Signature High Income Fund

Transcription

1 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 CI Investments Inc., 2 Queen Street East, Twentieth Floor, Toronto, ON, M5C 3G7 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. INVESTMENT OBJECTIVE AND STRATEGIES The objective of the Signature High Income Fund (the Fund ) is to generate a high level of income and long-term capital growth. It invests primarily in high yielding equity securities and Canadian corporate bonds. The portfolio advisor identifies companies that have the potential for growth and value in their industry and then considers the impact of economic trends. To achieve its objective, the portfolio advisor will actively manage the equity, fixed income, and cash components of the Fund. The Fund is not limited to how much it invests in each asset class. This will vary according to market conditions. Equity investments may include common shares, preferred shares, real estate investment trusts (REITs), royalty trusts and similar high yielding investments. The portfolio advisor uses techniques such as fundamental analysis to assess the value and growth potential of a company. This means evaluating the financial condition and management of a company, its industry and the overall economy. Fixed income securities may include foreign, corporate, and government fixed income securities. The Fund may invest in corporate bonds that have a low credit rating or are unrated, but offer a higher yield than investment grade bonds, bank loans and floating rate debt instruments. These investments may be denominated in or have exposure to foreign currencies. The portfolio advisor selects the maturity of each investment according to market conditions. The Fund may use derivatives, but only as permitted by securities regulations. In order to earn additional income, the Fund may also enter into securities lending transactions, repurchase transactions and reverse repurchase transactions, to the extent permitted by securities regulations. RISK There were no changes to the Fund over the period of this report that materially affected the overall level of risk associated with the Fund. The Fund is suitable for investors who want to receive income, are investing for the medium term, and can tolerate low to medium risk. RESULTS OF OPERATIONS The net asset value of the Fund decreased by $1,445.7 million to $7,320.1 million from March 31, 2017 to March 31, The Fund had net redemptions of $778.3 million during the year. The portfolio s performance decreased assets by $114.6 million. The Fund paid distributions totalling $552.8 million. Class A units returned -2.2% after fees and expenses for the one-year period ended March 31, Over the same time period, the Fund s benchmarks returned 1.4% and 0.8%, respectively. The benchmarks are the FTSE TMX Canada Universe Bond Total Return Index and a combination of the Bank of America Merrill Lynch U.S. High Yield Total Return Index - 40%, the MSCI World Core Infrastructure Total Return Index - 20%, the MSCI World Real Estate Total Return Index - 20% and the S&P/TSX Composite High Dividend Total Return Index - 20%. The performance of the Fund s other classes is substantially similar to that of Class A units, except for differences in the structure of fees and expenses. For the returns of the Fund s other classes, please refer to the Past performance section. What a difference two months can make. After a Goldilocks economy in 2017 that suspiciously went vertical to the upside in January 2018, the stock markets came crashing down in the last two months of the period under review. This should not obscure from the solid performance in the past 12 months, but it does raise some questions. While a correction was due, it came aggressively and at a time of continued strong financial conditions, a globally synchronized economic recovery and the positive effect of a U.S. tax cut and fiscal stimulus. The Fund uses a tactical hedge ratio, meaning that a portion of the assets held in U.S. securities are exposed to currency fluctuations. Currency detracted from performance over the period. Also detracting from performance was security selection in the real estate and other equity income categories and an overweight in midstream/pipeline companies within the infrastructure equity sleeve. An individual detractor was Colony NorthStar Inc. We took a positive view last year after the company acquired Northstar in late 2016; however, it turned out the assets it acquired were struggling more than anticipated. To preserve capital, Northstar cut its dividend in the first quarter of this year, resulting in a drop in the stock price that detracted from Fund performance. We exited the position. We added a new position in Boyne Resorts 7.25% bonds due Boyne is the owner and operator of ski resorts in Canada and the U.S., including Cypress Mountain just outside of Vancouver. Our previous experience in the term loan of Intrawest and the equity of Whistler-Blackcomb and Vail gave us additional confidence in the cash flow characteristics and asset value of the business model. Also new in in the Fund was the Canadian-dollar-denominated 6.5% bonds due 2023 from Nuvista Energy. Nuvista is a Montney-focused oil and gas producer in which the bulk of earnings are from condensate (priced at a premium to West Texas Intermediate (WTI) used as diluent in the oil sands. Since its products are used within Alberta, Nuvista does not suffer from egress issues and subsequent poor pricing differentials like many other energy producers. The Fund underperformed its benchmarks during the period. RECENT DEVELOPMENTS Although valuations for many of the Fund s income asset classes declined to levels seen in 2016, risk levels have improved since then. In the first quarter of 2016, the U.S. Federal Reserve (Fed) had just begun to increase interest rates, despite weak commodity prices and softening global growth. In the most recent quarter, the Fed s intentions to raise rates are priced into valuations and bond market fears are abating after volatility in January. Many investors may turn back to these income asset classes again after the CIG - 686

