Annual Management Report of Fund Performance AGF American Growth Class

Transcription

1 Annual Management Report of Fund Performance AGF American Growth Class September 30,

2 AGF American Growth Class SEPTEMBER 30, Management Discussion of Fund Performance This management discussion of fund performance represents the portfolio management team s view of the significant factors and developments affecting the fund s performance and outlook. Investment Objective and Strategies As described in the Simplified Prospectus, the investment objective of AGF American Growth Class (the Fund ) is to provide long-term capital growth through investing primarily in equity securities of established U.S. companies. AGF Investments Inc. ( AGFI ), as portfolio manager, follows a bottom-up growth investment style. In bottom-up investing, the portfolio manager focuses attention on a specific company rather than on the industry in which that company operates or on the economy as a whole. Growth potential, financial condition and management of a company are evaluated through the use of fundamental analysis. The portfolio manager, as part of this evaluation, looks for companies that have above-average earnings and/or revenue growth, display key growth characteristics relative to their own history, industry or overall market, and can sustain their competitive position. In periods of unusual market conditions, a significant portion of the Fund s assets may be held in cash or fixed income securities. Risk The risks of investing in the Fund remain as disclosed in the current prospectus. The Fund continues to be suitable for investors investing for the longer term, seeking the growth potential of equity securities of U.S. companies and who have medium tolerance for risk. Results of Operations For the year ended September 30,, the Mutual Fund Shares of the Fund returned 14.5% (net of expenses) while the S&P 500 Net Return Index ( S&P 500 Net Index ) returned 12.0%. The performance of the other series of the Fund is substantially similar to that of the Mutual Fund Shares, save for differences in expense structure. Refer to Past Performance section for performance information of such series. The Fund out-performed the S&P 500 Net Index due to strong security selection. Security selection in the information technology sector was the strongest contributor to relative performance, and security selection in the telecommunication services, financials, materials and real estate sectors also contributed. This was partially offset by negative security selection in the industrials and energy sectors over the reporting period. The effect of sector allocation was relatively neutral, as an average overweight allocation to the information technology sector (32.0% versus 22.1%) and an average underweight allocation to the consumer staples sector (4.0% versus 9.2%) contributed to performance, while an average underweight allocation to the financials sector (11.6% versus 14.3%) and an average overweight allocation to the telecommunication services sector (4.4% versus 2.4%) detracted. In terms of individual holdings, the top contributors to performance during the reporting period were NVIDIA Corporation, Albemarle Corporation and Applied Materials Inc., while the top detractors were Alaska Air Group Inc., Edwards Lifesciences Corporation and Newfield Exploration Company. As of September 30,, the Fund no longer had any holdings in Applied Materials Inc. and Newfield Exploration Company. Certain series of the Fund, as applicable, make monthly distributions of capital at a rate determined by AGFI from time to time. The portfolio manager does not believe that the distributions made by the Fund had a meaningful impact on the Fund s ability to implement its investment strategy or to fulfill its investment objectives. The Fund had net redemptions of approximately $25 million for the current period, as compared to net subscriptions of approximately $75 million in the prior period. The portfolio manager does not believe that redemption/subscription activity had a meaningful impact on the Fund s performance or the ability to implement its investment strategy. Total expenses before foreign withholding taxes, commissions and other portfolio transaction costs vary period over period mainly as a result of changes in average Net Asset Values (see Explanatory Note (1) a)) and investor activity, such as number of investor accounts and transactions. The increase in management fees accounted for most of the increase in expenses during the period when compared to the previous period due to an increase in average Net Asset Values. Custodian fees increased due to an increase in market value of investment portfolio. On the contrary, interest expense decreased due to a decrease in overdraft positions throughout the period. All other expenses remained fairly consistent throughout the periods. Recent Developments Equity markets rallied strongly following the U.S. election in November. As was the case with the Brexit vote in the UK in June, a wave of populism resulted in an election surprise for investors, with underdog Republican candidate Donald Trump winning the U.S. presidency. After some initial signs of tumult during election night with Dow futures down as much as 800 points, equity markets rebounded with conviction as markets welcomed Trump s plans for tax reform and fiscal stimulus. Heading into calendar year, equities continued to move higher, continuing the rally that followed the U.S. election in November. However, leadership in the market shifted as the reflation trade that followed the election of Trump to the U.S. presidency in late waned, with financials and cyclical leadership giving way to secular growth sectors. As such, growth oriented portfolios began to out-perform during the first half of calendar year. This continued until the third calendar quarter, where amidst re-accelerating corporate earnings, value began to out-perform growth. This annual management report of fund performance contains financial highlights, but does not contain the complete annual financial statements of the investment fund. You can get a copy of the annual financial statements at your request, and at no cost, by calling , by writing to us at AGF Investments Inc. 55 Standish Court, Suite 1050, Mississauga, Ontario, Canada L5R 0G3 attention: Client Services, or by visiting our website at or SEDAR at Securityholders may also contact us using one of these methods to request a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure. ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE

