CIBC Balanced Index Fund. Annual Management Report of Fund Performance

Transcription

1 CIBC Balanced Inde Fund Annual Management Report of Fund Performance for the financial year ended December 31, 2017 All figures are reported in Canadian dollars unless otherwise noted This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements of the investment fund If you have not received a copy of the annual financial statements with this annual management report of fund performance, you can get a copy of the annual financial statements at your request, and at no cost, by calling us toll-free at , by writing to us at CIBC, 18 York Street, Suite 1300, Toronto, Ontario, M5J 2T8, or by visiting wwwcibccom/mutualfunds or the SEDAR website at wwwsedarcom Unitholders may also contact us using one of these methods to request a copy of the investment fund s proy voting policies and procedures, proy voting disclosure record, or quarterly portfolio disclosure Management Discussion of Fund Performance Investment Objective and Strategies Investment Objective: CIBC Balanced Inde Fund (the Fund) seeks to provide both long-term growth through capital appreciation and income by investing primarily in a combination of debt instruments, equity securities and options, futures, and forward contracts based on Canadian, US, and international stock market indices Investment Strategies: The Fund uses passive management strategies to create a portfolio with characteristics similar to the blended inde described below, allowing the Fund to obtain a return that approimates the performance of that inde: 35% FTSE TMX Canada Universe Bond Inde, 35% S&P/TSX Composite Inde, 15% S&P 500 Total Return Inde, 8% FTSE TMX 91 day TBill Inde, and 7% MSCI EAFE Inde Risk The Fund is a Canadian fied income balanced fund that is suitable for medium- to long-term investors who can tolerate low to medium investment risk For the period ended December 31, 2017, the Fund s overall level of risk remained as discussed in the simplified prospectus Results of Operations The Fund s portfolio advisor is CIBC Asset Management Inc (CAMI or the Portfolio Advisor) The commentary that follows provides a summary of the results of operations for the period ended December 31, 2017 All dollar figures are epressed in thousands, unless otherwise indicated The Fund's net asset value increased by 88% during the period, from $270,924 as at December 31, 2016 to $509,180 as at December 31, 2017 Net sales of $212,303 and positive investment performance resulted in an overall increase in net asset value Class A units of the Fund posted a return of 61% for the period The Fund s primary benchmarks are the S&P/TSX Composite Inde and the FTSE TMX Canada Universe Bond Inde (the benchmarks), which returned 91% and 25%, respectively, for the same period The Fund s return is after the deduction of fees and epenses, unlike the benchmarks' See Past Performance for the returns of other classes of units offered by the Fund For the first time since the economic recovery began in June 2009, both the Canadian and US economies eceeded epectations, prompting the Bank of Canada to raise its overnight rate twice, while the US Federal Reserve Board increased the federal funds rate three times Short-term bond yields rose in response to these actions, but long-term yields were little changed as inflationary pressures remained low The positive economic backdrop resulted in corporate bonds outperforming government bonds as investors risk appetite remained high During the first half of the period, global financial markets faced increased uncertainty over the enactment and timing of the new US administration s major initiatives, such as infrastructure spending and ta reform In the second half of the period, the US administration delivered on its most significant policy item to date when it passed ta reform legislation that reduced corporate ta rates Crude oil prices declined by approimately 20% in the first half of the period, but then increased by 30% in the second half of the period Higher oil prices resulted from increased global demand, global production cuts and more balanced inventory levels in North America Rising energy and commodity prices, increased liquidity, more synchronized global economic growth, higher consumer confidence and US ta reforms all contributed to Canadian equity markets recouping some of their early-period underperformance The Canadian dollar strengthened in response to an improving Canadian economy However, the strong dollar partially dampened relative equity performance as a result of its impact on global trade The best-performing sectors were the health care, consumer discretionary and industrials sectors, while the energy, materials and consumer staples sectors underperformed

