As Resources Run Out, Opportunities Run In.

Transcription

1 As Resources Run Out, Opportunities Run In. NEI Environmental Leaders Fund Featured Speaker: David W. Richardson, CFA Impax Asset Management- Managing Director INVESTMENTS DONE DIFFERENTLY

2 Agenda Impax Overview Investing Globally in Resource Optimization Investment Team and Process NEI Environmental Leaders Fund (Leaders Strategy) Appendix and Notes 2

3 Impax Overview IMPAX ASSET MANAGEMENT Dedicated to environmental markets since 1998 ASSETS UNDER MANAGEMENT 1 C$6.0B Listed Equities Global institutional client base Established sector thought leaders Offices in London, Hong Kong, New York and Portland OR 30 experienced investment team members C$6.6B AUM 2 C$623M Renewable Energy Infrastructure C$41M Sustainable Property 1 As of 31 March Assets under advice represent ~3% of total AUM. Company and AUM history includes three private equity funds and three advisory accounts which are not included as part of Impax s GIPS compliant business. Total AUM of the GIPS verified business is C$5.7bn as of 31 March This information is presented as supplemental to the Annual Disclosure Presentation which can be found at the back of this presentation. 3

4 Long history of thought leadership 1999: Defined Environmental Markets Universe & Index 2002: Launched UK s leading closed end environmental fund 2005: Established Renewable Energy Private Equity Fund 2007: Partnered with FTSE for Environmental Markets Indices 2008: Established Environmental Leaders Strategy and respective FTSE Indices 2009: Established Asia Pacific Strategy and respective FTSE Indices 2009: Established Global Water Strategy and respective FTSE Indices 2012: Created Sustainable Food, Agriculture & Forestry Universe and Indices 2013: Proved benefits of diversifying from fossil fuel energy to low carbon energy 2013: Highlighted rising systemic risks from Climate Change on a range of assets 2014: Added Sustainable Property capability to reduce resource intensity of real estate 2015: Launched Global Opportunities Strategy 4

5 INVESTING GLOBALLY IN RESOURCE OPTIMIZATION Investing in High Growth Companies Transforming the World s Use of Resources 5

6 What Is Resource Optimization? RAPIDLY EXPANDING MARKETS POWERFUL DRIVERS Increasing Population Rising Living Standards Infrastructure Deficit Finite Natural Resources Pollution Energy Energy Efficiency Power Network Industrials Buildings Transport Consumer Renewable Energy Developers, IPPs Solar Wind Biofuels Other Food, Agriculture & Forestry Sustainable & Efficient Agriculture Logistics, Food Safety & Packaging Sustainable Forestry Water Water Infrastructure & Technologies Infrastructure Treatment Utilities Pollution Control Pollution Control Solutions Testing & Gas Sensing Public Transportation Waste Waste Management & Technologies Tech Equipment Recycling & Processing Hazardous General Environmental Support Services Consultancies Carbon & Asset Trading Diversified Environmental (FTSE CLASSIFICATION) 6

7 New Catalysts Offer Further Opportunities Water Scarcity ~75% of California is experiencing severe to exceptional drought 1 Urban Air Pollution Growing understanding of health impacts in Asian cities VW scandal provoking review of regulatory standards in US, EU Energy Security/Availability Solar cost reduction supporting larger scale investments, Asia and US Climate Change Paris Agreement confirms direction of travel to low carbon energy systems globally Nationally determined contributions ( NDCs ) reviewed every 5 years to maintain local policy support 1 US Drought Monitor, California, as at 5 April 2016: 7

8 COP21 A positive and significant outcome Global agreement to keep man-made temperature rise to 2 C Extended ambition to reach 1.5 C - this has never been discussed before Peak greenhouse gas emissions as soon as possible Balance CO 2 sources and sinks in the 2 nd half of the century In practice this means reducing fossil fuels by 80% by 2050 Reviews every 5 years to name and shame emitters Agreement provides a clear long-term framework and direction for investors to a low carbon economy Source: Paris Agreement sets sights on 1.5 C warming limit, Ends Europe article, Susanna Ala-Kurikka, Deputy Editor. 8

