Enhanced Income Corporate Class

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 United Financial, 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 primary investment objective of the (the Fund ) is to maximize performance through current income and capital appreciation while maintaining safety of capital through direct and indirect investments primarily in corporate bonds, income trusts, and other income-generating securities. The advisor may also choose to invest a portion of the assets in securities denominated in foreign currencies and/or in securities issued by foreigners and may invest in other mutual funds. Using techniques such as fundamental analysis to assess investment opportunities, the portfolio advisor allocates the Fund s assets among government bonds, corporate bonds, debentures, mortgages, income trusts, preferred stocks, common stocks, and other income-generating securities issued by Canadian and foreign issuers. Corporate bonds may include those that have a low credit rating or are unrated, but offer a higher yield than investment grade bonds, invested up to a predetermined level. the reference index of the Fund. We believe that the new blended benchmark better reflects the nature of the Fund. The performance of the Fund s other classes is substantially similar to that of Class A shares, 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 may use derivatives, but only as permitted by securities regulations. The Fund may also enter into securities lending transactions, repurchase transactions and reverse repurchase transactions, to the extent permitted by securities regulations, to earn additional income. In the event of adverse market conditions, the portfolio advisor may invest in short-term fixed income securities or cash equivalents. 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. The Fund may, from time to time, engage in active and frequent trading of investments. This increases the possibility that an investor will receive taxable capital gain. It can also increase trading costs, which will reduce the Fund s performance. 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. This Fund is suitable for investors who want a low to medium risk investment with the potential for capturing some capital growth and have a medium term investment horizon. RESULTS OF OPERATIONS The net asset value of the Fund increased by $67.1 million to $623.8 million from March 31, 2017 to March 31, The Fund had net sales of $67.6 million during. The portfolio s performance increased assets by $3.9 million. The Fund paid distributions totalling $4.4 million. Class A shares returned -1.4% after fees and expenses for the one-year period ended March 31, Over the same time period, the Fund s benchmarks returned 4.2% and 0.1%, respectively. The benchmarks are a combination of the Bank of America Merrill Lynch U.S. High Yield Return Index - 40%, the S&P/TSX Composite Return Index- 20%, the MSCI World Return Index - 20% and the FTSE TMX Canada Universe Bond Return Index - 20% (new) and a combination of the S&P/TSX Composite High Dividend Return Index - 67% and the Bank of America Merrill Lynch U.S. High Yield Return Index - 33% (old). During we changed 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. Overall, the Fund underperformed its benchmark for 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. CIG

2 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 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 and Registrar CI Investments Inc. is the Manager, Portfolio Advisor and Registrar of the Fund. CI Investments Inc. is a subsidiary of CI Financial Corp. The Manager, in consideration for management fees, provided 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. fee and fixed administration fee rates as at March 31, 2018, for each of the classes are shown below: Annual management fee rate (%) Annual fixed administration fee rate (%) A Shares E Shares 1.650* 0.20 E2 Shares E3 Shares E4 Shares E5 Shares ET8 Shares 1.650* 0.20 E2T8 Shares E3T8 Shares E4T8 Shares E5T8 Shares F Shares 0.650* 0.20 F2 Shares F3 Shares F4 Shares F5 Shares FT8 Shares 0.650* 0.20 F2T8 Shares F3T8 Shares F4T8 Shares Annual management fee rate (%) Annual fixed administration fee rate (%) F5T8 Shares I Shares Paid directly by investor - IT8 Shares Paid directly by investor - OF Shares W Shares Paid directly by investor 0.20 WT8 Shares Paid directly by investor 0.20 *Effective July 27, 2017, the annual management fee rate was reduced for E Shares from 1.75% to 1.65%, for ET8 Shares from 1.75% to 1.65%, for F Shares from 0.75% to 0.65% and for FT8 Shares from 0.75% to 0.65%. The Manager received $0.7 million in management fees and $0.7 million in fixed administration fees for. Fees Approximately 24% of total management fees were used to pay for sales and trailing commissions and other services required. The remaining 76% of management fees were used to pay for investment management and other general administration. 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 ended March 31, 2018 the Fund executed inter-fund trades. Principal Distributor The Manager has the exclusive right to arrange for the distribution of shares of the Fund. Pursuant to a series of agreements, the right to distribute such shares has been granted, on a collective basis, to the following dealers, each of which is an affiliate of the Manager. Assante Capital Ltd. Assante Financial Ltd. 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. 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