2 CIBC Balanced Inde Fund As an inde fund, the Fund s composition is meant to reflect a portfolio with characteristics similar to that of the benchmarks Securities were added and sold during the period for inde-matching purposes Recent Developments Effective April 27, 2017, the composition of the Independent Review Committee (IRC) changed Tim Kennish and William Thornhill resigned as members of the IRC and Susan Silma and Bryan Houston were appointed as members of the IRC Related Party Transactions Canadian Imperial Bank of Commerce (CIBC) and its affiliates have the following roles and responsibilities with respect to the Fund, and receive the fees described below in connection with their roles and responsibilities Manager CIBC is the Fund's manager (the Manager) CIBC receives management fees with respect to the Fund's day-to-day business and operations, calculated based on the net asset value of each respective class of units of the Fund as described in the section entitled Management Fees The Manager also compensates its wholesalers in connection with their marketing activities regarding the Fund From time to time, CIBC may provide seed capital to the Fund Trustee CIBC Trust Corporation, a wholly-owned subsidiary of CIBC, is the Fund's trustee (the Trustee) The Trustee holds title to the Fund's property (cash and securities) on behalf of its unitholders Portfolio Advisor The portfolio advisor provides, or arranges to provide, investment advice and portfolio management services to the Fund CAMI, a wholly-owned subsidiary of CIBC, is the Fund's portfolio advisor Distributor Dealers and other firms sell the units of the Fund to investors These dealers and other firms include CIBC s related dealers such as the principal distributor, CIBC Securities Inc (CIBC SI), the CIBC Investor s Edge discount brokerage division of CIBC Investor Services Inc (CIBC ISI), the CIBC Imperial Investor Service division of CIBC ISI, and the CIBC Wood Gundy division of CIBC World Markets Inc (CIBC WM) CIBC SI, CIBC ISI, and CIBC WM are wholly-owned subsidiaries of CIBC CIBC may pay trailing commissions to these dealers and firms, ecept for CIBC SI, in connection with the sale of units of the Fund These dealers and other firms may pay a portion of these trailing commissions to their advisors who sell units of the Fund to investors CIBC does not pay trailing commissions to CIBC SI for selling units of the Fund, although overall sales of CIBC funds may be considered in assessing the performance of their advisors and may therefore contribute to their annual compensation Brokerage Arrangements and Soft Dollars The Portfolio Advisor makes decisions, including the selection of markets and dealers and the negotiation of commissions, with respect to the purchase and sale of portfolio securities, certain derivative products and the eecution of portfolio transactions Brokerage business may be allocated by the Portfolio Advisor to CIBC WM and CIBC World Markets Corp, each a subsidiary of CIBC CIBC WM and CIBC World Markets Corp may also earn spreads on the sale of fied income securities and other securities and certain derivative products to the Fund A spread is the difference between the bid and ask prices for a security in the applicable marketplace, with respect to the eecution of portfolio transactions The spread will differ based upon various factors such as the type and liquidity of the security Dealers, including CIBC WM and CIBC World Markets Corp, may furnish goods and services, other than order eecution, to the Portfolio Advisor in partial echange for processing trades through them (referred to in the industry as soft dollar arrangements) These goods and services are paid for with a portion of the brokerage commissions and assist the Portfolio Advisor with investment decision-making services for the Fund or relate directly to the eecution of portfolio transactions on behalf of the Fund In addition, CIBC may enter into commission recapture arrangements with certain dealers with respect to the Fund Any commission recaptured will be paid to the Fund During the period, the Fund paid brokerage commissions and other fees of $29,688 to CIBC WM; the Fund did not pay any brokerage commissions or other fees to CIBC World Markets Corp Spreads associated with fied income and other securities are not ascertainable and, for that reason, cannot be included when determining these amounts Fund Transactions The Fund may enter into one or more of the following transactions (the Related Party Transactions) in reliance on the standing instructions issued by the IRC: l l l l invest in or hold equity securities of CIBC or issuers related to a portfolio sub-advisor; invest in or hold non-echange-traded debt securities of CIBC or an issuer related to CIBC in a primary offering and in the secondary market; make an investment in the securities of an issuer for which CIBC WM, CIBC World Markets Corp, or any affiliate of CIBC (a Related Dealer) acts as an underwriter during the offering of the securities at any time during the 60-day period following the completion of the offering of such securities (in the case of a private placement offering, in accordance with the eemptive relief order granted by the Canadian securities regulatory authorities and in accordance with the policies and procedures relating to such investment); purchase equity or debt securities from or sell them to a Related Dealer, where it is acting as principal; 2

