Alto Monthly Income and Growth Portfolio

Transcription

1 Alto Monthly Income and Growth Portfolio Annual Management Report of Fund Performance FOR THE PERIOD ENDED MARCH 31, 218 CAUTION REGARDING FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Portfolio Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as 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 Portfolio 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 Portfolio Fund and economic factors. 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 Portfolio 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. We stress that the above mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forwardlooking statements. Further, you should be aware of the fact that the Portfolio 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. This annual Management Report of Fund Performance contains financial highlights, but does not contain the complete audited annual financial statements of the investment fund. If the audited annual financial statements of your investment fund did not accompany the mailing of this report, you may receive a copy of them, at your request, and at no cost, by calling ( if you live in Québec) or by writing to us at 447 Portage Avenue, Winnipeg, Manitoba, R3B 3H5 (21, boulevard Robert-Bourassa, bureau 2, Montréal (Québec), H3A 2A6 if you live in Québec), or by visiting our website at or SEDAR at Securityholders may also use 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. Every effort has been made to ensure that the information contained in this Report is accurate as of March 31, 218 (except when stated otherwise), however, the Portfolio Fund cannot guarantee the accuracy or the completeness of this material. Please refer to the Portfolio Fund s Prospectus and audited annual financial statements for more information. References to Consultant or Consultants mean Representative or Representatives in Québec. For current net asset values per security for the Portfolio Fund and for more recent information on general market events, please visit our website at CAUTION REGARDING FUTURE PERFORMANCE Sales commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the Portfolio Fund s offering documents before investing. The indicated rates of return are the historical annual compounded total returns including changes in security value and reinvestment of all distributions (except for fee rebates) and do not take into account sales, redemption, distribution or optional charges, advisory fees payable directly by securityholders in certain series, or income taxes payable by any investor that would have reduced returns. Mutual funds are not guaranteed. Their values change frequently and past performance may not be repeated. Copyright Investors Group Inc. 218 Trademarks, including Investors Group, are owned by IGM Financial Inc. and licensed to its subsidiary corporations.