3 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. 3

4 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 Share ($) (1) (2) (4) * Increase (decrease) from operations: Dividends: Realized Unrealized increase net investment Net assets Net assets at the beginning of year (2) revenue expenses distributions) (decrease) from operations (2) income ) capital Return of capital (2, 3) at the end of shown (2) $ $ $ $ $ $ $ $ $ $ $ $ A Shares Commencement of operations October 22, 2007 Mar. 31, (0.38) 0.05 (0.50) (0.18) - - (0.03) - (0.03) Mar. 31, (0.37) (0.01) (0.41) - (0.42) Mar. 31, (0.35) 0.24 (1.75) (1.09) - (0.06) (0.22) - (0.28) Mar. 31, (0.35) (0.07) (0.18) - (0.25) Mar. 31, (0.33) (0.18) - - (0.18) E Shares Commencement of operations September 26, 2008 Mar. 31, (0.35) 0.06 (0.30) (0.03) - (0.03) Mar. 31, (0.35) (0.01) (0.43) - (0.44) Mar. 31, (0.33) 0.18 (1.74) (1.07) - (0.06) (0.23) - (0.29) Mar. 31, (0.33) (0.08) (0.19) - (0.27) Mar. 31, (0.31) (0.18) - - (0.18) E2 Shares Mar. 31, (0.21) 0.01 (0.54) (0.29) - - (0.02) - (0.02) 9.72 E3 Shares Mar. 31, (0.21) 0.01 (0.52) (0.27) - - (0.02) - (0.02) 9.73 E4 Shares Mar. 31, (0.20) 0.02 (0.52) (0.25) - - (0.02) - (0.02) 9.73 E5 Shares Mar. 31, (0.20) 0.01 (0.51) (0.25) - - (0.02) - (0.02) 9.74 *Footnotes for the tables are found at the end of the Net Assets per Share section of the Financial Highlights.

5 Net Assets per Share ($) (1) (2) (4) * Increase (decrease) from operations: Dividends: Realized Unrealized increase net investment Net assets Net assets at the beginning of year (2) revenue expenses distributions) (decrease) from operations (2) income ) capital Return of capital (2, 3) at the end of shown (2) $ $ $ $ $ $ $ $ $ $ $ $ ET8 Shares Commencement of operations June 22, 2011 Mar. 31, (0.17) 0.04 (0.18) (0.01) (0.61) (0.62) 6.83 Mar. 31, (0.19) (0.22) (0.66) (0.88) 7.52 Mar. 31, (0.19) (0.58) (0.41) (0.63) - (0.04) (0.13) (0.73) (0.90) 7.93 Mar. 31, (0.21) (0.05) (0.11) (0.76) (0.92) 9.44 Mar. 31, (0.21) (0.12) - (0.77) (0.89) 9.65 E2T8 Shares Mar. 31, (0.21) 0.02 (0.49) (0.25) - - (0.02) (0.72) (0.74) 9.01 E3T8 Shares Mar. 31, (0.19) (0.02) (0.76) (0.55) - - (0.02) (0.72) (0.74) 9.01 E4T8 Shares Mar. 31, (0.19) 0.02 (0.41) (0.15) - - (0.02) (0.72) (0.74) 9.02 E5T8 Shares Mar. 31, (0.19) 0.01 (0.49) (0.24) - - (0.02) (0.72) (0.74) 9.03 F Shares Mar. 31, (0.12) (0.08) (0.42) (0.14) - - (0.02) - (0.02) 9.80 *Footnotes for the tables are found at the end of the Net Assets per Share section of the Financial Highlights.