3 CIBC Balanced Inde Fund l l undertake currency and currency derivative transactions where a Related Dealer is the counterparty; and purchase securities from or sell securities to another investment fund or a managed account managed by the Manager or an affiliate of the Manager At least annually, the IRC reviews the Related Party Transactions for which they have issued standing instructions The IRC is required to advise the Canadian securities regulatory authorities, after a matter has been referred or reported to the IRC by the Manager, if it determines that an investment decision was not made in accordance with a condition imposed by securities legislation or the IRC in any Related Party Transaction requesting its approval or recommendation, as applicable Custodian CIBC Mellon Trust Company is the custodian of the Fund (the Custodian) The Custodian holds all cash and securities for the Fund and ensures that those assets are kept separate from any other cash or securities that the Custodian might be holding The Custodian also provides other services to the Fund including record-keeping and processing of foreign echange transactions The Custodian may hire sub-custodians for the Fund The fees and spreads for services of the Custodian directly related to the eecution of portfolio transactions by the Fund are paid by CAMI and/or dealer(s) directed by CAMI, up to the amount of the credits generated under soft dollar arrangements from trading on behalf of the Fund during that month All other fees and spreads for the services of the Custodian are paid by the Manager and charged to the Fund on a recoverable basis CIBC owns a 50% interest in the Custodian Service Provider CIBC Mellon Global Securities Services Company (CIBC GSS) provides certain services to the Fund, including securities lending, fund accounting and reporting, and portfolio valuation Such servicing fees are paid by the Manager and charged to the Fund on a recoverable basis CIBC indirectly owns a 50% interest in CIBC GSS 3

4 CIBC Balanced Inde Fund 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 period ended December 31 The Fund's Net Assets per Unit¹ - Class A Units Net Assets, beginning of period $ 1548 $ 1469 $ 1501 $ 1419 $ 1360 Increase (decrease) from operations: Total revenue $ 074 $ 065 $ 072 $ 071 $ 121 Total epenses (020) (019) (019) (018) (017) Realized gains (losses) for the period (001) Unrealized gains (losses) for the period (048) Total increase (decrease) from operations 2 $ 094 $ 117 $ 004 $ 116 $ 139 Distributions: From income (ecluding dividends) $ 037 $ 028 $ 042 $ 032 $ 069 From dividends From capital gains Return of capital Total Distributions 3 $ 045 $ 037 $ 052 $ 040 $ 078 Net Assets, end of period $ 1598 $ 1548 $ 1469 $ 1501 $ This information is derived from the Fund's audited annual financial statements The Fund adopted International Financial Reporting Standards (IFRS) on January 1, 2014 Previously, the Fund prepared its financial statements in accordance with Canadian Generally Accepted Accounting Principles (GAAP) as defined in Part V of the CPA Canada Handbook Under Canadian GAAP, the Fund measured fair values of its investments in accordance with CICA Handbook Section 3855 which required the use of bid prices for long positions and ask prices for short positions As such, the net assets per unit figure presented in the financial statements may differ from the net asset value calculated for fund pricing purposes An eplanation of these differences can be found in the notes to the financial statements issued prior to January 1, 2014 Upon adoption of IFRS, the Fund measures the fair value of its investments by using the close market prices, where the close market price falls within the bid-ask spread As such, the Fund's accounting policies for measuring the fair value of investments in the financial statements are consistent with those used in measuring the net asset value for transactions with unitholders Accordingly, the opening net asset figure as at January 1, 2013 was restated to reflect accounting policy adjustments made in accordance with IFRS 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time The total increase (decrease) from operations is based on the weighted average number of units outstanding during the period 3 Distributions were paid in cash, reinvested in additional units of the Fund, or both Ratios and Supplemental Data - Class A Units Total Net Asset Value (000s) 4 $ 138,229 $ 92,998 $ 84,327 $ 56,647 $ 37,174 Number of Units Outstanding 4 8,647,324 6,006,965 5,739,621 3,773,743 2,620,404 Management Epense Ratio 5 119% 120% 120% 119% 120% Management Epense Ratio before waivers or absorptions 6 132% 133% 135% 142% 153% Trading Epense Ratio 7 004% 004% 005% 004% 002% Portfolio Turnover Rate % 3054% 3552% 3431% 1938% Net Asset Value per Unit $ 1598 $ 1548 $ 1469 $ 1501 $ This information is presented as at December 31 of the period(s) shown 5 Management epense ratio is based on the total epenses of the fund (ecluding commissions and other portfolio transaction costs), incurred by or allocated to a class of units for the period shown, epressed as an annualized percentage of the daily average net asset value of that class during the period 6 The decision to waive and/or absorb management fees and operating epenses is at the discretion of the Manager The practice of waiving and/or absorbing management fees and operating epenses may continue indefinitely or may be terminated at any time without notice to unitholders 7 The trading epense ratio represents total commissions and other portfolio transaction costs before income taes epressed as an annualized percentage of the daily average net asset value during the period Spreads associated with fied income securities trading are not ascertainable and, for that reason, are not included in the trading epense ratio calculation The trading epense ratio includes the fees attributable to echange traded funds 8 The portfolio turnover rate indicates how actively the portfolio advisor and/or portfolio sub-advisor manages the portfolio investments A portfolio turnover rate of 100% is equivalent to a fund buying and selling all of the securities in its portfolio once in the course of the period The higher a portfolio turnover rate in a period, the greater the trading costs payable by a fund in the period, and the greater the chance of an investor receiving taable capital gains in the year There is not necessarily a relationship between a high turnover rate and the performance of a fund 4