2 recent decline in technology and growth stocks, much like the early 2000s. Valuations are starting to look more attractive, especially when we take a longer-term view based on how low interest rates could fall in the next downturn. Effective April 3, 2018, Karen Fisher became a member of the CI Board of Governors ( BOG ) and the Independent Review Committee ( IRC ) of the Fund. Meanwhile, Christopher Hopper resigned from the role as a member of the BOG and IRC. RELATED PARTY TRANSACTIONS Manager, Portfolio Advisor, Trustee and Registrar CI Investments Inc. is the Manager, Portfolio Advisor, Trustee and Registrar of the Fund. CI Investments Inc. is a subsidiary of CI Financial Corp. The Manager, in consideration for management fees, provides management services required in the day-to-day operations of the Fund. The Manager bears all of the operating expenses of the Fund (other than taxes, borrowing costs and new governmental fees) in return for a fixed administration fee. Management fee and fixed administration fee rates as at March 31, 2018, for each of the classes are shown below: Inter-Fund Trading Inter-fund trading occurs when a Fund purchases or sells a security of any issuer from or to another Fund managed by the Manager. These transactions are executed through market intermediaries and under prevailing market terms and conditions. The Independent Review Committee reviews such transactions during scheduled meetings. During the year ended March 31, 2018 the Fund executed inter-fund trades. Independent Review Committee The Fund received standing instructions from the Fund s Independent Review Committee with respect to the following related party transactions: a) trades in securities of CI Financial Corp.; b) purchases or sales of securities of an issuer from or to another investment fund managed by the Manager; c) purchases or sales of other investment funds managed by the Manager or their affiliates; and d) mergers involving the Fund and another fund managed by the Manager that is subject to National Instrument Investment Funds. Annual management fee rate (%) Annual fixed administration fee rate (%) Class A Class A Class A Class A Class A Class A Class E Class EF Class F Class F The applicable standing instructions require that related party transactions be conducted in accordance with the Manager s policies and procedures and that the Manager advise the IRC of any material breach of a condition of the standing instructions. The standing instructions require, among other things, that investment decisions in respect of related party transactions (a) are free from any influence by an entity related to the Manager and without taking into account any consideration relevant to an entity related to the Manager; (b) represent the business judgment of the Manager uninfluenced by considerations other than the best interests of the Fund; (c) are made in compliance with the Manager s policies and procedures; and (d) achieve a fair and reasonable result for the Fund. Transactions made by the Manager under the standing instructions are subsequently reviewed by the IRC on a quarterly basis to monitor compliance. The Fund relied on the IRC s standing instructions regarding related party transactions during this reporting year. Class F Class F Class F Class F Class I Paid directly by investor - Class O Paid directly by investor 0.15 Class P Paid directly by investor 0.20 The Manager received $64.4 million in management fees and $10.6 million in fixed administration fees for the year. Management Fees Approximately 26% of total management fees were used to pay for sales and trailing commissions. The remaining 74% of management fees were used to pay for investment management and other general administration.