6 Net Assets per Share ($) (1) (2) (4) * Increase (decrease) from operations: Dividends: Realized Unrealized increase net investment Net assets Net assets at the beginning of year (2) revenue expenses distributions) (decrease) from operations (2) income ) capital Return of capital (2, 3) at the end of shown (2) $ $ $ $ $ $ $ $ $ $ $ $ F2 Shares Mar. 31, (0.11) - (0.51) (0.14) - - (0.02) - (0.02) 9.82 F3 Shares Mar. 31, (0.12) (0.05) (0.42) (0.10) - - (0.02) - (0.02) 9.83 F4 Shares Mar. 31, (0.11) (0.03) (0.30) (0.02) - (0.02) 9.83 F5 Shares Mar. 31, (0.10) 0.01 (0.50) (0.15) - - (0.02) - (0.02) 9.84 FT8 Shares Mar. 31, (0.11) (0.11) (0.54) (0.19) - - (0.02) (0.72) (0.74) 9.11 F2T8 Shares Mar. 31, (0.11) 0.01 (0.33) (0.02) (0.72) (0.74) 9.11 *Footnotes for the tables are found at the end of the Net Assets per Share section of the Financial Highlights.

7 Net Assets per Share ($) (1) (2) (4) * Increase (decrease) from operations: Dividends: Realized Unrealized increase net investment Net assets Net assets at the beginning of year (2) revenue expenses distributions) (decrease) from operations (2) income ) capital Return of capital (2, 3) at the end of shown (2) $ $ $ $ $ $ $ $ $ $ $ $ F3T8 Shares Mar. 31, (0.11) 0.06 (0.55) (0.21) - - (0.02) (0.72) (0.74) 9.11 F4T8 Shares Mar. 31, (0.10) 0.01 (0.49) (0.15) - - (0.02) (0.72) (0.74) 9.11 F5T8 Shares Mar. 31, (0.09) 0.01 (0.49) (0.14) - - (0.02) (0.72) (0.74) 9.12 I Shares Commencement of operations September 8, 2008 Mar. 31, (0.05) 0.05 (0.65) (0.04) - (0.04) Mar. 31, (0.03) (0.01) (0.50) - (0.51) Mar. 31, (1.84) (0.81) - (0.07) (0.26) - (0.33) Mar. 31, (0.09) (0.21) - (0.30) Mar. 31, (0.20) - - (0.20) IT8 Shares Commencement of operations June 22, 2011 Mar. 31, (0.03) 0.02 (0.32) (0.02) (0.71) (0.73) 8.16 Mar. 31, (0.01) (0.26) (0.76) (1.02) 8.80 Mar. 31, (0.47) (0.62) (0.52) - (0.04) (0.15) (0.82) (1.01) 9.06 Mar. 31, (0.05) (0.12) (0.83) (1.00) Mar. 31, (0.13) - (0.82) (0.95) OF Shares Commencement of operations May 22, 2008 Mar. 31, (0.24) 0.04 (0.72) (0.18) - - (0.03) - (0.03) Mar. 31, (0.22) (0.01) (0.43) - (0.44) Mar. 31, (0.20) (0.22) (1.31) (0.91) - (0.06) (0.23) - (0.29) Mar. 31, (0.20) (0.07) (0.18) - (0.25) Mar. 31, (0.18) (0.18) - - (0.18) *Footnotes for the tables are found at the end of the Net Assets per Share section of the Financial Highlights.