5 CIBC Balanced Inde Fund The Fund's Net Assets per Unit¹ - Premium Class Units Net Assets, beginning of period $ 1170 $ 1111 $ 1135 $ 1072 $ 1027 Increase (decrease) from operations: Total revenue $ 056 $ 053 $ 055 $ 055 $ 095 Total epenses (005) (005) (005) (005) (004) Realized gains (losses) for the period (001) Unrealized gains (losses) for the period (041) Total increase (decrease) from operations 2 $ 080 $ 100 $ 008 $ 091 $ 126 Distributions: From income (ecluding dividends) $ 035 $ 030 $ 039 $ 031 $ 059 From dividends From capital gains Return of capital Total Distributions 3 $ 043 $ 039 $ 048 $ 039 $ 067 Net Assets, end of period $ 1209 $ 1170 $ 1111 $ 1135 $ This information is derived from the Fund's audited annual financial statements The Fund adopted International Financial Reporting Standards (IFRS) on January 1, 2014 Previously, the Fund prepared its financial statements in accordance with Canadian Generally Accepted Accounting Principles (GAAP) as defined in Part V of the CPA Canada Handbook Under Canadian GAAP, the Fund measured fair values of its investments in accordance with CICA Handbook Section 3855 which required the use of bid prices for long positions and ask prices for short positions As such, the net assets per unit figure presented in the financial statements may differ from the net asset value calculated for fund pricing purposes An eplanation of these differences can be found in the notes to the financial statements issued prior to January 1, 2014 Upon adoption of IFRS, the Fund measures the fair value of its investments by using the close market prices, where the close market price falls within the bid-ask spread As such, the Fund's accounting policies for measuring the fair value of investments in the financial statements are consistent with those used in measuring the net asset value for transactions with unitholders Accordingly, the opening net asset figure as at January 1, 2013 was restated to reflect accounting policy adjustments made in accordance with IFRS 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time The total increase (decrease) from operations is based on the weighted average number of units outstanding during the period 3 Distributions were paid in cash, reinvested in additional units of the Fund, or both Ratios and Supplemental Data - Premium Class Units Total Net Asset Value (000s) 4 $ 370,847 $ 177,855 $ 104,490 $ 57,970 $ 25,279 Number of Units Outstanding 4 30,678,456 15,200,501 9,403,800 5,108,231 2,358,604 Management Epense Ratio 5 039% 037% 039% 039% 039% Management Epense Ratio before waivers or absorptions 6 090% 092% 094% 098% 105% Trading Epense Ratio 7 004% 004% 005% 004% 002% Portfolio Turnover Rate % 3054% 3552% 3431% 1938% Net Asset Value per Unit $ 1209 $ 1170 $ 1111 $ 1135 $ This information is presented as at December 31 of the period(s) shown 5 Management epense ratio is based on the total epenses of the fund (ecluding commissions and other portfolio transaction costs), incurred by or allocated to a class of units for the period shown, epressed as an annualized percentage of the daily average net asset value of that class during the period 6 The decision to waive and/or absorb management fees and operating epenses is at the discretion of the Manager The practice of waiving and/or absorbing management fees and operating epenses may continue indefinitely or may be terminated at any time without notice to unitholders 7 The trading epense ratio represents total commissions and other portfolio transaction costs before income taes epressed as an annualized percentage of the daily average net asset value during the period Spreads associated with fied income securities trading are not ascertainable and, for that reason, are not included in the trading epense ratio calculation The trading epense ratio includes the fees attributable to echange traded funds 8 The portfolio turnover rate indicates how actively the portfolio advisor and/or portfolio sub-advisor manages the portfolio investments A portfolio turnover rate of 100% is equivalent to a fund buying and selling all of the securities in its portfolio once in the course of the period The higher a portfolio turnover rate in a period, the greater the trading costs payable by a fund in the period, and the greater the chance of an investor receiving taable capital gains in the year There is not necessarily a relationship between a high turnover rate and the performance of a fund 5