2 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 Management Discussion of Fund Performance This management discussion of Portfolio Fund performance presents views of the portfolio management team about the significant factors and developments during the past year that have affected the Portfolio Fund s performance and outlook. Please read the Caution Regarding Forward-looking Statements located on the first page of this document. Investment Objective and Strategies The Portfolio Fund aims to provide a diversified portfolio solution that provides a steady flow of income, with a secondary focus on capital stability by investing primarily in Underlying Funds and/or directly in securities having a long-term asset class exposure generally between 4-6% in fixed income and 4-6% in equity, but these allocations may be adjusted at any time. The Portfolio Fund may also invest in other asset classes. The Portfolio Fund may invest up to 1% of its assets in foreign securities. Risk The overall level of risk of investing in the Portfolio Fund remains as discussed in the Prospectus, and is not expected to have significantly increased or decreased as a result of operations during the period. Accordingly, the Portfolio Fund also remains suitable for the same investors as discussed in the Prospectus. Results of Operations CHANGES IN NET ASSETS The Portfolio Fund s net assets decreased by 9.2% during the period to $623.2 million. This change was comprised primarily of gains from operations of $2.1 million and a decrease of $65.1 million due to net securityholder activity. FEES AND EXPENSES The management expense ratios (MERs) for Series B, Jnl, Tnl, Tjnl, Tu and U are lower than the MERs for the 12-month period ended March 31, 217 primarily due to reductions in fee rates. MERs for all other series are generally similar to the MERs for the prior period. Total expenses paid also vary period to period as a result of changes in average assets in each series. Average net assets of the Portfolio Fund for the period were $658.3 million, a decrease of 3.1% compared to the period ended March 31, 217. INVESTMENT PERFORMANCE In accordance with National Instrument 81-16, the following comparison to broad-based indices has been included to help you understand the Portfolio Fund s performance relative to the general performance of the markets. However, the portfolio management team cautions that the Portfolio Fund s mandate may be different from the indices shown. For a description of the indices, see Annual Compound Returns. Also, it is important to note that investors cannot invest in an index. Indirect investments in an index are available; however, there are fees and transaction costs and other variables that will impact returns when investing in these products. Index returns included in the comparison below do not reflect these costs and variables. For the returns of all series and for longer-term performance of the Portfolio Fund, see the Past Performance section of this report. Performance will vary by series primarily because fees and expenses may differ between series, or because securities of a series were not issued and outstanding for the entire reporting period. See Series Information for the annual expense rates for each series. For the year ended March 31, 218, the Series B securities returned.% (after deducting fees and expenses paid by the Portfolio Fund). In comparison, the FTSE TMX Canada Universe Bond Index Total Return returned 1.4% and the S&P/TSX Composite Index Total Return returned 1.7%. The Portfolio Fund underperformed both indices over the period. Investors Real Property Fund, which had represented about 1% of net assets until January, contributed the most to the Portfolio Fund s performance, and Mackenzie Global Equity Income Fund, representing about 27% of net assets at end of period, detracted the most from the Portfolio Fund s performance. After the change to the Portfolio Fund s objective and strategies in September 217, the portfolio management team took advantage of the greater investment flexibility to make significant changes to the selection of Underlying Funds. The portfolio management team reduced the Portfolio Fund s exposure to Investors Real Property Fund and Underlying Funds with Canadian equity exposure, and significantly increased investments in Underlying Funds with foreign equity and fixed-income exposure. Recent Developments (BASED ON INFORMATION AS AT APRIL 2, 218) Short-term and mid-term government bond prices fell and yields increased as the Bank of Canada raised its overnight interest rate to 1.25%. Long-term government bonds advanced, outperforming shortterm and mid-term bonds. Corporate bonds outperformed government bonds due to narrower credit spreads and higher interest income, resulting in positive total returns across all bond maturities. The S&P/TSX Composite Index Total Return delivered a slim advance over the period. Despite robust economic growth in the first half, a stronger dollar and weak oil prices weighed on Canadian stocks. A September reversal of these trends led the index to solid gains until the end of 217, even as the economy slowed. Inflation fears in the U.S. then triggered a brief correction in February, and rising global trade tensions had stocks retreating again as the period ended. Despite second-half strength in oil prices, energy was the worst-performing sector. The health care and information technology sectors led on the upside. Other Developments INVESTMENT OBJECTIVE AND STRATEGIES CHANGE Effective September 6, 217, the Portfolio Fund changed its investment objective and strategies to allow it to more readily shift the allocation of its exposure across and within assets classes.