3 AGF American Growth Class SEPTEMBER 30, From a macroeconomic perspective, economic data remained supportive and in some cases, saw acceleration. In the U.S., non-farm payrolls remained supportive, with the unemployment rate reaching cycle lows at 4.3% before ending the reporting period with a slight uptick higher. Meanwhile, the Institute for Supply Management s manufacturing index remained well into expansion territory, as did other purchasing managers indices ( PMI ) around the world, illustrating the strong coordinated global economic growth. The PMI measures the economic health of the manufacturing sector and is compiled based on new orders, inventory levels, production, supplier deliveries and employment environment. In response to the strong macroeconomic data, the U.S. Federal Reserve raised the federal funds rate twice in calendar year, with the potential for a third increase before the end of the year. Overall, the portfolio manager continues to believe the bull market remains intact. The U.S. equity market has posted low double-digit returns year to date despite the challenges President Trump has faced in delivering on his campaign promises. To date, there have not been any substantive details nor a firm deadline offered in support of tax reform, deregulation and infrastructure spending. However, this lack of progress on the legislative agenda has yet to materially disrupt the stock market s advance. Though a market correction has yet to be seen, one will inevitably emerge at some point in the portfolio manager s opinion, and may be triggered by a myriad of factors such as additional rate hikes, failure of more legislative initiatives, or more geopolitical tension with North Korea. However, the portfolio manager s view is to remain invested and to use corrections as buying opportunities, as there remains more scope for continued economic expansion. The portfolio manager believes much of the current expansion was spent recovering lost ground during one of the worst recessions in history in, and that this cycle s sub-par growth has meant that an environment with investor exuberance and systemic imbalances that have historically signalled the end of a cycle has not yet arrived. The current macroeconomic environment continues to look very supportive. Optimism for small businesses remains elevated and consumer confidence is at levels not seen for more than a decade. Consumers remain a driving force in the current economic expansion, given strong employment growth, low gasoline prices and low interest rates. Moreover, the outlook for business investment remains robust as the percentage of companies intending to increase capital expenditures over the next three to six months is the highest it has been in over a decade, according to the National Federation of Independent Business most recent small business survey. The portfolio manager continues to focus on the fundamentals of the companies in the portfolio, seeking out dynamic growth opportunities that are believed to be well-positioned to benefit from secular themes, such as the cloud, social media, e-commerce, autonomous and electric vehicles, digital gaming, and medical technology. In the portfolio manager s opinion, these companies that are capturing market share and delivering superior growth will out-perform and deliver alpha to shareholders over the long-term. Alpha is the excess return of the portfolio over the benchmark. Effective January 1,, the conversion of shares between two classes of a mutual fund corporation (including AGF All World Tax Advantage Group Limited) is treated as a disposition of shares at their fair market value as a result of amendments to the Income Tax Act (Canada). Previously, conversions between the Fund and other classes within AGF All World Tax Advantage Group Limited occurred on a tax-deferred basis. Related Party Transactions AGFI is the manager ( Manager ) of the Fund. Pursuant to the management agreement between the Fund and AGFI, AGFI is responsible for the day-to-day business of the Fund. AGFI also acts as the investment (portfolio) manager, managing the investment portfolio of the Fund. Under the management agreement, the Fund (except for Series I, Series O, Series Q and Series W Shares, if applicable) pays management fees, calculated based on the Net Asset Value of the respective series of the Fund. Management fees of approximately $19,436,000 were incurred by the Fund during the period ended September 30,. AGF CustomerFirst Inc. ( AGFC ) provides transfer agency services to the Fund pursuant to a services agreement with AGFI. Shareholder servicing and administrative fees of approximately $1,417,000 incurred by the Fund were paid to AGFC during the period ended September 30,. AGFI and AGFC are indirect wholly-owned subsidiaries of AGF Management Limited. Caution Regarding Forward-looking Statements This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forwardlooking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. The forward-looking statements are by their nature based on numerous assumptions, which include, amongst other things, that (i) the Fund can attract and maintain investors and has sufficient capital under management to effect its investment strategies, (ii) the investment strategies will produce the results intended by the portfolio manager, and (iii) the markets will react and perform in a manner consistent with the investment strategies. Although the forward-looking statements contained herein are based upon what the portfolio manager believes to be reasonable assumptions, the portfolio manager cannot assure that actual results will be consistent with these forward-looking statements. ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE

4 AGF American Growth Class SEPTEMBER 30, Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. It should be stressed that the above-mentioned list of factors is not exhaustive. You are encouraged to consider these and other factors carefully before making any investment decisions and you are urged to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Report of Fund Performance. 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 past five years as applicable. The Fund adopted International Financial Reporting Standards ( IFRS ) on October 1,. All per share information presented for the period ended September 30,, including opening net assets, reflects retrospective adjustments in accordance with IFRS. Information for the periods prior to October 1, is derived from financial statements prepared in accordance with Canadian generally accepted accounting principles as defined in Part V of the CPA Handbook ( Canadian GAAP ). Mutual Fund Shares Net Assets per Share (1) ($) ($) ($) ($) ($) Net Assets, beginning of period (1) Total revenue Total expenses (1.26) (1.11) (1.04) (0.87) (0.62) Realized gains (losses) Unrealized gains (losses) (2.29) Total increase (decrease) from operations (2) Net Assets, end of period (4) Mutual Fund Shares Ratios/Supplemental Data (1) Total Net Asset Value ($000 s) 859, , , , ,647 Number of shares outstanding (000 s) 18,295 19,449 17,496 22,984 24,267 Management expense ratio (5) 2.65% 2.67% 2.65% 2.68% 2.70% or absorptions (6) 2.65% 2.83% 2.99% 3.02% 3.09% Net Asset Value per share Series D Shares Net Assets per Share (1) ($) ($) ($) ($) ($) Net Assets, beginning of period (1) Total revenue Total expenses (1.33) (1.17) (1.11) (0.90) (0.64) Realized gains (losses) Unrealized gains (losses) 4.37 (0.32) (2.97) Total increase (decrease) from operations (2) Net Assets, end of period (4) Series D Shares Ratios/Supplemental Data (1) Total Net Asset Value ($000 s) Number of shares outstanding (000 s) Management expense ratio (5) 2.67% 2.68% 2.70% 2.68% 2.70% or absorptions (6) 3.62% 3.04% 3.56% 3.52% 3.51% Net Asset Value per share Series F Shares Net Assets per Share (1) ($) ($) ($) ($) ($) Net Assets, beginning of period (1) Total revenue Total expenses (0.80) (0.69) (0.65) (0.59) (0.47) Realized gains (losses) Unrealized gains (losses) 5.07 (1.05) (5.79) Total increase (decrease) from operations (2) Net Assets, end of period (4) (1), (2), (3), (4), (5), (6), (7) and (8) see Explanatory Notes ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE

5 AGF American Growth Class SEPTEMBER 30, Series F Shares Ratios/Supplemental Data (1) Series O Shares Ratios/Supplemental Data (1) Total Net Asset Value ($000 s) 64,526 44,533 33,932 21,677 16,031 Number of shares outstanding (000 s) 1, Management expense ratio (5) 1.22% 1.22% 1.23% 1.42% 1.70% or absorptions (6) 1.22% 1.22% 1.23% 1.53% 1.87% Net Asset Value per share Total Net Asset Value ($000 s) 171, , , ,074 76,095 Number of shares outstanding (000 s) 2,289 2,220 2,157 2,156 2,020 Management expense ratio (5) or absorptions (6) 0.02% 0.03% 0.03% 0.03% 0.04% Net Asset Value per share Series I Shares Net Assets per Share (1) Series Q Shares Net Assets per Share (1) ($) ($) ($) ($) ($) ($) ($) ($) ($) ($) Net Assets, beginning of period (1) 10.00* Totalrevenue 0.02 Totalexpenses (0.00) Realizedgains(losses) 0.64 Unrealizedgains(losses) 0.94 Total increase (decrease) from operations (2) 1.60 Net Assets, end of period (4) Net Assets, beginning of period (1) * Total revenue Total expenses (0.04) (0.04) (0.04) (0.02) Realized gains (losses) Unrealized gains (losses) 2.13 (1.13) (2.30) Total increase (decrease) from operations (2) From income (excluding dividends) From dividends Return of capital Net Assets, end of period (4) Series I Shares Ratios/Supplemental Data (1) Series Q Shares Ratios/Supplemental Data (1) Total Net Asset Value ($000 s) 1 Number of shares outstanding (000 s) 1 Management expense ratio (5) 0.00%~ or absorptions (6) 25,726.34%~ Trading expense ratio (7) 0.04% Portfolio turnover rate (8) 43.73% NetAssetValuepershare Total Net Asset Value ($000 s) 10,804 6,360 6,374 2,575 1,364 Number of shares outstanding (000 s) Management expense ratio (5) or absorptions (6) 0.06% 0.03% 0.11% 0.20% 0.67%~ Net Asset Value per share Series O Shares Net Assets per Share (1) Series T Shares Net Assets per Share (1) ($) ($) ($) ($) ($) ($) ($) ($) ($) ($) Net Assets, beginning of period (1) Total revenue Total expenses (0.12) (0.11) (0.11) (0.07) Realized gains (losses) Unrealized gains (losses) 6.55 (0.65) (4.51) Total increase (decrease) from operations (2) Net Assets, end of period (4) Net Assets, beginning of period (1) Total revenue Total expenses (0.62) (0.59) (0.61) (0.54) (0.42) Realized gains (losses) Unrealized gains (losses) 1.95 (0.49) (1.82) Total increase (decrease) from operations (2) From income (excluding dividends) From dividends Return of capital (1.77) (1.99) (1.61) (1.46) (1.14) Total annual distributions (3) (1.77) (1.99) (1.61) (1.46) (1.14) Net Assets, end of period (4) * represents initial Net Assets ~ annualized (1), (2), (3), (4), (5), (6), (7) and (8) see Explanatory Notes ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE

6 AGF American Growth Class SEPTEMBER 30, Series T Shares Ratios/Supplemental Data (1) Series W Shares Ratios/Supplemental Data (1) Total Net Asset Value ($000 s) 11,780 7,092 8,316 6,752 5,500 Number of shares outstanding (000 s) Management expense ratio (5) 2.59% 2.60% 2.61% 2.65% 2.70% or absorptions (6) 2.59% 2.78% 2.95% 2.99% 3.03% Net Asset Value per share Series V Shares Net Assets per Share (1) ($) ($) ($) ($) ($) Net Assets, beginning of period (1) Total revenue Total expenses (0.83) (0.76) (0.75) (0.65) (0.48) Realized gains (losses) Unrealized gains (losses) 2.22 (0.98) (2.47) Total increase (decrease) from operations (2) Return of capital (1.40) (1.53) (1.20) (1.05) (0.80) Total annual distributions (3) (1.40) (1.53) (1.20) (1.05) (0.80) Net Assets, end of period (4) Series V Shares Ratios/Supplemental Data (1) Total Net Asset Value ($000 s) 1,698 1, Number of shares outstanding (000 s) Management expense ratio (5) 2.70% 2.69% 2.70% 2.70% 2.70% or absorptions (6) 2.89% 2.87% 3.36% 3.60% 3.96% Net Asset Value per share Series W Shares Net Assets per Share (1) ($) ($) ($) ($) ($) Net Assets, beginning of period (1) 10.00* Total revenue 0.04 Total expenses (0.01) Realized gains (losses) 0.20 Unrealized gains (losses) (0.40) Total increase (decrease) from operations (2) (0.17) Net Assets, end of period (4) Total Net Asset Value ($000 s) 3,326 Number of shares outstanding (000 s) 325 Management expense ratio (5) or absorptions (6) 0.25%~ Trading expense ratio (7) 0.04% Portfolio turnover rate (8) 43.73% NetAssetValuepershare Explanatory Notes (1) a) This information is derived from the Fund s audited annual financial statements. Prior to October 1,, the net assets per share presented in the financial statements ( Net Assets ) differed from the net asset value per share calculated for fund pricing purposes ( Net Asset Value ), due to differences in valuation techniques of certain investments as required under Canadian GAAP. The adoption of IFRS, effective October 1,, has generally eliminated the difference between Net Assets per share and Net Asset Value per share. Total Net Asset Value and number of shares outstanding presented as at September 30, may have been adjusted to include certain transactions, if applicable, for the purpose of comparability with subsequent reporting periods. These adjustments have no effect on the Net Asset Value per share. b) The following series of the Fund commenced operations on the following dates, which represents the date upon which securities of a series were first made available for purchase by investors. Mutual Fund Shares April 1957 Series D Shares April 2003 Series F Shares January 2000 Series I Shares October Series O Shares November 2003 Series Q Shares December Series T Shares April Series V Shares April Series W Shares April (2) Net Assets, dividends and distributions are based on the actual number of shares outstanding at the relevant time. The increase/ decrease from operations is based on the weighted average number of shares outstanding over the financial period. (3) Dividends and distributions were paid in cash/reinvested in additional shares of the Fund, or both. Series T and Series V Shares of the Fund may make monthly distributions of capital so long as there is sufficient capital attributable to those series. The capital per share of the Series T and Series V Shares as applicable, is as follows: As at ($) ($) ($) ($) ($) Series T Shares Series V Shares (4) This is not a reconciliation of the beginning and ending Net Assets per share. * represents initial Net Assets ~ annualized (1), (2), (3), (4), (5), (6), (7) and (8) see Explanatory Notes ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE

7 AGF American Growth Class SEPTEMBER 30, (5) The management expense ratio ( MER ) of a particular series is calculated in accordance with National Instrument , based on all the expenses of the Fund (including Harmonized Sales Tax, Goods and Services Tax, income tax and interest, but excluding foreign withholding taxes, commissions and other portfolio transaction costs) and the Fund s proportionate share of the MER, if applicable, of the underlying funds and exchange traded funds ( ETFs ) in which the Fund has invested, attributable to that series, expressed as an annualized percentage of average daily Net Asset Value of that series during the period. (6) AGFI waived certain fees or absorbed certain expenses otherwise payable by the Fund. The amount of expenses waived or absorbed is determined annually on a series by series basis at the discretion of AGFI and AGFI can terminate the waiver or absorption at any time. (7) The trading expense ratio represents total commissions and other portfolio transaction costs, including the Fund s proportionate share of the commissions, if applicable, of the underlying funds and ETFs in which the Fund has invested, expressed as an annualized percentage of average daily Net Asset Value during the period. (8) The Fund s portfolio turnover rate ( PTR ) indicates how actively the Fund s portfolio advisor manages its portfolio investments. A PTR of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher a fund s PTR in a year, the greater the trading costs payable by the fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of a fund. PTR is calculated based on the lesser of the cumulative cost of purchases or cumulative proceeds of sales divided by the average market value of the portfolio, excluding short-term investments. Management Fees The Fund is managed by AGFI. As a result of providing investment and management services, AGFI receives a monthly management fee, based on the Net Asset Value of the respective series, calculated daily and payable monthly. Management fees in respect of Series I, Series O, Series Q and Series W Shares, if applicable, are arranged directly between the Manager and investors and are not expenses of the Fund. AGFI uses these management fees to pay for sales and trailing commissions to registered dealers on the distribution of the Fund s shares, investment advice, as well as for general administrative expenses such as overhead, salaries, rent, legal and accounting fees relating to AGFI s role as manager. Annual rates As a percentage of management fees Dealer compensation General administration and investment advice Mutual Fund Shares 2.20% 26.97% 73.03% Series D Shares 2.10% 23.75% 76.25% Series F Shares 1.00% % Series T Shares 2.20% 54.78% 45.22% Series V Shares 2.20% % (5.19)% Dealer compensation represents cash commissions paid by AGFI to registered dealers during the period and includes upfront deferred sales charge and trailing commissions. This amount may, in certain circumstances, exceed 100% of the fees earned by AGFI during the period. Past Performance* The performance information shown assumes that all distributions made by the Fund in the periods shown were reinvested in additional securities of the Fund. Note that the performance information does not take into account sales, redemption, distribution or other optional charges that would have reduced returns or performance. How the Fund has performed in the past does not necessarily indicate how it will perform in the future. It is AGFI s policy to report rates of return for series in existence greater than one year. The performance start date for each series represents the date of the first purchase of such series, excluding seed money. Series I and Series W Shares commenced operations in October and April, respectively. During the ten year period ended September 30,, certain other funds with similar investment objectives merged into the Fund. Generally, for fund mergers, the continuing fund is considered a new fund for the purpose of calculating rates of return and therefore, the rates of return have not been provided for the period of the merger and previous periods. However, the mergers of AGF Special U.S. Class and AGF U.S. Value Class of AGF All World Tax Advantage Group Limited formed by articles of amalgamation dated September 30, 1994 with the Fund in May did not constitute material changes to the Fund and accordingly did not impact the ability of the Fund to maintain its historical performance. All rates of return are calculated based on the Net Asset Value. Year-By-Year Returns The following bar charts show the Fund s annual performance for each of the past 10 years to September 30, as applicable, and illustrate how the Fund s performance has changed from year to year. The charts show, in percentage terms, how much an investment made on the first day of each financial period would have grown or decreased by the last day of each financial period. Mutual Fund Shares (20.8) (9.5) * The indicated rates of return shown here are the historical annual compounded total returns including changes in security value and reinvestment of all distributions and do not take into account sales, redemption, distribution or other optional charges by any securityholder that would have reduced returns or performance. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE

8 AGF American Growth Class SEPTEMBER 30, Series D Shares (20.4) (9.0) Series T Shares Series F Shares (19.9) (8.5) Performance for represents returns for the period from May 13, to September 30,. Series V Shares Series O Shares (18.4) (6.7) Performance for represents returns for the period from June 30, to September 30,. Annual Compound Returns The following table compares the historical annual compound returns for each series with the index, for each of the periods ended September 30,. Series Q Shares Performance for represents returns for the period from February 25, to September 30, Percentage Return: 1 Year 3 Years 5 Years 10 Years Since Inception Mutual Fund Shares N/A S&P 500 Net Return Index N/A Series D Shares N/A S&P 500 Net Return Index N/A Series F Shares N/A S&P 500 Net Return Index N/A Series O Shares N/A S&P 500 Net Return Index N/A Series Q Shares N/A N/A 21.4 S&P 500 Net Return Index N/A N/A 18.2 Series T Shares N/A 14.3 S&P 500 Net Return Index N/A 16.3 Series V Shares N/A 13.9 S&P 500 Net Return Index N/A 15.7 The S&P 500 Net Return Index is a capitalization-weighted index of 500 stocks net of dividends and withholding taxes. The index is designed to measure performance of the broad U.S. economy through changes in the aggregate market value of 500 stocks representing all major industries. For a discussion of the relative performance of the Fund as compared to the index, see Results of Operations in the Management Discussion of Fund Performance. ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE

9 AGF American Growth Class SEPTEMBER 30, Summary of Investment Portfolio As at September 30, The major portfolio categories and top holdings (up to 25) of the Fund at the end of the period are indicated in the following tables. The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund and the next quarterly update will be in the Quarterly Portfolio Disclosure as at December 31,. Portfolio by Country Percentage of Net Asset Value (%) United States 97.1 Cash & Cash Equivalents 3.0 Portfolio by Sector Percentage of Net Asset Value (%) Information Technology 31.9 Health Care 13.2 Financials 12.8 Consumer Discretionary 12.4 Industrials 7.8 Materials 6.2 Telecommunication Services 4.0 Consumer Staples 3.3 Real Estate 3.1 Cash & Cash Equivalents 3.0 Energy 2.4 Top Holdings Percentage of Net Asset Value (%) NVIDIA Corporation 6.8 Amazon.com Inc. 5.4 Raymond James Financial Inc. 4.1 Facebook Inc. 4.1 Albemarle Corporation 4.0 T-Mobile US Inc. 4.0 FedEx Corporation 3.7 TD Ameritrade Holding Corporation 3.4 Costco Wholesale Corporation 3.3 The Charles Schwab Corporation 3.2 Celgene Corporation 3.1 Equinix Inc. 3.1 Intuitive Surgical Inc. 2.9 Amphenol Corporation 2.9 Microchip Technology Inc. 2.8 Corning Inc. 2.8 Alaska Air Group Inc. 2.7 Netflix Inc. 2.6 UnitedHealth Group Inc. 2.6 Adobe Systems Inc. 2.6 Concho Resources Inc. 2.4 Vulcan Materials Company 2.2 PayPal Holdings Inc. 2.2 Primerica Inc. 2.1 Activision Blizzard Inc. 2.1 Total Net Asset Value (thousands of dollars) $ 1,123,688 Portfolio by Asset Mix Percentage of Net Asset Value (%) United States Equity 97.1 Cash & Cash Equivalents 3.0 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE

10 For more information contact your investment advisor or: AGF Investments Inc. 55 Standish Court, Suite 1050 Mississauga, Ontario L5R 0G3 Toll Free: (800) Web: AGF.com Securities of the funds are offered and sold in the United States only in reliance on exemptions from registration. No securities regulatory authority has expressed an opinion about these securities. It is an offence to claim otherwise. TM The AGF logo and all associated trademarks are registered trademarks of AGF Management Limited and used under licence.