6 CIBC Balanced Inde Fund The Fund's Net Assets per Unit¹ - Institutional Class Units a Net Assets, beginning of period $ 994 $ 943 $ 963 $ 1000 b Increase (decrease) from operations: Total revenue $ 034 $ 042 $ 046 $ 009 Total epenses (003) (003) (003) Realized gains (losses) for the period (001) (003) Unrealized gains (losses) for the period (020) (008) Total increase (decrease) from operations 2 $ 073 $ 087 $ 022 $ (002) Distributions: From income (ecluding dividends) $ 031 $ 025 $ 034 $ 028 From dividends From capital gains Return of capital Total Distributions 3 $ 038 $ 033 $ 042 $ 036 Net Assets, end of period $ 1019 $ 994 $ 943 $ 963 a Information presented is for the period from November 27, 2014 to December 31, 2014 b Initial offering price 1 This information is derived from the Fund's audited annual financial statements The Fund adopted IFRS on January 1, Net assets and distributions are based on the actual number of units outstanding at the relevant time The total increase (decrease) from operations is based on the weighted average number of units outstanding during the period 3 Distributions were paid in cash, reinvested in additional units of the Fund, or both Ratios and Supplemental Data - Institutional Class Units a Total Net Asset Value (000s) 4 $ 104 $ 71 $ 58 $ 57 Number of Units Outstanding 4 10,184 7,156 6,128 5,965 Management Epense Ratio 5 025% 025% 025% 024%* Management Epense Ratio before waivers or absorptions 6 078% 081% 079% 074%* Trading Epense Ratio 7 004% 004% 005% 004% Portfolio Turnover Rate % 3054% 3552% 3431% Net Asset Value per Unit $ 1019 $ 994 $ 943 $ 963 a Information presented is for the period from November 27, 2014 to December 31, 2014 * Ratio has been annualized 4 This information is presented as at December 31 of the period(s) shown 5 Management epense ratio is based on the total epenses of the fund (ecluding commissions and other portfolio transaction costs), incurred by or allocated to a class of units for the period shown, epressed as an annualized percentage of the daily average net asset value of that class during the period 6 The decision to waive and/or absorb management fees and operating epenses is at the discretion of the Manager The practice of waiving and/or absorbing management fees and operating epenses may continue indefinitely or may be terminated at any time without notice to unitholders 7 The trading epense ratio represents total commissions and other portfolio transaction costs before income taes epressed as an annualized percentage of the daily average net asset value during the period Spreads associated with fied income securities trading are not ascertainable and, for that reason, are not included in the trading epense ratio calculation The trading epense ratio includes the fees attributable to echange traded funds 8 The portfolio turnover rate indicates how actively the portfolio advisor and/or portfolio sub-advisor manages the portfolio investments A portfolio turnover rate of 100% is equivalent to a fund buying and selling all of the securities in its portfolio once in the course of the period The higher a portfolio turnover rate in a period, the greater the trading costs payable by a fund in the period, and the greater the chance of an investor receiving taable capital gains in the year There is not necessarily a relationship between a high turnover rate and the performance of a fund 6