3 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 Related Party Transactions I.G. Investment Management, Ltd. is the Manager, Trustee and Portfolio Advisor of the Portfolio Fund. The Portfolio Fund is offered through the Consultants of Investors Group Financial Services Inc. and Investors Group Securities Inc., together referred to as the Distributors. The Manager, Portfolio Advisor, Distributors and Trustee are, indirectly, wholly owned subsidiaries of IGM Financial Inc. Effective October 23, 217, the following sub-advisor has been retained to provide investment services to the Portfolio Fund: Mackenzie Financial Corporation Mackenzie Financial Corporation is, indirectly, a wholly owned subsidiary of IGM Financial Inc. The Portfolio Fund paid a management fee to the Manager and Portfolio Advisor for management and portfolio advisory services (see Management Fees). The Portfolio Fund also paid the Manager an administration fee and in exchange the Manager paid the operating costs and expenses of the Portfolio Fund, except for certain specified costs. The Portfolio Fund paid the Distributors a service fee as compensation for providing or arranging for the provision of services to the Portfolio Fund, including the issue or allotment of securities. A portion of the service fee for Series C and Tc is rebated by the Distributors to the Portfolio Fund, for distribution to Series C and Tc securityholders quarterly, as outlined in the Prospectus. The Portfolio Fund also paid the Distributors a distribution fee in recognition for distributing the Portfolio Funds to Investors Group clients, including those who do not meet the minimum investment criteria for other Investors Group Funds. The Trustee is responsible for the overall direction of the affairs of the Portfolio Fund. The Portfolio Fund paid the Trustee a fee for its services. See Series Information for the annual rates paid by each series (as a percent of average net assets) for these fees. Securityholders in Series Tu and U also pay an advisory fee directly to Investors Group. This fee is not included in the Portfolio Fund s expenses. The Portfolio Fund s investments consist primarily of funds managed by the Manager and/or affiliates of the Manager (called the Underlying Funds) and/or Exchange Traded Funds (ETFs) managed by affiliates of the Manager. In certain circumstances, the Portfolio Fund may invest directly in securities. Please see the Summary of Investment Portfolio later in this report, for more details. All transactions in Underlying Funds are executed in accordance with standing instructions approved by the Investors Group Funds Independent Review Committee and based on the net asset value per security determined in accordance with the stated policies of the Underlying Fund on each transaction day. No commissions or other transaction fees were paid by the Portfolio Fund for transactions relating to the Underlying Funds. Management Fees The Portfolio Fund pays Investors Group a management fee. The management fee paid by each series is calculated as a percentage of the net asset value of the series, as of the close of business on each business day (see Series Information for rates payable by each series). Generally, management fees are used to pay costs incurred in providing investment advisory and management services and in part for distribution-related services provided by the Distributors. Securityholders in Series U and Tu pay an advisory fee directly to the Distributors for distribution-related services and therefore the management fee in those series is for investment advisory and management services only. For all other retail series (i.e. which excludes Series F, P and S, if issued), approximately 65% of management fees paid during the period represents investment advisory and management services, and approximately 35% represents distribution-related services. This may vary by series. Approximately 62% of the total fees paid by the Portfolio Fund for the period relates to services provided by the Manager, Trustee and Portfolio Advisor, and approximately 38% relates to services provided by the Distributors.

4 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 Summary of Investment Portfolio AT MARCH 31, 218 The largest positions of the Portfolio Fund (up to 25) at the end of the period, and the Portfolio Fund s investment mix are indicated below. This summary of investment portfolio may change due to ongoing portfolio transactions. The Portfolio Fund s summary of investment portfolio will be updated as at the end of the next quarter. Please see the front page for information about how it can be obtained. The Management Report of Fund Performance, Prospectus, Financial Statements and other information for each of the Underlying Funds in which the Portfolio Fund invests are available upon request, and at no cost, by using one of the methods located on the front of this document. Summary of Top 25 Long Positions % of net assets Mackenzie Global Equity Income Fund 26.7 Mackenzie Unconstrained Fixed Income Fund 15.9 IG Mackenzie Dividend Growth Fund 9.8 Mackenzie Canadian Bond Fund 9.8 IG Mackenzie Strategic Income Fund 8.9 Investors Mortgage and Short Term Income Fund 7.8 Mackenzie Sovereign Bond Fund 6.6 Investors Canadian High Yield Income Fund 5. Investors Global Dividend Fund 5. IG Mackenzie Income Fund Summary of Top 25 Short Positions % of net assets n/a - Summary of Composition of the Portfolio PORTFOLIO ALLOCATION % of net assets Income Funds 49.8 Foreign Equity Funds 26.7 Balanced Funds 13.9 Canadian Equity Funds 9.8 Cash and cash equivalents - Other net assets (liabilities) (.2) Total 1. Series Information AT MARCH 31, 218 Inception Management Distribution Service Administration Trustee Series date fee (%) fee (%) fee (%) fee (%) fee (%) Series A n/a Series B n/a Series C n/a up to Series Jdsc 7/12/ Series Jnl 7/12/ Series Tdsc n/a Series Tnl n/a Series Tc n/a up to Series Tjdsc 7/12/ Series Tjnl 7/12/ Series Tu 7/12/ Series U 7/12/ The fee rates in the table above are rounded to two decimals. Inception dates of the series are shown if within 1 years. Clients in Series C and Tc are entitled to a full or partial rebate of the service fee based on their asset levels held in the Portfolio Fund and in other Investors Group funds as outlined in the Portfolio Fund s Prospectus. Until December 31, 216, the annual management fee rate for Series Tu and U was.58%. Until December 31, 216, the annual service fee rate for Series B, Jnl, Tnl and Tjnl was.24%.