9 The Paris Agreement is a wake-up call INVESTORS SHOULD CONSIDER FOUR STEPS Climate science is incredibly complex and will probably never produce definitive predictions on how the climate is changing at a local level Nevertheless, political leaders have decided to decarbonise energy systems over the next 30 years Assess magnitude of portfolio risk to increased carbon taxation/regulation 1 Stay informed on progress towards decarbonisation goals Adjust energy exposure take some money off the table in fossil fuels and reallocate to energy efficiency Build portfolios in specialist companies providing goods and services in demand in a low carbon world

10 Resource Optimization in a portfolio Global Equities Unconstrained Highly differentiated Thematic Opportunistic ESG/SRI investments Impact/mission related Low carbon/fossil fuel free Environmental solutions Climate change solutions IMPAX STRATEGIES INTEGRATE WELL WITHIN MANY ASSET CATEGORIES Natural Resources Resource demand Resource scarcity Resource efficiency Alternatives Liquid real assets Infrastructure Alternative growth Inflation oriented 10

11 Resource Optimization Sectors Show Resilience Resource Optimization trends offer strong growth potential FTSE EO Water FTSE EO Energy Efficiency FTSE EO All Share MSCI ACWI MSCI AC Energy FTSE EO Renewable Brent Crude Global coal 0 Nov-07 Sep-08 Jul-09 May-10 Mar-11 Jan-12 Nov-12 Sep-13 Jul-14 May-15 Mar-16 Data since launch of FTSE Environmental Opportunities All Share Index in January 2008 to 31 March Source: FactSet. Bloomberg Brent Crude. Data in USD. For illustration purposes only. 11

12 INVESTMENT TEAM AND PROCESS 12

13 Experienced, Multidisciplinary Investment Team Portfolio Construction Team Hubert Aarts Bruce Jenkyn-Jones multidisciplinary Lead PM Co -PM inv David Winborne Co-PM Sid Jha Supported by Portfolio Managers and Analysts Chief Executive Sustainability & ESG Jon Forster David Li 1 Michael Landymore Kirsteen Morrison Ian Simm Lisa Beauvilain Investment Risk Trading Justin Winter Oscar Yang 1 Agne Rackauskaite Fotis Chatzimichalakis Simon Higgo Dean Palin Average Industry Experience: 18 Years; Sector: 11 Years 1 Based in Hong Kong 13

14 Key characteristics: Proprietary process to screen stocks for sustainability themes Analysis focuses on business fundamentals, intrinsic value (GARP), risk and price catalysts Investment Process Universe Development Team: >20% Sales, Profitability, Invested Capital Viper Quantitative System: Domicile, Liquidity Financial Metrics > Global Avg. Lead Analyst: High Level ESG Analysis Business Assessment Impax Investment Process Resource Optimization Screen Impax Universe Quantitative Score A, B & C List Qualitative Assessment A & B List Lead and Second Analyst: 10-Steps Analysis/Full ESG Analysis Financial Model/VIPER valuation Full Due Diligence A - LIST Investment Committee Approval 14

15 Portfolio Construction and Monitoring Key characteristics: Portfolios built bottom-up from A-List companies based on most attractive return-risk factors Top down macro views inform weightings Portfolio management has low turnover objective Result is high conviction, low turnover, GARP portfolio underpinned by long-term sustainability drivers Portfolio Manager Bottom-Up Stock Selection Top-Down Macro Positioning Analysts Target Price Determination Stock Buy/Sell Recommendations Portfolio Construction Portfolio Construction Review Risk Monitoring Portfolio Positioning Review Trading Best Execution Trading Cost Analysis 15

16 ESG Research: An Integrated Risk Management Tool IMPAX S INTEGRATED ESG PROCESS Proprietary Company Level ESG Research Incorporate into Company 10- Steps Analysis Continuous Monitoring Engagement IMPAX ESG RATING SYSTEM Category Action Excellent Investable Good Investable Average Investable Fair Position size capped Excluded Not investable GOVERNANCE PARAMETERS: driven by country-level rules and codes Board structure Independence, diversity, relevance of backgrounds/experience, tenures Shareholders rights Share structure, voting rights, take-over defences Remuneration Performance alignment to remuneration Ownership structure Dominant owners, complex ownership structures Internal controls Disclosure transparency, connected transactions, accounting & proxy practices ENVIRONMENTAL/SOCIAL PARAMETERS: materiality defined at sector-level Environmental policies, processes and disclosures Management and reporting of emissions, water, energy, waste, and other metrics Social policies, processes and disclosures Management of issues such as labor, safety, health, and community relations 16