7 CIBC Balanced Inde Fund Management Fees The Fund, either directly or indirectly, pays CIBC an annual management fee to cover the costs of managing the Fund Management fees are based on the net asset value of the Fund and are calculated daily and paid monthly Management fees are paid to CIBC in consideration for providing, or arranging for the provision of, management, distribution, and portfolio advisory services Advertising and promotional epenses, office overhead epenses, trailing commissions, and the fees of the portfolio sub-advisor(s) are paid by CIBC out of the management fees received from the Fund The Fund is required to pay applicable taes on the management fees paid to CIBC Refer to the Simplified Prospectus for the annual management fee rate for each class of units The following table shows a breakdown of the services received in consideration of the management fees, as a percentage of the management fees collected from the Fund for the period ended December 31, 2017 These amounts do not include waived fees or absorbed epenses Class A Units Premium Class Units Institutional Class Units Sales and trailing commissions paid to dealers 1531% 3330% 000% General administration, investment advice, and profit 8469% 6670% 10000% Past Performance The performance data provided assumes reinvestment of distributions only and does not take into account sales, redemption, distribution, or other optional charges payable by any unitholder that would have reduced returns Past performance does not necessarily indicate how a fund will perform in the future The Fund s returns are after the deduction of fees and epenses, and the difference in returns between classes of units is primarily due to differences in the management epense ratio See the section entitled Financial Highlights for the management epense ratio Year-by-Year Returns These bar charts show the annual performance of each class of units of the Fund for each of the periods shown, and illustrate how the performance has changed from period to period These bar charts show, in percentage terms, how an investment made on January 1 would have increased or decreased by December 31, unless otherwise indicated Class A Units 200% 100% 00% 137% 94% -09% 58% 101% 87% 14% 79% 61% -100% -200% -138%

8 CIBC Balanced Inde Fund Premium Class Units 200% 150% 100% 66% 110% 95% 88% 70% 50% 28% 22% 00% 11 a a 2011 return is for the period from November 23, 2011 to December 31, 2011 Institutional Class Units 120% 60% 23% 89% 64% 00% -01% -60% -120% 14 a a 2014 return is for the period from November 27, 2014 to December 31, 2014 Annual Compound Returns This table shows the annual compound return of each class of units of the Fund for each indicated period ended on December 31, 2017 The annual compound total return is also compared to the Fund s benchmarks The Fund s primary benchmarks are the FTSE TMX Canada Universe Bond Inde and the S&P/TSX Composite Inde The Fund s blended benchmark (Blended Benchmark) is comprised of the following: 35% FTSE TMX Canada Universe Bond Inde 35% S&P/TSX Composite Inde 15% S&P 500 Total Return Inde 8% FTSE TMX Canada 91 Day TBill Inde 7% MSCI EAFE Inde 8

9 CIBC Balanced Inde Fund 1 Year 3 Years 5 Years 10 Years* or Since Inception* Inception Date Class A units 61% 51% 68% 46% December 4, 1998 S&P/TSX Composite Inde 91% 66% 86% 46% FTSE TMX Canada Universe Bond Inde 25% 26% 30% 47% Blended Benchmark 74% 63% 82% 56% Premium Class units 70% 60% 77% 78% November 23, 2011 S&P/TSX Composite Inde 91% 66% 86% 89% FTSE TMX Canada Universe Bond Inde 25% 26% 30% 34% Blended Benchmark 74% 63% 82% 79% Institutional Class units 64% 59% 56% November 27, 2014 S&P/TSX Composite Inde 91% 66% 63% FTSE TMX Canada Universe Bond Inde 25% 26% 27% Blended Benchmark 74% 63% 62% * If a class of units has been outstanding for less than 10 years, the annual compound return since inception is shown FTSE TMX Canada 91 Day TBill Inde measures the returns attributable to 91-day Treasury Bills FTSE TMX Canada Universe Bond Inde is comprised of marketable Canadian bonds intended to reflect the performance of the broad Canadian investment-grade bond market Returns are calculated daily and are weighted by market capitalization MSCI EAFE Inde is a free float-adjusted market capitalization inde of stocks of companies of developed market equity indices covering countries in Europe, Australia, and the Far East S&P 500 Total Return Inde is a capitalization-weighted inde of 500 stocks, designed to measure performance of the broad US economy representing all major industries S&P/TSX Composite Inde is intended to represent the Canadian equity market and includes the largest companies listed on the TSX A discussion of the Fund's relative performance compared to its primary benchmarks can be found in Results of Operations 9