5 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 Past Performance It is important to remember that past performance doesn t necessarily indicate future performance. The returns presented below: assume that all distributions, except for fee rebates, are reinvested into the Portfolio Fund; do not include sales charges, income taxes, optional expenses or advisory fees payable directly by securityholders in certain series, that reduce returns; show performance based on Canadian dollar returns; and show performance for each of the past 1 financial years, or since the series started. Financial years are as follows: - 29 six months ended March to 218 nths ended March 31 Inception dates of the series within these periods are shown in Series Information. Performance during these periods may have been impacted by the following events: In 211, 213 and 215, changes were made to the investments by the Portfolio Fund in its Underlying Funds. Effective July 1, 21, the administration fees for Series A, B, Tdsc and Tnl decreased by.2% to.16%. Effective June 3, 212, the annual distribution fee rate for Series A, B, C, Tdsc, Tnl and Tc decreased by.5% to.1%. Effective June 3, 212, the annual service fee rate for Series B and Tnl decreased by.3% to.24%. Effective June 3, 212, fees paid by some of the Underlying Funds in which the Portfolio Fund invests were reduced, lowering the Portfolio Fund s MERs. Effective January 1, 217, the annual management fee rate for Series Tu and U decreased by.54% to.528%. Effective January 1, 217, the annual service fee rate for Series B, Jnl, Tnl and Tjnl decreased by.59% to.177%. Effective September 6, 217, the Portfolio Fund changed its investment objective and strategies to primarily invest in, or gain exposure to, equity and fixed income asset classes within specified ranges and/or other asset classes, through investment in Underlying Funds and/or directly in equity and/or fixed income securities. Year-by-Year Returns These bar charts show how much an investment in securities made on the first day of each financial year would have increased or decreased by the end of the respective period. For the first year of a series, the percentage shown will be the actual return of the series from its inception date. The charts illustrate how the Portfolio Fund s performance has changed over time. SERIES A % (1.8) (2.1) 8.4. SERIES B % (1.8) (2.2) 8.3. SERIES C % (1.8) (2.2) 8.2 (.1) SERIES Jdsc % (1.8) SERIES Jnl % (1.9) 8.6.3

6 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 YEAR-BY-YEAR RETURNS (continued) SERIES Tdsc % (1.8) (2.1) 8.4. SERIES Tu % (.7) SERIES Tnl % (1.8) (2.2) 8.3. SERIES U % (.7) SERIES Tc % (1.8) (2.2) 8.2 (.1) SERIES Tjdsc % (1.9) SERIES Tjnl % (1.8) Annual Compound Returns The following table compares the historical annual compound returns for each series with the index (or indices) shown below, for the periods shown ending March 31, 218. For a discussion of the Portfolio Fund s recent performance relative to the index (or indices), see Results of Operations. Since (%) 1 yr 3 yrs 5 yrs 1 yrs inception Series A n/a Series B n/a Series C (.1) n/a Series Jdsc n/a n/a 3.8 Series Jnl n/a n/a 3.7 Series Tdsc n/a Series Tnl n/a Series Tc (.1) n/a Series Tjdsc n/a n/a 3.8 Series Tjnl n/a n/a 3.8 Series Tu n/a n/a 5. Series U n/a n/a 5. FTSE TMX Canada Universe Bond Index Total Return S&P/TSX Composite Index Total Return The annual compound return for the indices presented in the table corresponds to the inception dates for Series Jdsc, Jnl, Tjdsc, Tjnl, Tu and U. The FTSE TMX Canada Universe Bond Index Total Return is designed to be a broad measure of the Canadian investmentgrade fixed-income market weighted by market cap. The S&P/TSX Composite Index Total Return represents the largest companies that trade on the Toronto Stock Exchange and offers a broad measure of performance of the equities market in Canada.