17 Thematic overlay Q Environmental subsector Market Conditions Legislation & Policy Valuation Earnings Momentum Investment View Renewable Energy Developers & IPPs Wind Power Generation Equipment Consumer Energy Efficiency Pollution Control Solutions Solar Energy Generation Equipment Biofuels Power Network Efficiency Industrial Energy Efficiency Buildings Energy Efficiency Transport Energy Efficiency Water Infrastructure Water Treatment Equipment Water Utilities Environmental Testing & Gas Sensing Public Transportation Waste Technology Equipment Recycling and Value Added Waste Processing Hazardous Waste Management General Waste Management Environmental Consultancies Key: Logistics, Food Safety & Packaging Sustainable Forestry & Plantations Sustainable & Efficient Agriculture LEGEND Weaker Stronger 17

18 LEADERS STRATEGY 18

19 NEI Environmental Leaders Fund The NEI Environmental Leaders Fund is a long-only, all-cap global equity strategy investing in resource optimization and environmental markets. INVESTMENT APPROACH Strategy Type Investing Style Cap Size Resource Optimization Long-Only Global Equity Bottom-Up GARP + Top-Down All-Cap Min 20% Business Exposure Universe 1600 Companies KEY CHARACTERISTICS AUM (Leaders Strategy) C$1.2 Billion 1 Return Objective Expected Risk & Volatility Holdings bp vs. MSCI ACWI over the longer term comparable to MSCI ACWI Stocks Turnover Ratio ~30-50% Launch Date January 2016 Portfolio Managers Hubert Aarts, Bruce Jenkyn-Jones 1 AUM is representative of the Impax Leaders Strategy as of 31 March 2016 including accounts excluded from the GIPS composite. 19

20 Positioning GEOGRAPHIC EXPOSURE 1 Asia 6% Cash 4% Japan 10% NEI Environmental Leaders Fund TOP 10 Holdings TOP 10 HOLDINGS Stock Sub-sector Country % Delphi Automotive Transport Energy Efficiency US 3.0 Europe 24% SECTOR EXPOSURE 2 North America 56% SUEZ Environnement Company General Waste Management France 3.0 Waste Management General Waste Management US 3.0 Agilent Technologies Environmental Testing & Gas Sensing US 2.9 Thermo Fisher Scientific Environmental Testing & Gas Sensing US 2.8 Huaneng Renewables Corporation Renewable Energy Developers & IPPs Hong Kong 2.8 Ingersoll-Rand Buildings Energy Efficiency US 2.6 Food, Agriculture & Forestry 7% Cash 4% Energy Efficiency 27% Murata Manufacturing Company Consumer Energy Efficiency Japan 2.6 American Water Works Company Water Utilities US 2.6 Xylem Water Infrastructure US 2.5 Water Infrastructure & Technologies 28% Renewable & Alternative Energy 4% Total allocation to top 10 holdings 27.7 Diversified Environmental 4% Pollution Control 15% Waste Management & Technologies 11% Data as of March 31, Geographic allocation by country of listing, MSCI classification. 2 Sector Exposure according to the FTSE Environmental Markets Classification System. Source: FactSet. This information is presented as supplemental to the Annual Disclosure Presentation which can be found at the back of this presentation. The Leaders Strategy is available through the NEI Environmental Leaders Fund effective as at January 11,

21 Relative Positioning NEI Environmental Leaders Fund REGIONAL EXPOSURE 1 GICS SECTOR EXPOSURE % Leaders FTSE EOAS MSCI ACWI Utilities 15% Cash 4% Consumer Discretionary 8% Consumer Staples 2% Health Care 8% Materials 12% 10 0 North America Europe Asia ex-japan Japan ROW Cash Information Technology 9% Industrials 41% MARKET CAP EXPOSURE 2 Fund EOAS ACWI ECONOMIC EXPOSURE Fund(%) EOAS (%) ACWI (%) Large-Cap (>C$13B) 40.7% 66.5% 85.4% Mid-Cap 45.5% 27.3% 14.3% Small-Cap (<C$2.6B) 9.9% 6.2% 0.3% Cash 3.9% - - Weighted Average Market cap (C$B) Cyclical Defensive Commodity Special situation Cash Median market cap (C$B) Data as of March Geographic allocation by country of listing, MSCI classification. 2 Market cap data has been converted into C$ from US$ at the exchange rate of as of December 31, source: US Federal Reserve. This information is presented as supplemental to the Annual Disclosure Presentation which can be found at the back of this presentation 21

