.00% Callable 144A France Corporate USD 2,000,000 2,463 2,522 NuVista Energy Ltd. 6.50% Callable 2020 Canada Corporate 2,100,000 2,100 2,107 Ocean Bidco Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 570, OCI Beaumont LLC Term Loan B 1st Lien F/R United States Bank Loans USD 860,000 1,078 1,116 OMERS Realty Corp. 2.97% Canada Corporate 5,000,000 5,301 5,070 OMERS Realty Corp. 1.82% Callable Canada Corporate 2,000,000 2,000 1,940 Ontario Power Generation Inc. 3.32% Callable 2027 Canada Corporate 14,000,000 14,094 14,161 OPB Finance Trust 1.88% Canada Provincial Governments 7,350,000 7,261 7,199 OPB Finance Trust 3.89% Canada Provincial Governments 5,000,000 4,997 5,484 Osteon Merger Sub Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 560, Parkland Fuel Corp. 6.00% Callable A Canada Corporate USD 6,860,000 8,981 8,895 Pembina Pipeline Corp. 2.99% Callable 2023 Canada Corporate 10,270,000 10,211 10,110 Pembina Pipeline Corp. 3.71% Callable 2026 Canada Corporate 5,750,000 5,784 5,766 Pembina Pipeline Corp. 4.24% Callable 2027 MTN Canada Corporate 7,560,000 7,399 7,822 Pembina Pipeline Corp. 4.02% Callable 2027 Canada Corporate 2,620,000 2,622 2,653 Pembina Pipeline Corp. 4.81% MTN Canada Corporate 7,000,000 6,670 7,212 Petroleos De Venezuela SA 6.00% Venezuela Corporate USD 2,928, ,026 Pisces Midco Inc. 8.00% Callable A United States Corporate USD 170, Pisces Midco Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 1,290,000 1,654 1,654 Polycom Inc. Term Loan 1st Lien F/R United States Bank Loans USD 10, Prospect Medical Holdings Inc. Term Loan B 1st Lien F/R United States Bank Loans USD 2,140,000 2,633 2,764 Province of Ontario 2.60% Canada Provincial Governments 13,970,000 13,974 14,065 Province of Ontario 2.80% Canada Provincial Governments 7,928,000 7,413 7,579 PS HoldCo LLC Term Loan 1st Lien F/R United States Bank Loans USD 450, Quebecor Media Inc. 6.63% Canada Corporate 1,000,000 1,000 1,088 Reliance Intermediate Holdings LP 6.50% Callable A Canada Corporate USD 750,000 1,006 1,008 Reliance LP 3.84% Callable 2025 Canada Corporate 2,560,000 2,560 2,553 Research Now Group Inc. Term Loan 1st Lien F/R United States Bank Loans USD 2,224,425 2,719 2,852 RioCan Real Estate Investment Trust 2.19% Canada Corporate 5,000,000 5,000 4,946 RioCan Real Estate Investment Trust 3.29% Series W Canada Corporate 5,500,000 5,580 5,491 Rogers Communications Inc. 2.80% Canada Corporate 5,000,000 5,152 5,031 Rogers Communications Inc. 4.00% Canada Corporate 7,000,000 6,972 7,338 Royal Bank of Canada 1.65% DPNT Canada Corporate 2,500,000 2,457 2,428 Royal Bank of Canada 1.58% DPNT Canada Corporate 26,500,000 26,524 25,623 Royal Bank of Canada 2.36% Canada Corporate 23,860,000 23,857 23,514 Royal Bank of Canada 2.33% DPNT Canada Corporate 10,000,000 10,000 9,772 Russel Metals Inc. 6.00% Callable 2021 Canada Corporate 3,390,000 3,390 3,411 Shaw Communications Inc. 5.65% Canada Corporate 3,000,000 3,312 3,145 Shaw Communications Inc. 3.15% MTN Canada Corporate 2,500,000 2,497 2,530 Shaw Communications Inc. 4.35% Callable Canada Corporate 13,600,000 14,147 14,396 Shaw Communications Inc. 3.80% Callable Canada Corporate 13,300,000 13,399 13,505 Sigma Bidco BV Term Loan B 1st Lien F/R Netherlands Bank Loans EUR 1,120,000 1,784 1,761 Sigma US Corp. Term Loan B 1st Lien F/R Netherlands Bank Loans USD 1,120,000 1,443 1,444 Smart Real Estate Investment Trust 2.88% Canada Corporate 4,100,000 4,100 4,061 SmartCentres Real Estate Investment Trust 3.83% Callable 2027 Canada Corporate 6,290,000 6,290 6,180 SNC-Lavalin Group Inc. 2.69% Canada Corporate 720, SNC-Lavalin Group Inc. 3.24% Callable 2023 Canada Corporate 1,920,000 1,921 1,931 Sprint Spectrum Co. LLC 4.74% A United States Corporate USD 1,480,000 1,916 1,918 Stepstone Group LP Term Loan B 1st Lien F/R United States Bank Loans USD 560, Sun Life Financial Inc. F/R Callable 2022 Canada Corporate 2,190,000 2,189 2,170 Sun Life Financial Inc. F/R Callable 2023 Canada Corporate 9,000,000 9,057 8,998 Superior Plus LP 5.13% Callable 2021 Canada Corporate 3,800,000 3,800 3,814 