8 Net Assets per Share ($) (1) (2) (4) Increase (decrease) from operations: Dividends: Realized Unrealized increase net investment Net assets Net assets at the beginning of year (2) revenue expenses distributions) (decrease) from operations (2) income ) capital Return of capital (2, 3) at the end of shown (2) $ $ $ $ $ $ $ $ $ $ $ $ W Shares Commencement of operations October 22, 2007 Mar. 31, (0.09) 0.05 (0.65) (0.04) - (0.04) Mar. 31, (0.07) (0.01) (0.51) - (0.52) Mar. 31, (0.04) (0.02) (1.76) (0.87) - (0.07) (0.26) - (0.33) Mar. 31, (0.04) (0.09) (0.21) - (0.30) Mar. 31, (0.03) (0.20) - - (0.20) WT8 Shares Commencement of operations June 22, 2011 Mar. 31, (0.04) 0.03 (0.31) (0.02) (0.69) (0.71) 7.88 Mar. 31, (0.03) (0.25) (0.73) (0.98) 8.52 Mar. 31, (0.02) (0.08) (0.90) (0.46) - (0.04) (0.14) (0.80) (0.98) 8.79 Mar. 31, (0.02) (0.05) (0.12) (0.81) (0.98) Mar. 31, (0.02) (0.13) - (0.81) (0.94) (1) This information is derived from the Fund s audited annual financial statements. (2) Net assets per share and per share are based on the actual number of shares outstanding for the relevant class at the relevant time. The increase (decrease) in net assets from operations per share is based on the weighted average number of shares outstanding for the relevant class over the fiscal year. (3) Dividends are automatically reinvested in additional shares of the Fund. (4) This information is provided for s ended March 31.

9 Ratios and Supplemental Data (1) (5) * net assets (5) Number of shares outstanding (5) before taxes (2) after taxes (2) Effective HST rate for the year (2) Harmonized Trading Portfolio sales tax (2) (3) turnover rate (4) $000 s 000 s % % % % % % A Shares Commencement of operations October 22, 2007 Mar. 31, Mar. 31, Mar. 31, Mar. 31, Mar. 31, E Shares Commencement of operations September 26, 2008 Mar. 31, ,212 1, Mar. 31, ,258 2, Mar. 31, ,292 2, Mar. 31, ,290 2, Mar. 31, ,127 1, E2 Shares Mar. 31, , E3 Shares Mar. 31, , E4 Shares Mar. 31, , E5 Shares Mar. 31, , *Footnotes for the tables are found at the end of the Financial Highlights section.

10 Ratios and Supplemental Data (1) (5) * net assets (5) Number of shares outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $000 s 000 s % % % % % % ET8 Shares Commencement of operations June 22, 2011 Mar. 31, Mar. 31, , Mar. 31, , Mar. 31, Mar. 31, E2T8 Shares Mar. 31, E3T8 Shares Mar. 31, E4T8 Shares Mar. 31, E5T8 Shares Mar. 31, F Shares Mar. 31, , *Footnotes for the tables are found at the end of the Financial Highlights section.

11 Ratios and Supplemental Data (1) (5) * net assets (5) Number of shares outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $000 s 000 s % % % % % % F2 Shares Mar. 31, , F3 Shares Mar. 31, , F4 Shares Mar. 31, , F5 Shares Mar. 31, FT8 Shares Mar. 31, F2T8 Shares Mar. 31, *Footnotes for the tables are found at the end of the Financial Highlights section.

12 Ratios and Supplemental Data (1) (5) * net assets (5) Number of shares outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $000 s 000 s % % % % % % F3T8 Shares Mar. 31, F4T8 Shares Mar. 31, F5T8 Shares Mar. 31, I Shares Commencement of operations September 8, 2008 Mar. 31, ,071 13, Mar. 31, ,782 12, Mar. 31, ,567 9, Mar. 31, ,696 7, Mar. 31, ,275 5, IT8 Shares Commencement of operations June 22, 2011 Mar. 31, , Mar. 31, , Mar. 31, , Mar. 31, , Mar. 31, , OF Shares Commencement of operations May 22, 2008 Mar. 31, Mar. 31, Mar. 31, Mar. 31, Mar. 31, *Footnotes for the tables are found at the end of the Financial Highlights section.