22 Leaders Strategy Characteristics FUNDAMENTALS Leaders EOAS ACWI P/E NTM 16.0x 16.4x 15.0x Earnings growth (NTM/LTM) 9.3% 8.3% 4.3% PEG ratio RISK MEASURES (since launch) vs EOAS vs ACWI Tracking error (% p.a. ex-post) 4.5% 6.9% Active share* 75.1% 97.9% Beta Information ratio Sharpe ratio Alpha Leaders EOAS ACWI VaR (5D, 95%, ex-ante) Volatility (annualized standard deviation, ex-post, 5 years) 11.7% 12.2% 9.8% These results contain forward-looking statements based on current expectations and assumptions. Various known and unknown risks, uncertainties and other factors may cause actual results to differ from any future results or developments expressed or implied from the forward-looking statements. Each forward-looking statement speaks only as of the date of this document. We will not publicly revise or update these forward-looking statements or adjust them to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required. *Calculated using holdings as of 31 March 2016 Data calculated based on gross returns as of 31 March Source: FactSet, Axioma World-Wide Fundamental Risk Model 22

23 Leaders Strategy Performance as of March 2016 (CAD) ANNUALIZED PERFORMANCE (%) Leaders Strategy (gross) 1y 3y 5y Since Launch FTSE EOAS MSCI ACWI Leaders Strategy (gross) FTSE EOAS MSCI ACWI 1 Since strategy inception March Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 HISTORICAL PERFORMANCE (%) YTD Leaders Strategy (gross) FTSE EOAS MSCI ACWI Past performance of a strategy is no guarantee as to its performance in the future. All data is in CAD as of March 31, Composite figures are presented both gross and net of management fees and include the reinvestment of all income. MSCI index is total net return (net dividend reinvested), FTSE index is total net return (net dividend reinvested) (source: FactSet/WM Reuters). Impax Asset Management Limited and Impax Asset Management (AIFM) Limited claim compliance with the Global Investment Performance Standards (GIPS). Further information on composite data is available on request. Reference should be made to the Annual Disclosure Presentation which can be found at the back of this document. 2 First full year of performance. Strategy launched March

24 Delivered stronger growth vs market HISTORICAL EBITDA GROWTH IN THE YEAR (%) Leaders* MSCI ACWI E Data relates to the portfolio at the start of each year. *Projected figures based on available data YTD. These are forward looking numbers and there is no guarantee that these projections will be achieved. Please remember past performance is not necessarily a guide to future performance. Data sourced from FactSet, as of 31 March We have used EBITDA because it better reflects the operating performance of the company and is less impacted by one-off events than the EPS number. Based on latest available data. 24

25 Attractive relative valuation (forward looking) FUNDAMENTALS 1 PE PREMIUM 2 35% PE Premium 16.0x 15.0x 9.3 Leaders MSCI ACWI 30% 25% 20% 15% PE Premium Mean PE Premium 1SD % 5% 0% PE NTM Earnings growth PEG ratio PEG RATIO (NTM) Leaders 3.5 MSCI ACWI These are forward looking numbers and there is no guarantee that this valuation will be achieved. 2 Please remember past performance is not necessarily a guide to future performance. As of 31 March Source: FactSet. Premium calculated using PE NTM vs MSCI ACWI 25

26 2016 outlook Attractive valuations Current relative valuation levels continue to provide compelling opportunities. Favourable policy environment Global political leaders have agreed to decarbonize economies over the next 30 years. More investors looking to invest sustainably. M&A and capex spending Specific performance drivers include further M&A activity, US domestic focus on water infrastructure capex, and China s spending on environmental investments in the 13 th Five Year Plan. Limited correlation to oil and commodities Low oil prices generally positive for the global economy and equity markets. Impax sectors and funds have shown a limited correlation to oil and commodities. 26