3 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. Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding gains (losses) for gains (losses) for (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) gains Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class A Commencement of operations December 18, 1996 Mar. 31, (0.22) 0.39 (1.06) (0.23) (0.38) (0.06) (0.05) (0.39) (0.88) Mar. 31, (0.22) (0.47) (0.04) - (0.38) (0.89) Mar. 31, (0.23) (0.08) (1.53) (1.09) (0.47) (0.06) - (0.31) (0.84) Mar. 31, (0.24) (0.42) (0.10) - (0.37) (0.89) Mar. 31, (0.23) (0.47) (0.12) - (0.25) (0.84) Class A1 Mar. 31, (0.13) (0.01) (0.78) (0.47) (0.24) (0.04) (0.03) (0.27) (0.58) 9.06 Class A2 Mar. 31, (0.13) 0.03 (0.85) (0.50) (0.24) (0.04) (0.03) (0.27) (0.58) 9.06 Class A3 Mar. 31, (0.13) 0.10 (0.87) (0.46) (0.25) (0.04) (0.03) (0.26) (0.58) 9.06 Class A4 Mar. 31, (0.13) 0.15 (1.04) (0.58) (0.25) (0.04) (0.03) (0.27) (0.59) 9.06 Class A5 Mar. 31, (0.11) 0.18 (0.71) (0.20) (0.26) (0.04) (0.03) (0.27) (0.60) 9.06 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

4 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding gains (losses) for gains (losses) for (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) gains Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class E Commencement of operations October 4, 2011 Mar. 31, (0.22) 0.25 (0.85) (0.27) (0.26) (0.04) (0.04) (0.30) (0.64) Mar. 31, (0.23) (0.31) (0.03) - (0.30) (0.64) Mar. 31, (0.24) (0.12) (1.11) (0.86) (0.31) (0.04) - (0.25) (0.60) Mar. 31, (0.26) (0.28) (0.07) - (0.30) (0.65) Mar. 31, (0.25) (0.33) (0.08) - (0.19) (0.60) Class EF Commencement of operations December 5, 2014 Mar. 31, (0.09) 0.25 (0.73) (0.12) (0.30) (0.05) (0.03) (0.26) (0.64) 8.62 Mar. 31, (0.09) (0.36) (0.03) - (0.25) (0.64) 9.37 Mar. 31, (0.10) (0.27) (0.76) (0.63) (0.36) (0.04) - (0.21) (0.61) 8.98 Mar. 31, (0.04) (0.41) (0.10) (0.02) - (0.11) (0.23) Class F Commencement of operations July 31, 2001 Mar. 31, (0.13) 0.35 (0.99) (0.16) (0.41) (0.07) (0.04) (0.34) (0.86) Mar. 31, (0.13) (0.49) (0.05) - (0.34) (0.88) Mar. 31, (0.14) (0.09) (1.39) (0.93) (0.50) (0.06) - (0.27) (0.83) Mar. 31, (0.14) (0.44) (0.11) - (0.33) (0.88) Mar. 31, (0.14) (0.48) (0.12) - (0.23) (0.83) Class F1 Mar. 31, (0.09) 0.04 (0.75) (0.36) (0.29) (0.05) (0.03) (0.26) (0.63) 9.06 Class F2 Mar. 31, (0.09) (0.02) (0.80) (0.46) (0.29) (0.05) (0.03) (0.26) (0.63) 9.06 Class F3 Mar. 31, (0.08) (0.11) (0.77) (0.51) (0.29) (0.05) (0.03) (0.26) (0.63) 9.07 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

5 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Unit ($) (1) (2) (4) Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding gains (losses) for gains (losses) for (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) gains Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class F4 Mar. 31, (0.07) (0.27) (0.76) (0.64) (0.30) (0.05) (0.03) (0.26) (0.64) 9.06 Class F5 Mar. 31, (0.06) (0.05) (0.91) (0.57) (0.31) (0.05) (0.03) (0.26) (0.65) 9.06 Class I Commencement of operations August 28, 2002 Mar. 31, (0.98) (0.04) (0.52) (0.09) (0.04) (0.34) (0.99) Mar. 31, (0.61) (0.06) - (0.32) (0.99) Mar. 31, (0.07) (1.42) (0.80) (0.62) (0.08) - (0.25) (0.95) Mar. 31, (0.56) (0.13) - (0.30) (0.99) Mar. 31, (0.57) (0.15) - (0.23) (0.95) Class O Commencement of operations October 4, 2011 Mar. 31, (0.02) 0.27 (0.90) (0.10) (0.46) (0.07) (0.03) (0.26) (0.82) Mar. 31, (0.02) (0.53) (0.05) - (0.25) (0.83) Mar. 31, (0.02) (0.16) (1.10) (0.67) (0.53) (0.07) - (0.20) (0.80) Mar. 31, (0.02) (0.47) (0.11) - (0.24) (0.82) Mar. 31, (0.02) (0.48) (0.12) - (0.19) (0.79) Class P Mar. 31, (0.02) 0.15 (0.89) (0.32) (0.35) (0.06) (0.03) (0.26) (0.70) 9.06 (1) This information is derived from the Fund s audited annual financial statements. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant class at the relevant time. The increase (decrease) in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant class over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund. (4) This information is provided for the years ended March 31.