7 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 Financial Highlights The following tables show selected key financial information about the Portfolio Fund and are intended to help you understand the Portfolio Fund s financial performance for the past five financial years. Footnotes are presented after Ratios and Supplemental Data. Net Assets per Security 1 SERIES A SERIES B (in $) , beginning of period (in $) , beginning of period Total revenue Total expenses (.28) (.28) (.27) (.29) (.22) for the period for the period (.6).48 (.61) (.17).45 operations.1.91 (.25) (excluding dividends) - - (.3) (.2) (.3) From dividends (.19) (.19) (.2) (.19) (.18) From capital gains - (.4) (.26) (.11) (.4) Return of capital distributions (.19) (.23) (.49) (.32) (.25) at period end Total revenue Total expenses (.28) (.28) (.28) (.29) (.22) for the period for the period (.6).48 (.61) (.17).45 operations -.91 (.26) (excluding dividends) - - (.3) (.2) (.2) From dividends (.19) (.19) (.19) (.18) (.18) From capital gains - (.4) (.26) (.12) (.4) Return of capital distributions (.19) (.23) (.48) (.32) (.24) at period end SERIES C (in $) , beginning of period Total revenue Total expenses (.25) (.24) (.24) (.25) (.19) for the period for the period (.56).45 (.57) (.16).42 operations.2.87 (.22).36.8 (excluding dividends) - - (.3) (.2) (.1) From dividends (.17) (.16) (.19) (.18) (.17) From capital gains - (.4) (.25) (.11) (.4) Return of capital distributions (.17) (.2) (.47) (.31) (.22) at period end SERIES Jdsc JDSC (in $) , beginning of period Total revenue Total expenses (.22) (.22) (.21) (.22) (.15) for the period (.28) for the period (.54).43 (.55) (.15).88 operations.3.84 (.2) (excluding dividends) - - (.3) (.3) (.2) From dividends (.2) (.2) (.21) (.18) (.14) From capital gains - (.4) (.24) (.1) (.4) Return of capital distributions (.2) (.24) (.48) (.31) (.2) at period end

8 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 Net Assets per Security 1 (continued) SERIES Jnl JNL (in $) , beginning of period Total revenue Total expenses (.22) (.22) (.22) (.23) (.16) for the period (.28) for the period (.54).43 (.55) (.15).88 operations.3.84 (.21) (excluding dividends) - - (.3) (.2) (.1) From dividends (.2) (.19) (.21) (.18) (.14) From capital gains - (.4) (.24) (.11) (.4) Return of capital distributions (.2) (.23) (.48) (.31) (.19) at period end SERIES Tdsc TDSC (in $) , beginning of period Total revenue Total expenses (.18) (.18) (.19) (.2) (.16) for the period for the period (.39).33 (.43) (.12).33 operations -.63 (.18) (excluding dividends) - - (.3) (.1) (.2) From dividends (.12) (.13) (.15) (.14) (.13) From capital gains - (.3) (.18) (.8) (.3) Return of capital (.23) (.22) (.22) (.3) (.28) distributions (.35) (.38) (.58) (.53) (.46) at period end SERIES Tnl TNL (in $) , beginning of period Total revenue Total expenses (.18) (.19) (.19) (.21) (.17) for the period for the period (.38).32 (.42) (.12).33 operations.1.6 (.18) (excluding dividends) - - (.3) (.1) (.2) From dividends (.12) (.12) (.15) (.13) (.13) From capital gains - (.3) (.17) (.9) (.3) Return of capital (.23) (.23) (.22) (.3) (.28) distributions (.35) (.38) (.57) (.53) (.46) at period end SERIES Tc TC (in $) , beginning of period Total revenue Total expenses (.17) (.17) (.17) (.18) (.14) for the period for the period (.37).31 (.41) (.11).31 operations.1.6 (.17).27.6 (excluding dividends) - - (.3) (.2) (.1) From dividends (.11) (.11) (.15) (.13) (.12) From capital gains - (.2) (.17) (.8) (.3) Return of capital (.22) (.23) (.2) (.28) (.28) distributions (.33) (.36) (.55) (.51) (.44) at period end