27 APPENDIX AND NOTES 27

28 Investment Opportunity Set Has Grown NUMBER OF COMPANIES 1, , RO business exposure: 20-50% >50% Higher Expected Earnings Growth 8% forward EPS growth vs. 4% for MSCI ACWI* LARGE UNIVERSE OF GROWING COMPANIES C$5.7 T in Market Cap DIVERSE RANGE OF OPPORTUNITIES Cyclical Defensive Special Situations ENVIRONMENTAL MARKETS ARE NOT WELL UNDERSTOOD AND ARE FREQUENTLY MISPRICED Based on Impax s proprietary environmental markets database. This database is used to help construct the FTSE Environmental Markets Index Series. 1 Source: FactSet, as of 31 March Forward EPS growth data for FTSE EOAS as a proxy for resource efficiency markets. Expected earnings growth is not guaranteed to occur 28

29 Accelerating M&A Activity EV/EBITDA M&A Multiples Over Time Energy Water Waste Average EV/EBITDA 14.4x 5 0 May-2005 Oct-2006 Feb-2008 Jul-2009 Nov-2010 Apr-2012 Aug-2013 Dec-2014 May Bubble size represents deal size in USD. Source: Bloomberg. Data as at 31 March Food and Agriculture M&A activity since Impax began tracking the sector in April

30 Leaders: annual disclosure presentation March 2016 Year Total Firm Assets (millions) Ending Market Value Number of Accounts Annual Gross Return Annual Net Return (Millions) MSCI ACWI Annual Return FTSE EO All-Share Total Return Asset Weighted StdDev* 3yr Annualized Std Dev** MSCI ACWI 3yr Annualized Std Dev** FTSE EO All-Share 3yr Annualized Std Dev** 2016 YTD 4, , , , , , , , * 1, Results shown for the year 2016 represent a partial performance from January 1, 2016 through March 31, Results shown for the year 2008 represent partial period performance from March 1, 2008 through December 31, * Information is not statistically meaningful as the composite contains a low number of accounts. ** The 3 years ex-post standard deviation is not shown for the composite and benchmarks if 36 rolling monthly returns are not available.. The Leaders Composite contains long only accounts which invest in companies that provide services, infrastructure and technology in environmental markets, particularly those of alternative energy and energy efficiency, water treatment and pollution control, and waste technology and resource management and sustainable food, agriculture and forestry. These accounts contain Leaders companies with leading environmental divisions, in addition to pure play companies that have a majority of their business activities in environmental markets. For comparison purposes, the composite is measured against the MSCI All Country World Index and FTSE Environmental Opportunities All-Share indices. Impax Asset Management Limited and Impax Asset Management (AIFM) Limited claim compliance with Global Investment Performance Standards (GIPS ) and have prepared and presented this report in compliance with the GIPS standards. Impax Asset Management Limited and Impax Asset Management (AIFM) Limited have been independently verified for the periods March 1, 2002 through to September 30, Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Leaders composite has been examined for the periods March 1, 2008 through to September 30, The verification and performance examination reports are available upon request. Impax Asset Management Limited and Impax Asset Management (AIFM) Limited are subsidiaries of Impax Asset Management Group plc ("IAM") which is a publicly traded investment management company registered in the United Kingdom, and is headquartered in London, UK. For GIPS purposes the firm includes discretionary and non-discretionary accounts but excludes accounts which have a mandate to invest entirely in private equity or property. The firm maintains a complete list and description of composites, which are available upon request. The MSCI All Country World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. It covers 23 developed and 23 emerging market country indexes. FTSE Environmental Opportunities All- Share Index includes global companies for which at least 20% of their business comes from environmental markets and technologies. All indices are displayed in USD. Effective from June 2014 the MSCI All Country World index was added as a new benchmark to better reflect the investment objectives of the composite. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Composite performance is presented net of foreign withholding taxes on dividends, interest income, and capital gains. Withholding taxes may vary according to the investor's domicile. MSCI All Country World performance is presented net of foreign withholding taxes on dividends, interest income and capital gains while FTSE Environmental Opportunities All-Share performance is presented gross of foreign withholding taxes on dividends, interest income and capital gains. Past performance is not indicative of future results. The U.S. Dollar is the currency used to express performance, results are affected by currency translation. Returns are presented gross and net of management fees and include the reinvestment of all income. Net of fee performance was calculated using the highest fee of 0.55%. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Since February 2016 the highest annual management fee for the composite is 0.80% prior to that was 0.55% from January 2011 to January 2016, prior to that the highest was 1.5%. Actual investment advisory fees incurred by portfolios may vary. Trading may occur in local currency, but it is converted to base currency based on Bloomberg exchange rates as of 6pm Greenwich Mean Time each day, therefore performance is affected by currency translation. Since October 2010 base currency is converted using WM Reuters exchange rates as of 4pm Greenwich Mean Time. The Composite name changed from The Environmental Long Only All Cap Composite to The Environmental Leaders Composite in January As of 31 March 2013, the Environmental Leaders Composite has been renamed the Leaders Composite. The Leaders Composite was created October 1, Prior to March 2015 the composite was also measured against MSCI World Index. The index was removed to match the official marketing material and to simplify the GIPS complaint presentation. Starting March 2015 the MSCI AC World Index performance presented was changed from gross of withholding taxes to net of withholding taxes while FTSE Environmental Opportunities All Share Index performance is gross of withholding taxes given the unavailability of net of withholding taxes returns by FTSE. The amendment was applied retroactively to more accurately reflect the composite performance. 30