Syniverse Holdings Inc. Term Loan 1st Lien F/R United States Bank Loans USD 470, Talen Energy Supply LLC 10.50% Callable A United States Corporate USD 210, TELUS Corp. 3.35% Callable MTN Canada Corporate 7,000,000 7,002 7,096 TELUS Corp. 3.75% Callable Canada Corporate 15,000,000 16,188 15,453 TELUS Corp. 3.75% Callable 2025 Canada Corporate 8,400,000 8,395 8,616 TELUS Corp. 3.63% Callable 2027 Canada Corporate 1,850,000 1,837 1,859 TELUS Corp. 4.85% Series SP Canada Corporate 2,520,000 2,498 2,664 TELUS Corp. 4.70% Callable 2047 Canada Corporate 10,910,000 10,914 11,295 TerraForm Power Operating LLC 5.00% Callable A United States Corporate USD 2,340,000 2,921 2,880 Teva Pharmaceutical Finance Netherlands III BV 3.15% Callable Israel Corporate USD 3,445,000 3,578 3,565 Thomson Reuters Corp. 3.37% Canada Corporate 4,000,000 4,000 4,052 Thomson Reuters Corp. 3.31% Callable Canada Corporate 10,000,000 10,119 10,181 Titan Acquisition Ltd. Term Loan 1st Lien F/R United Kingdom Bank Loans USD 1,320,000 1,724 1,699 Titan Acquisition Ltd. 7.75% Callable A United Kingdom Corporate USD 950,000 1,244 1,223 TMX Group Ltd. 2.30% Callable 2024 Canada Corporate 2,290,000 2,296 2,272 Toronto Hydro Corp. 2.52% Callable Series 12 Canada Corporate 3,000,000 3,000 2,926 Toronto Hydro Corp. 4.08% Callable Canada Corporate 6,200,000 6,376 6,800 The Toronto-Dominion Bank 1.69% DPNT Canada Corporate 8,200,000 8,218 8,099 The Toronto-Dominion Bank 2.62% Canada Corporate 34,000,000 35,041 34,057

9 SCHEDULE OF INVESTMENTS (continued) No. of Units, Fair Shares, or Cost Value Country Sector Par Value (CAD$ 000) (CAD$ 000) BONDS (continued) The Toronto-Dominion Bank 1.99% Canada Corporate 9,080,000 8,876 8,871 The Toronto-Dominion Bank 1.91% DPNT Canada Corporate 14,000,000 13,848 13,448 The Toronto-Dominion Bank F/R Callable 2024 Canada Corporate 2,780,000 2,788 2,751 Toyota Credit Canada Inc. 2.02% Canada Corporate 3,000,000 2,999 2,931 Toyota Credit Canada Inc. 2.62% Canada Corporate 1,700,000 1,700 1,694 TransCanada PipeLines Ltd. 3.30% Callable 2025 MTN Canada Corporate 5,000,000 5,014 5,078 TransCanada PipeLines Ltd. 3.39% Callable 2027 Canada Corporate 3,700,000 3,698 3,736 TransCanada PipeLines Ltd. 4.55% Canada Corporate 10,700,000 10,892 11,539 TransCanada PipeLines Ltd. 4.33% Callable 2047 Canada Corporate 5,000,000 4,999 5,234 TransCanada Trust F/R Callable 2027 Canada Corporate 6,300,000 6,278 6,226 Transcontinental Inc. 3.90% Canada Corporate 2,000,000 2,000 2,023 Trico Products Corp. Term Loan 1st Lien F/R United States Bank Loans USD 1,090,000 1,310 1,415 Uber Technologies Inc. Term Loan 1st Lien F/R United States Bank Loans USD 1,670,000 2,147 2,164 Union Gas Ltd. 2.88% Callable 2027 Canada Corporate 6,830,000 6,825 6,781 Union Gas Ltd. 3.59% Callable 2047 Canada Corporate 2,050,000 2,047 2,056 United States Treasury 2.25% United States Foreign Governments USD 21,000,000 25,090 25,925 Valeant Pharmaceuticals International Inc. 5.63% Callable 144A United States Corporate USD 910,000 1,080 1,122 Valeant Pharmaceuticals International Inc. 5.50% Callable A United States Corporate USD 1,320,000 1,499 1,491 Ventas Canada Finance Ltd. 2.55% Callable 2023 United States Corporate 80, Ventas Realty LP 4.00% Callable 2027 United States Corporate USD 1,700,000 2,109 2,160 Veresen Inc. 4.00% Callable MTN Canada Corporate 2,000,000 1,995 2,025 Videotron Ltd./Videotron Ltee. 5.13% Callable A Canada Corporate USD 4,190,000 5,361 5,297 Videotron Ltee 5.63% Callable 2025 Reg S Canada Corporate 1,500,000 1,500 1,585 Vistage Worldwide Inc. Term Loan 1st Lien F/R United States Bank Loans USD 910,000 1,136 1,181 VW Credit Canada Inc. 2.15% Germany Corporate 2,600,000 2,565 2,578 VW Credit Canada Inc. 3.25% Germany Corporate 1,920,000 1,918 1,933 W/S Packaging Holdings Inc. 9.00% Callable A United States Corporate USD 610, Wells Fargo & Co. 2.09% Series MPLE United States Corporate 7,500,000 7,500 7,269 Wells Fargo & Co. 2.51% United States Corporate 5,000,000 5,000 4,851 Wells Fargo & Co. 2.98% Series MPLE United States Corporate 6,000,000 