6 FINANCIAL HIGHLIGHTS (cont d) Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) Management expense ratio before taxes (2) Management expense ratio after taxes (2) Effective HST rate for the year (2) Harmonized Trading Portfolio sales tax (2) expense ratio (3) turnover rate (4) $000 s 000 s % % % % % % Class A Commencement of operations December 18, 1996 Mar. 31, ,365, , Mar. 31, ,937, , Mar. 31, ,940, , Mar. 31, ,021, , Mar. 31, ,412, , Class A1 Mar. 31, ,695 60, Class A2 Mar. 31, ,113 15, Class A3 Mar. 31, ,937 5, Class A4 Mar. 31, ,610 1, Class A5 Mar. 31, , *Footnotes for the tables are found at the end of the Financial Highlights section.

7 FINANCIAL HIGHLIGHTS (cont d) Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) Management expense ratio before taxes (2) Harmonized sales tax (2) Management expense ratio after taxes (2) Effective HST rate for the year (2) Trading expense ratio (3) Portfolio turnover rate (4) $000 s 000 s % % % % % % Class E Commencement of operations October 4, 2011 Mar. 31, ,918 17, Mar. 31, ,866 14, Mar. 31, ,980 9, Mar. 31, ,148 6, Mar. 31, ,059 3, Class EF Commencement of operations December 5, 2014 Mar. 31, ,413 4, Mar. 31, ,475 4, Mar. 31, ,833 2, Mar. 31, , Class F Commencement of operations July 31, 2001 Mar. 31, ,483 19, Mar. 31, ,980 22, Mar. 31, ,547 18, Mar. 31, ,988 18, Mar. 31, ,003 13, Class F1 Mar. 31, ,052 4, Class F2 Mar. 31, ,724 1, Class F3 Mar. 31, , *Footnotes for the tables are found at the end of the Financial Highlights section.

8 FINANCIAL HIGHLIGHTS (cont d) Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) Management expense ratio before taxes (2) Harmonized sales tax (2) Management expense ratio after taxes (2) Effective HST rate for the year (2) Trading expense ratio (3) Portfolio turnover rate (4) $000 s 000 s % % % % % % Class F4 Mar. 31, , Class F5 Mar. 31, Class I Commencement of operations August 28, 2002 Mar. 31, ,513, , Mar. 31, ,160, , Mar. 31, ,354, , Mar. 31, ,107, , Mar. 31, ,672, , Class O Commencement of operations October 4, 2011 Mar. 31, ,496 17, Mar. 31, ,103 14, Mar. 31, ,110 8, Mar. 31, ,338 4, Mar. 31, ,939 2, Class P Mar. 31, , *Footnotes for the tables are found at the end of the Financial Highlights section.

9 FINANCIAL HIGHLIGHTS (cont d) (1) This information is derived from the Fund s audited annual financial statements. (2) Management expense ratio is calculated based on expenses charged to the Fund (excluding commissions and other portfolio transaction costs) and is expressed as an annualized percentage of daily average net assets for the year, including the Fund s proportionate share of any underlying fund(s) expenses, if applicable. The Effective HST tax rate is calculated using the attribution percentage for each province based on unitholder residency and can be different from 13%. (3) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net assets during the year, including the Fund s proportionate share of such expenses of any underlying fund(s), if applicable. (4) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the fiscal year. The higher a Fund s portfolio turnover rate 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 higher turnover rate and the performance of a Fund. Portfolio turnover rate is calculated by dividing the lesser of the cost of purchases and the proceeds of sales of portfolio securities for the year, and excluding cash and short-term investments maturing in less than one year, and before assets acquired from a merger, if applicable, by the average of the monthly fair value of investments during the year. (5) This information is provided for the years ended March 31.