31 Important information This document has been approved by Impax Asset Management Limited and Impax Asset Management (AIFM) Limited ( Impax, authorized and regulated by the Financial Conduct Authority). Both companies are wholly owned subsidiaries of Impax Asset Management Group plc and are also registered investment advisors with the SEC but are not currently registered with the OSC or AMF. Registration does not imply a certain level of skill or training. The information and any opinions contained in this document have been compiled in good faith, but no representation or warranty, express or implied, is made to their accuracy, completeness or correctness. Impax, its officers, employees, representatives and agents expressly advise that they shall not be liable in any respect whatsoever for any loss or damage, whether direct, indirect, consequential or otherwise however arising (whether in negligence or otherwise) out of or in connection with the contents of or any omissions from this document. This document does not constitute an offer to sell, purchase, subscribe for or otherwise invest in units or shares of any fund managed by Impax. It may not be relied upon as constituting any form of investment advice and prospective investors are advised to ensure that they obtain appropriate independent professional advice before making any investment in any such fund. Any offering is made only pursuant to the relevant offering document and the relevant subscription application, all of which must be read in their entirety. Prospective investors should review the offering memorandum, including the risk factors in the offering memorandum, before making a decision to invest. Past performance of a fund or strategy is no guarantee as to its performance in the future. This document is not an advertisement and is not intended for public use or distribution. This document is solely for the use of professionals, defined as Eligible Counterparties or Professional clients. Under no circumstances should any information contained in this document be regarded as an offer or solicitation to deal in investments in any jurisdiction including, but not limited to, the United States of America and Canada. In particular, the shares of Impax Environmental Markets (Ireland) Fund, Impax Environmental Markets plc, Impax Asian Environmental Markets (Ireland) Fund, Impax Asian Environmental Markets plc, Impax Food and Agriculture Fund and Impax Asset Management Group plc are not registered under United States securities laws or Canadian securities regulation and, subject to certain limited exceptions, may not be offered, sold transferred or delivered in the United States or Canada, to US persons or Canadian persons. 31

32 For more information about the NEI Environmental Leaders Fund, contact your NEI Investments sales representative at The information and opinions in this report were prepared by NEI Investments FOR ADVISOR USE ONLY. NEI Investments endeavors to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information and opinions that are accurate and complete. However, NEI Investments makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein. The views expressed herein are subject to change without notice as markets change over time. Any reference to a particular company, security, industry or market sector should not be considered an indication of trading intent of any funds managed by NEI Investments. These views are not to be considered as investment advice nor should they be considered a recommendation to buy or sell. Mutual funds are sold by prospectus only through registered dealers. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in units value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Northwest Funds, Ethical Funds and NEI Investments are registered trademarks of Northwest & Ethical Investments L.P. 32