6,000 5,803 Westcoast Energy Inc. 3.77% MTN Canada Corporate 2,000,000 1,999 2,084 Zotec Partners LLC Term Loan 1st Lien F/R United States Bank Loans USD 1,270,000 1,582 1,636 1,579,590 1,582,984 MUTUAL FUNDS 1 Investors Mortgage and Short Term Income Fund Series P n/a Mutual Funds 3,964,055 42,199 42,229 COMMISSIONS AND OTHER PORTFOLIO TRANSACTION COSTS (2) - TOTAL NON-DERIVATIVE INVESTMENTS 1,636,559 1,639,887 Net Assets (see Schedule of Asset Composition): Total non-derivative investments 1,639,887 Cash and cash equivalents 2,704 Derivative assets (see schedule of derivative instruments) 373 Derivative liabilities (see schedule of derivative instruments) (697) Other net assets (liabilities) (9,616) 1,632,651 1 This fund is managed by the Manager of the Fund.

10 Schedule 1 Asset Composition PORTFOLIO ALLOCATION % of net assets Long Positions Bonds 96.9 Mutual Funds 2.6 Mortgages 0.9 Cash and cash equivalents as at March 31, 2017 PORTFOLIO ALLOCATION % of net assets Bonds 95.7 Mortgages 2.4 Equities 0.3 Cash and cash equivalents 1.1 Other net assets (liabilities) 0.5 Total Short Positions Bonds (1.0) Other net assets (liabilities) 0.4 Total BONDS SECTOR ALLOCATION Corporate Financials 33.5 Corporate Utilities 14.1 Corporate Energy 9.9 Corporate Telecommunication Services 8.8 Corporate Real Estate 7.0 Bank Loans 2.8 Provincial Governments 2.1 Federal Government 1.3 Foreign Governments 0.6 Municipal Governments 0.2 Corporate Other BONDS SECTOR ALLOCATION Corporate Financials 34.6 Corporate Utilities 11.2 Corporate Telecommunication Services 9.7 Corporate Energy 8.0 Corporate Real Estate 5.7 Provincial Governments 4.8 Federal Government 3.6 Corporate Information Technology 2.3 Corporate Other

11 Schedule 2 Distribution of Mortgages by Interest Rate Principal value Amortized Fair Number outstanding cost value Rate of loans ($ 000) ($ 000) ($ 000) to to to ,589 8,639 8, to ,759 1,767 1, to ,510 1,513 1, to ,442 1,452 1, to to ,691 14,772 14,674 The rates used for determining fair value of NHA and conventional loans were as follows: Term Residential rate 6 month (open) 6.80% 6 month (closed) 3.70% 0-12 months (open) 7.10% 0-12 months (closed) 3.10% months 3.10% months 3.29% months 3.34% months 3.44% months 3.75% months 4.10% Schedule 3 Distribution of Mortgages by Geographic Location Percentage Principal value Fair total fair Number outstanding value value of loans ($ 000) ($ 000) (%) British Columbia 14 1,365 1, Alberta 22 5,394 5, Saskatchewan Manitoba Ontario 27 3,335 3, Quebec 28 3,127 3, New Brunswick Nova Scotia Newfoundland and Labrador ,691 14, Schedule 4 Distribution of Mortgages by Type of Construction Percentage Principal value Amortized Fair total fair Number outstanding cost value value of loans ($ 000) ($ 000) ($ 000) (%) Single Family Dwelling 92 12,017 12,079 12, Condominiums 12 2,385 2,402 2, Multi-unit Dwelling up to 8 units ,691 14,772 14, Schedule 5 Distribution of Mortgages by Year of Maturity Percentage Principal value Fair total fair Number outstanding value value of loans ($ 000) ($ 000) (%) ,920 4, ,875 3, ,896 5, ,691 14, Schedule 6 Distribution of Mortgages by Type of Insurance Percentage Principal value Fair total fair Number outstanding value value of loans ($ 000) ($ 000) (%) Insured by National Housing Act (Canada) 82 9,109 9, Insured by a Private Insurer 25 5,582 5, ,691 14,

12 Schedule of Derivative Instruments Schedule of Forward Currency Contracts Currency to Contract Currency to Current Unrealized Unrealized Counterparty Settlement be received costs be delivered fair value gains losses credit rating date (000) (CAD$ 000) (000) (CAD$ 000) (CAD$ 000) (CAD$ 000) AA ,600 CAD 6,600 5,050 USD 6, AA ,973 CAD 31,973 24,830 USD 31,977 - (4) AA ,595 CAD 6,595 5,050 USD 6, AA ,695 CAD 17,695 13,755 USD 17,705 - (10) AA ,591 CAD 6,591 5,050 USD 6, AA ,080 CAD 7,080 5,510 USD 7,092 - (12) AA ,076 CAD 7,076 5,510 USD 7,089 - (13) AA ,080 CAD 7,080 5,510 USD 7,087 - (7) AA ,587 CAD 6,587 5,050 USD 6, A ,061 CAD 7,061 5,510 USD 7,084 - (23) AA ,072 CAD 7,072 5,510 USD 7,085 - (13) AA ,076 CAD 7,076 5,510 USD 7,084 - (8) AA ,064 CAD 7,064 5,510 USD 7,084 - (20) 373 (110) Schedule of Futures Contracts Notional Unrealized Unrealized Type of No. of Expiration Average rate value gains losses contract contracts date of contracts (CAD$ 000) (CAD$ 000) (CAD$ 000) CME Ultra Long Term U.S. Treasury Bond Future (78) June USD (16,014) - (587) TOTAL DERIVATIVE ASSETS 373 TOTAL DERIVATIVE LIABILITIES (697)