10 CIBC Balanced Inde Fund Summary of Investment Portfolio (as at December 31, 2017) The summary of investment portfolio may change due to ongoing portfolio transactions of the investment fund A quarterly update is available by visiting wwwcibccom/mutualfunds The Top Positions table shows a fund s 25 largest positions For funds with fewer than 25 positions in total, all positions are shown Cash and cash equivalents are shown in total as one position % of Net Asset Portfolio Breakdown Value Cash & Cash Equivalents 237 Financials 199 Government of Canada & Guaranteed Bonds 125 Provincial Government & Guaranteed Bonds 116 Other Equities 108 Corporate Bonds 91 Energy 62 Materials 37 Margin 19 Municipal Government & Guaranteed Bonds 09 Other Assets, less Liabilities -01 Derivative Liabilities -02 % of Net Asset Value Top Positions Cash & Cash Equivalents 237 United States S&P 500 Mini Inde Future, March ishares MSCI EAFE ETF 70 Royal Bank of Canada 21 Horizons S&P/TSX 60 Inde ETF 20 Toronto-Dominion Bank (The) 19 Bank of Nova Scotia 14 Government of Canada, 350%, 2045/12/01 12 S&P/TSX 60 Inde Future, March Enbridge Inc 12 Canadian National Railway Co 11 Suncor Energy Inc 11 Bank of Montreal 09 Canada Housing Trust No 1, 200%, 2019/12/15 08 BCE Inc 08 Canadian Imperial Bank of Commerce 08 TransCanada Corp 08 Manulife Financial Corp 07 Canada Housing Trust No 1, 195%, 2019/06/15 07 Canadian Natural Resources Ltd 07 Brookfield Asset Management Inc, Class 'A' 07 Canada Housing Trust No 1, 380%, 2021/06/15 06 Government of Canada, 375%, 2019/06/01 06 Canada Housing Trust No 1, 375%, 2020/03/15 05 Canada Housing Trust No 1, Series '71', 125%, 2021/06/

11 "S&P ", and S&P/TSX Composite are trademarks of S&P Global Ratings, a division of S&P Global, and have been licensed for use by CIBC "TSX" is a trademark of TSX, Inc and has been licensed for use by S&P Global Ratings The Fund is not sponsored, endorsed, sold, or promoted by S&P Global Ratings or TSX, Inc and neither S&P Global Ratings nor TSX, Inc make any representation regarding the advisability of investing in the Fund A note on forward-looking statements The management report of fund performance may contain forward-looking statements 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 epects, anticipates, intends, plans, believes, estimates, or other similar wording In addition, any statements that may be made concerning future performance, strategies, or prospects and possible future actions taken by the fund, are also forward-looking statements Forward-looking statements are not guarantees of future performance These statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results and achievements of the fund to differ materially from those epressed or implied by such statements Such factors include, but are not limited to: general economic, market, and business conditions; fluctuations in securities prices, interest rates, and foreign currency echange rates; changes in government regulations; and catastrophic events The above list of important factors that may affect future results is not ehaustive Before making any investment decisions, we encourage you to consider these and other factors carefully CIBC does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise prior to the release of the net management report of fund performance

12 CIBC Mutual Funds CIBC Family of Portfolios CIBC 18 York Street, Suite 1300 Toronto, Ontario M5J 2T8 CIBC Securities Inc Website wwwcibccom/mutualfunds CIBC Securities Inc is a wholly-owned subsidiary of CIBC and is the principal distributor of the CIBC Mutual Funds and the CIBC Family of Portfolios CIBC Family of Portfolios are mutual funds that primarily invest in other CIBC Mutual Funds To obtain a copy of the simplified prospectus, call CIBC Securities Inc at or ask your advisor