13 Ratios and Supplemental Data (1) (5) net assets (5) Number of shares outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $000 s 000 s % % % % % % W Shares Commencement of operations October 22, 2007 Mar. 31, ,654 17, Mar. 31, ,828 15, Mar. 31, ,738 13, Mar. 31, ,983 9, Mar. 31, ,069 8, WT8 Shares Commencement of operations June 22, 2011 Mar. 31, ,802 3, Mar. 31, ,402 3, Mar. 31, ,178 2, Mar. 31, ,695 1, Mar. 31, , (1) This information is derived from the Fund s audited annual financial statements. (2) is calculated based on expenses charged to the Fund commissions and other portfolio transaction costs) and is expressed as an annualized percentage of daily average net assets for, 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 shareholder residency and can be different from 13%. (3) The trading represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net assets during, 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, and the greater the chance of an investor receiving taxable capital in. 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, 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. (5) This information is provided for s ended March 31.

14 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 made by the Fund in s shown were reinvested in additional shares 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 s 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. A Shares E Shares ET8 Shares I Shares 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 Mar Mar Mar Mar Mar Mar IT8 Shares OF Shares W Shares WT8 Shares 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 Mar Mar Mar return is for the period from September 26, 2008 to March 31, return is for the period from June 22, 2011 to March 31, return is for the period from September 8, 2008 to March 31, return is for the period from May 22, 2008 to March 31, 2009.

15 Annual Compound Returns The following table shows the Fund s annual compound returns for each year indicated, compared to the Blended Index (new) composed of: (40% - Bank of America Merrill Lynch U.S. High Yield Return Index, 20% - FTSE TMX Canada Universe Bond Return Index, 20% - MSCI World Return Index and 20% - S&P/TSX Composite Return Index) and the Blended Index (old) composed of (67% - S&P/TSX Composite High Dividend Return Index and 33% - Bank of America Merrill Lynch U.S. High Yield Return Index); the Bank of America Merrill Lynch U.S. High Yield Return Index, FTSE TMX Canada Universe Bond Return Index, MSCI World Return Index, S&P/TSX Composite Return Index and the S&P/TSX Composite High Dividend Return Index. The Bank of America Merrill Lynch U.S. High Yield 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 FTSE TMX Canada Universe Bond 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. The MSCI World Return Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The Index consists of the following 23 developed market country indices: 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. The S&P/TSX Composite Return Index is a float-adjusted market capitalization weighted index which is the principal broad measure of the Canadian equity market. It includes common stocks and income trust units of companies incorporated in Canada which are listed on the Toronto Stock Exchange. The S&P/TSX Composite High Dividend 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. 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 (%) A Shares (1.4) (0.9) n/a Blended Index (new) n/a Blended Index (old) n/a Bank of America Merrill Lynch U.S. High Yield Return Index n/a FTSE TMX Canada Universe Bond Return Index n/a MSCI World Return Index n/a S&P/TSX Composite Return Index n/a S&P/TSX Composite High Dividend Return Index (1.6) n/a E Shares (1.0) (0.6) 2.8 n/a 5.1 Blended Index (new) n/a 8.7 Blended Index (old) n/a 8.4 Bank of America Merrill Lynch U.S. High Yield Return Index n/a 10.3 FTSE TMX Canada Universe Bond Return Index n/a 4.7 MSCI World Return Index n/a 11.1 S&P/TSX Composite Return Index n/a 6.0 S&P/TSX Composite High Dividend Return Index (1.6) n/a 7.3 ET8 Shares (0.9) (0.7) 2.8 n/a 3.8 Blended Index (new) n/a 7.3 Blended Index (old) n/a 5.8 Bank of America Merrill Lynch U.S. High Yield Return Index n/a 6.3 FTSE TMX Canada Universe Bond Return Index n/a 3.8 MSCI World Return Index n/a 14.3 S&P/TSX Composite Return Index n/a 5.2 S&P/TSX Composite High Dividend Return Index (1.6) n/a