13 NOTES TO THE 1. ORGANIZATION OF THE FUND, FISCAL PERIODS AND GENERAL INFORMATION (a) Organization of the Fund The Fund is organized as an open-ended mutual fund trust established under the laws of Manitoba and governed by a Declaration of Trust. The address of the Fund s registered office is 447 Portage Avenue, Winnipeg, Manitoba, Canada. The Fund is authorized to issue an unlimited number of securities of multiple series. If issued, Series P and S securities are only available for purchase by other Investors Group Funds or other qualified investors. All series generally share in the operations of the Fund on a pro rata basis except for items that can be specifically attributed to one or more series. Distributions for each series may vary, partly due to the differences in expenses between the series. (b) Financial periods The Statements of Financial Position are presented and The Statements of Comprehensive Income, Statements of Changes in Financial Position and Statements of Cash Flows are for the 12 month periods ended March 31, 2018 and The Schedule of Investments is presented. Where a series of a Fund was established during either period, the information for the series is provided from inception date. Where a series of a Fund was terminated during either period, the information for the series is provided up to close of business on the termination date. (c) Fund and series information Date operations Management Service Administration Trustee Series commenced fee (%) fee (%) fee (%) fee (%) Series A July 13, Series B July 13, Series C May 2, Series Jdsc July 13, Series Jnl July 13, Series P July 2, Series U July 12, The fee rates in the table above are rounded to two decimals. Date operations commenced are shown if within 10 years. Until December 31, 2016, the annual administration fee rate for Series B, Jnl and U was 0.10%. The Fund aims to provide current income by investing primarily in fixed income securities issued by Canadian corporations. To achieve the Fund s investment objective, the Fund invests primarily in Canadian corporate investment grade securities. The Fund s investments in high-yielding debt instruments rated below BBB or its equivalent (or non-rated investments, other than mortgages) will not generally exceed 25% of its assets, including an investment of up to 10% of its assets in the IG Putnam U.S. High Yield Income Fund. The Fund may also invest up to 10% of its assets in mortgages and in other less liquid assets. These mortgages may have terms to maturity exceeding five years, but generally the Fund intends to invest in mortgages with terms of less than five years. In addition, the Fund may hold equities acquired through conversion of its debt securities, and may also invest a portion of its assets in other equity income producing securities. Generally speaking, it is the Fund s intention that its investment in foreign securities will range from 0% to 30% of its assets, but the Fund may invest up to 50% of its assets in foreign securities from time to time. The deferred sales charge (DSC) purchase option of the Fund is closed to all new investments. For Series A and Jdsc, the DSC purchase option is still available for reinvested distributions and investments through switches from series of the Fund and other Investors Group Funds held under the DSC option. For Series C, the DSC purchase option is still available for reinvested distributions and investments through switches from Series C or Tc of other Investors Group Funds held under the DSC option. Effective October 23, 2017, the Manager engaged Mackenzie Financial Corporation as a sub-advisor to assist in investment