10 PAST PERFORMANCE This section describes how the Fund has performed in the past. Remember, past returns do not indicate how the Fund will perform in the future. The information shown assumes that distributions made by the Fund in the years shown were reinvested in additional units of the relevant classes of the Fund. In addition, the information does not take into account sales, redemption, distribution or other optional charges that would have reduced returns or performance. Year-by-Year Returns The following charts show the Fund s annual performance for each of the years shown and illustrate how the Fund s performance has changed from year to year. In percentage terms, the charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year, except where noted. Class A Class E Class EF Class F Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Class I Class O Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar return is for the period from October 4, 2011 to March 31, return is for the period from December 5, 2014 to March 31, 2015.

11 Annual Compound Returns The following table shows the Fund s annual compound returns for each year indicated, compared to the Blended Index composed of: (40% - Bank of America Merrill Lynch U.S. High Yield Total Return Index, 20% - MSCI World Core Infrastructure Total Return Index, 20% - MSCI World Real Estate Total Return Index and 20% - S&P/TSX Composite High Dividend Total Return Index); the Bank of America Merrill Lynch U.S. High Yield Total Return Index, the MSCI World Core Infrastructure Total Return Index, the MSCI World Real Estate Total Return Index, the S&P/TSX Composite High Dividend Total Return Index and the FTSE TMX Canada Universe Bond Total Return Index. The Bank of America Merrill Lynch U.S. High Yield Total Return Index is an unmanaged index that tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. The MSCI World Core Infrastructure Total Return Index is a free float-adjusted market capitalization index which tracks the performance of global listed infrastructure companies that belong to a specific set of eligible sub-industries from the Global Industry Classification Standard (GICS). The weight of each sub-industry is capped at 15% to provide more diversification and the weight of any security is capped at 5% to reduce concentration. Sub-industries included are: Utilities: Electric Utilities, Gas Utilities, Multi-utilities, Water Utilities, Oil & Gas Storage & Transportation and Infrastructure: Railroads, Airport Services, Highways & Railtracks, Marine Ports & Services, Specialized REITS (including only telecommunications infrastructure companies). The MSCI World Real Estate Total Return Index is a free float-adjusted market capitalization index that consists of large and mid cap equity REITs across 23 developed markets including: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States of America, which generate a majority of their revenue and income from real estate rental and leasing operations. With 100 constituents, it represents about 85% of the REIT universe in each country and all securities are classified in the REIT sector according to the Global Industry Classification Standard. The S&P/TSX Composite High Dividend Total Return Index is a float-adjusted market capitalization weighted index which tracks the performance of dividend income paying stocks. The Index is made up of 50 to 75 stocks selected from the S&P/TSX Composite Index. The FTSE TMX Canada Universe Bond Total Return Index is a market capitalization weighted index that measures the performance of the Canadian investment-grade fixed income market. The Index consists of fixed rate bonds denominated in Canadian dollars, with a remaining effective term to maturity of at least one year, rated BBB or higher. The Index is comprised of four main credit or borrower categories: bonds issued by the Government of Canada (including Crown Corporations), Provincial bonds (including provincially-guaranteed securities), Municipal bonds and Corporate bonds. The Corporate sector is further divided into sub-sectors based on major industry groups: Financial, Communication, Industrial, Energy, Infrastructure, Real Estate and Securitization. The Corporate sector is also divided into sub-indices based on credit rating: a combined AAA/AA sector, a single A sector and a BBB sector. A discussion of the performance of the Fund as compared to the benchmark is found in the Results of Operations section of this report. One Year (%) Three Years (%) Five Years (%) Ten Years (%) Since Inception (%) Class A (2.2) n/a Blended Index 0.8 n/a* n/a* n/a* n/a Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a MSCI World Core Infrastructure Total Return Index 4.8 n/a* n/a* n/a* n/a MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a** n/a S&P/TSX Composite High Dividend Total Return Index (1.6) n/a FTSE TMX Canada Universe Bond Total Return Index n/a Class E (2.7) (0.3) 3.2 n/a 5.7 Blended Index 0.8 n/a* n/a* n/a n/a* Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a 6.8 MSCI World Core Infrastructure Total Return Index 4.8 n/a* n/a* n/a n/a* MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a 9.9 S&P/TSX Composite High Dividend Total Return Index (1.6) n/a 6.3 FTSE TMX Canada Universe Bond Total Return Index n/a 3.3 Class EF (1.6) 0.8 n/a n/a 2.1 Blended Index 0.8 n/a* n/a n/a n/a* Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a n/a 5.0 MSCI World Core Infrastructure Total Return Index 4.8 n/a* n/a n/a n/a* MSCI World Real Estate Total Return Index (6.9) (1.6) n/a n/a 2.8 S&P/TSX Composite High Dividend Total Return Index (1.6) 3.2 n/a n/a 2.1 FTSE TMX Canada Universe Bond Total Return Index n/a n/a 2.5