9 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 Net Assets per Security 1 (continued) SERIES Tjdsc TJDSC (in $) , beginning of period Total revenue Total expenses (.2) (.2) (.2) (.22) (.15) for the period (.29) for the period (.47).39 (.51) (.14).88 operations.1.76 (.19) (excluding dividends) - - (.3) (.2) (.2) From dividends (.17) (.18) (.19) (.18) (.14) From capital gains - (.3) (.22) (.1) (.4) Return of capital (.28) (.27) (.28) (.36) (.25) distributions (.45) (.48) (.72) (.66) (.45) at period end SERIES Tjnl TJNL (in $) , beginning of period Total revenue Total expenses (.18) (.19) (.2) (.21) (.15) for the period (.29) for the period (.47).39 (.51) (.14).87 operations.3.77 (.19) (excluding dividends) - - (.4) (.2) - From dividends (.17) (.18) (.23) (.18) (.14) From capital gains - (.3) (.22) (.1) (.4) Return of capital (.28) (.27) (.24) (.36) (.27) distributions (.45) (.48) (.73) (.66) (.45) at period end SERIES Tu TU (in $) , beginning of period Total revenue Total expenses (.9) (.9) (.9) (.1) (.7) for the period (.29) for the period (.49).4 (.53) (.14).86 operations.14.9 (.9).48.8 (excluding dividends) - - (.5) (.5) (.7) From dividends (.29) (.3) (.32) (.25) (.16) From capital gains - (.5) (.26) (.1) (.4) Return of capital (.19) (.17) (.15) (.27) (.18) distributions (.48) (.52) (.78) (.67) (.45) at period end SERIES U (in $) , beginning of period Total revenue Total expenses (.9) (.1) (.1) (.11) (.7) for the period (.28) for the period (.53).43 (.55) (.15).88 operations (.9) (excluding dividends) - - (.5) (.5) (.7) From dividends (.32) (.32) (.33) (.26) (.16) From capital gains - (.5) (.27) (.1) (.4) Return of capital distributions (.32) (.37) (.65) (.41) (.27) at period end

10 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 Ratios and Supplemental Data SERIES A ($ s) 25,36 248, , , ,682 outstanding ( s) 17,69 21,62 23,15 27,172 3,117 expense ratio (%) or absorptions (%) SERIES Jdsc JDSC ($ s) 17, , , ,57 56,239 outstanding ( s) 1,329 13,559 15,812 12,547 5,328 expense ratio (%) or absorptions (%) SERIES B ($ s) 92,988 85,344 74,378 92,69 92,165 outstanding ( s) 8,35 7,257 6,718 7,838 7,83 expense ratio (%) or absorptions (%) SERIES Jnl JNL ($ s) 35,9 39,44 37,44 3,552 11,882 outstanding ( s) 3,376 3,742 3,732 2,881 1,125 expense ratio (%) or absorptions (%) SERIES C ($ s) 66,435 76,356 8,446 14,18 111,435 outstanding ( s) 6,142 6,946 7,772 9,393 1,83 expense ratio (%) or absorptions (%) SERIES TDSC SERIES Tdsc ($ s) 13,3 17,966 19,267 34,883 48,29 outstanding ( s) 1,786 2,34 2,549 4,195 5,599 expense ratio (%) or absorptions (%)