management and trade execution for the Fund. This sub-advisor is a subsidiary of IGM Financial Inc. and, therefore, is considered an affiliate of the Trustee, the Manager and the Distributors. Effective on or about June 30, 2018, the annual administration fee rate for Series C will be decreased by 0.05%. (d) General information I.G. Investment Management, Ltd. is the Manager and Trustee of the Fund. The Fund is distributed by Investors Group Financial Services Inc. and Investors Group Securities Inc. (collectively, the Distributors). These companies are, indirectly, wholly owned subsidiaries of IGM Financial Inc. IGM Financial Inc. is a subsidiary of Power Financial Corp. and Power Corporation of Canada. Companies related to Power Financial Corporation are therefore considered affiliates of the Trustee, the Manager and the Distributors. The Fund may invest in certain securities within the Power Group of Companies, subject to certain governance criteria, and these holdings, as at the end of the period, have been identified on the Schedule of Investments for the Fund. Any transactions during the periods were executed through market intermediaries and under prevailing market terms and conditions. 2. BASIS OF PREPARATION AND PRESENTATION These annual financial statements (financial statements) have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). A summary of the Fund s significant accounting policies under IFRS is presented in Note 3. These financial statements are presented in Canadian dollars, which is the Fund s functional currency, and rounded to the nearest thousand unless otherwise indicated. These financial statements are prepared on a going concern basis using the historical cost basis, except for financial assets and liabilities that have been measured at fair value. These financial statements were authorized for issue by the Manager on June 6, Standards issued but not yet effective for the current accounting year are described in Note SIGNIFICANT ACCOUNTING POLICIES (a) Financial instruments Investments include financial assets and liabilities such as debt and equity securities, open-ended investment funds and derivatives. The Fund classifies and measures financial instruments in accordance with IFRS 9 Financial Instruments (IFRS 9). Upon initial recognition, financial instruments are classified as fair value through profit or loss (FVTPL). All financial assets and liabilities are recognized in the Statement of Financial Position when the Fund becomes a party to the contractual requirements of the instrument. Financial instruments are derecognized when the right to receive cash flows from the instrument has expired or the Fund has transferred substantially all risks and rewards of ownership. As such, investment purchase and sale transactions are recorded as of the trade date. Financial instruments are subsequently measured at FVTPL with changes in fair value recognized in the Statement of Comprehensive Income. The cost of investments, other than mortgages, is based on the weighted average cost of investments and excludes commissions and other portfolio transaction costs, which are separately reported in the Statement of Comprehensive Income. The cost of mortgages is amortized cost. Amortized cost is the principal cost of mortgages purchased net of amortized premium or discount. Realized gains and losses on disposition including foreign exchange gains or losses on such investments, are determined based on the cost of investments. Gains and losses arising from changes in the fair value of the investments are included in the Statement of Comprehensive Income for the period in which they arise. The Fund accounts for its holdings in unlisted open-ended investment funds at FVTPL. The Fund has concluded that unlisted open-ended investment funds in which it invests do not meet the definition of structured entities. The Fund s investment in unlisted open-ended funds, if any, is presented in the Schedule of Investments at fair value which represents the Fund s maximum exposure on these investments.