16 One Year (%) Three Years (%) Five Years (%) Ten Years (%) Since Inception (%) I Shares n/a 7.0 Blended Index (new) n/a 8.7 Blended Index (old) n/a 8.4 Bank of America Merrill Lynch U.S. High Yield Return Index n/a 10.3 FTSE TMX Canada Universe Bond Return Index n/a 4.7 MSCI World Return Index n/a 11.1 S&P/TSX Composite Return Index n/a 6.0 S&P/TSX Composite High Dividend Return Index (1.6) n/a 7.3 IT8 Shares n/a 6.6 Blended Index (new) n/a 7.3 Blended Index (old) n/a 5.8 Bank of America Merrill Lynch U.S. High Yield Return Index n/a 6.3 FTSE TMX Canada Universe Bond Return Index n/a 3.8 MSCI World Return Index n/a 14.3 S&P/TSX Composite Return Index n/a 5.2 S&P/TSX Composite High Dividend Return Index (1.6) n/a 5.4 OF Shares (0.3) n/a 4.8 Blended Index (new) n/a 7.0 Blended Index (old) n/a 6.9 Bank of America Merrill Lynch U.S. High Yield Return Index n/a 8.5 FTSE TMX Canada Universe Bond Return Index n/a 4.5 MSCI World Return Index n/a 8.7 S&P/TSX Composite Return Index n/a 3.5 S&P/TSX Composite High Dividend Return Index (1.6) n/a 5.9 W Shares n/a Blended Index (new) n/a Blended Index (old) n/a Bank of America Merrill Lynch U.S. High Yield Return Index n/a FTSE TMX Canada Universe Bond Return Index n/a MSCI World Return Index n/a S&P/TSX Composite Return Index n/a S&P/TSX Composite High Dividend Return Index (1.6) n/a WT8 Shares n/a 6.1 Blended Index (new) n/a 7.3 Blended Index (old) n/a 5.8 Bank of America Merrill Lynch U.S. High Yield Return Index n/a 6.3 FTSE TMX Canada Universe Bond Return Index n/a 3.8 MSCI World Return Index n/a 14.3 S&P/TSX Composite Return Index n/a 5.2 S&P/TSX Composite High Dividend Return Index (1.6) n/a

17 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 Fund(s) U.S.A Canada Cash & Equivalents Exchange-Traded Fund(s) U.K Australia Bermuda Other Net Assets (Liabilities) Switzerland Spain Sweden France Luxembourg Netherlands Cayman Islands Belgium Jersey Island British Virgin Islands Germany Marshall Islands Bahamas Ireland St. Lucia Brazil Foreign Currency Forward Contracts... (0.3) Sector allocation Fund(s) Corporate Bonds Cash & Equivalents Energy Exchange-Traded Fund(s) Real Estate Financials Utilities Industrials Consumer Discretionary Other Net Assets (Liabilities) Consumer Staples Private Placements Preferred Shares Materials Warrants Foreign Currency Forward Contracts... (0.3) CI Income Fund (Class I) Signature High Yield Bond II Fund (Class I) Signature Global Bond Fund (Class I) Cash & Equivalents Signature Tactical Bond Pool (Class I) SPDR S&P 500 ETF Trust SPDR Gold Trust ishares U.S. Real Estate ETF Wells Fargo & Co Pembina Pipeline Corp The Williams Co., Inc Cheniere Energy Inc Brookfield Asset Inc., Class A Transurban Group Royal Dutch Shell PLC Allied Properties Real Estate Investment Trust Brookfield Property Partners L.P. (USD) 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 Net Assets (in $000 s) $623,750 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. 17