11 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, 218 Ratios and Supplemental Data (continued) SERIES TNL Tnl ($ s) 4,592 5,145 4,991 8,697 1,523 outstanding ( s) ,56 1,237 expense ratio (%) or absorptions (%) SERIES TJNL Tjnl ($ s) 3,51 4,843 5,354 3,363 1,244 outstanding ( s) expense ratio (%) or absorptions (%) SERIES TC Tc ($ s) 1,46 1,667 2,156 4,258 6,33 outstanding ( s) expense ratio (%) or absorptions (%) SERIES TU Tu ($ s) 1,54 9,46 7,491 3, outstanding ( s) 1, expense ratio (%) or absorptions (%) SERIES Tjdsc TJDSC ($ s) 1,137 15,979 19,62 17,782 8,544 outstanding ( s) 1,135 1,79 2,161 1, expense ratio (%) or absorptions (%) SERIES U ($ s) 72,761 39,76 15,371 8,372 2,885 outstanding ( s) 7,36 3,721 1, expense ratio (%) or absorptions (%)

12 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE MARCH 31, These calculations are prescribed by securities regulations and are not intended to be a reconciliation between opening and closing net assets per security. This information is derived from the Portfolio Fund s audited annual financial statements presented in accordance with IFRS. Net asset values presented are consistent with the net asset values calculated in accordance with securities regulations for the purchase and redemption of the Fund s securities (pricing net asset values) and as such, pricing net asset values are not separately disclosed. 2 Commissions and other portfolio transaction costs are included in total expenses. 3 Net asset value and distributions are based on the actual number of securities outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of securities outstanding over the financial period. In the period a series is established, the financial information is provided from the date of inception to the end of the period. 4 Distributions were paid in cash, reinvested in additional securities of the Portfolio Fund, or both. 5 ratio (MER) is based on total expenses, excluding commissions and other portfolio transaction costs, income taxes, and withholding taxes, for the stated period and is expressed as an annualized percentage of daily average net assets during the period, except as noted. In the period a series is established, the MER is annualized from the date of inception to the end of the period. Where a Portfolio Fund directly or indirectly via derivative contract invests in securities of an Underlying Fund, the MERs presented for the Portfolio Fund include the portion of MERs of the Underlying Fund(s) attributable to this investment. Correspondingly, the MERs presented for the Portfolio Fund exclude any management or other fees that are waived as a result of its investment in the Underlying Fund(s). Certain expenses that are non-recurring and/or otherwise uncertain as to their future timing and amount have not been annualized. For Series C and Tc, the service fees are divided by the assets attributable to Series C and Tc on the days on which the fee is charged. The MERs presented for Series C and Tc represent the maximum MER applicable to an account because service fee rebates have not been offset against service fees. Clients in Series C and Tc are entitled to a full or partial rebate of service fees based on their asset levels held in the Portfolio Fund and in other Investors Group funds as outlined in the Portfolio Fund s Prospectus. The rebate is distributed as a return of capital distribution to securityholders and is required to be reinvested in additional Series C and Tc securities. 6 The trading expense ratio (TER) represents total commissions and other portfolio transaction costs incurred as an annualized percentage of daily average net assets during the period. Where a Portfolio Fund invests in securities of an Underlying Fund, the TERs presented for the Portfolio Fund include the portion of TERs of the Underlying Fund(s) attributable to this investment. 7 The Portfolio Fund s portfolio turnover rate indicates how actively the Portfolio Fund s Portfolio Advisor manages its portfolio investments. A portfolio turnover rate of 1% is equivalent to the Portfolio Fund buying and selling all of the securities in its portfolio once in the course of the period. Generally, the higher a Portfolio Fund s portfolio turnover rate in a period, the greater the trading costs payable by it in the period, and the greater the chance of an investor receiving taxable capital gains in the period. There is not necessarily a relationship between a high turnover rate and the performance of a Portfolio Fund. Transactions incurred to realign the Portfolio Fund s portfolio after a fund merger, if any, are excluded from the portfolio turnover rate.