12 One Year (%) Three Years (%) Five Years (%) Ten Years (%) Since Inception (%) Class F (1.6) n/a Blended Index 0.8 n/a* n/a* n/a* n/a Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a MSCI World Core Infrastructure Total Return Index 4.8 n/a* n/a* n/a* n/a MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a** n/a S&P/TSX Composite High Dividend Total Return Index (1.6) n/a FTSE TMX Canada Universe Bond Total Return Index n/a Class I (0.7) n/a Blended Index 0.8 n/a* n/a* n/a* n/a Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a MSCI World Core Infrastructure Total Return Index 4.8 n/a* n/a* n/a* n/a MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a** n/a S&P/TSX Composite High Dividend Total Return Index (1.6) n/a FTSE TMX Canada Universe Bond Total Return Index n/a Class O (0.8) n/a 7.8 Blended Index 0.8 n/a* n/a* n/a n/a* Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a 6.8 MSCI World Core Infrastructure Total Return Index 4.8 n/a* n/a* n/a n/a* MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a 9.9 S&P/TSX Composite High Dividend Total Return Index (1.6) n/a 6.3 FTSE TMX Canada Universe Bond Total Return Index n/a 3.3 *MSCI World Core Infrastructure Total Return Index data available only since March 31, **MSCI World Real Estate Total Return Index data is available since October 31,

13 SUMMARY OF INVESTMENT PORTFOLIO as at March 31, 2018 Category % of Net Assets Category % of Net Assets Top 25 Holdings % of Net Assets Country allocation U.S.A Canada U.K Australia Cash & Equivalents Spain Other Net Assets (Liabilities) Switzerland Bermuda Sweden France Luxembourg Cayman Islands Netherlands Jersey Island Belgium British Virgin Islands Marshall Islands Fund(s) Germany Bahamas Ireland Brazil St. Lucia Credit Default Swaps Foreign Currency Forward Contracts... (0.8) Sector allocation Corporate Bonds Energy Real Estate Financials Utilities Industrials Consumer Discretionary Cash & Equivalents Consumer Staples Other Net Assets (Liabilities) Private Placements Fund(s) Preferred Shares Materials Warrants Information Technology Credit Default Swaps Foreign Currency Forward Contracts... (0.8) Cash & Equivalents Wells Fargo & Co Pembina Pipeline Corp The Williams Co., Inc Cheniere Energy Inc Transurban Group Brookfield Asset Management Inc., Class A Royal Dutch Shell PLC Brookfield Office Properties Inc. (USD) Allied Properties Real Estate Investment Trust American Homes 4 Rent First Capital Realty Inc Ferrovial S.A Sydney Airport Kinder Morgan Canada Ltd Six Flags Entertainment Corp Canadian Real Estate Investment Trust Brookfield Renewable Energy Partners L.P Enbridge Inc NextEra Energy Inc Gecina S.A Enercare Inc Forest City Realty Trust Inc Pattern Energy Group Inc Vail Resorts Inc Total Net Assets (in $000 s) $7,320,133 The summary of investment portfolio may change due to ongoing portfolio transactions of the Fund and updates will be available on a quarterly basis. A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, its future performance, strategies or prospects, and possible future Fund action. The words may, could, should, would, suspect, outlook, believe, plan, anticipate, estimate, expect, intend, forecast, objective, and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance. Forward-looking statements involve inherent risks and uncertainties, both about the Fund and general economic factors, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made by the Fund. These factors include, but are not limited to, general economic, political and market factors in Canada, the United States and internationally, interest and foreign exchanges rates, global equity and capital markets, business competition, technological changes, changes in laws and regulations, judicial or regulatory judgments, legal proceedings and catastrophic events. The above list of important factors that may affect future results is not exhaustive. Before making any investment decisions, we encourage you to consider these and other factors carefully. All opinions contained in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.