Invesco 2017 Annual Management Report of Fund Performance

Transcription

1 Invesco 2017 Annual Management Report of Fund Performance for the period ended

2 Invesco Canada Ltd., All rights reserved. The views of the management of Invesco Canada Ltd. contained in this report are as of the date they were written, and this report is not intended to provide legal, accounting, tax or specific investment advice. Portfolio holdings and allocations are as at, unless otherwise noted. Views, portfolio holdings and allocations may have changed subsequent to this date. For current Fund information, please call or visit our website at invesco.ca. Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Please read the simplified prospectus before investing. The indicated rates of return are the historical and annual compounded total returns, including changes in security value and reinvestment of all dividends/distributions, and do not take into account sales, redemption, dividends/distributions or optional charges, or income taxes payable by any investor, which would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Mutual funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There are no assurances that the money market funds will be able to maintain a constant net asset value per security or that the full amount of your investment will be returned to you. This report includes statements that include information concerning possible or assumed future results of each Fund s operations, earnings, liquidity and cash flows, asset levels, merger activities and the effect of completed merger transactions, regulatory developments, demand for and pricing of each Fund, and general economic and securities market conditions. Such statements may be considered forward-looking statements. When used in this report, words such as believes, expects, anticipates, intends, plans, estimates, projects, and future or conditional verbs such as will, may, could, should and would, or any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, you should carefully consider the areas of risk described in the most recent simplified prospectus of the Funds. You may obtain these documents from the SEDAR website at sedar.com.

3 for the period ended Fund and series details Portfolio management team: Alan Mannik CFA, MBA; Mark Uptigrove CFA, MBA; Clayton Zacharias CFA, CPA, CA Location: Toronto, Canada Sub-advisor: Invesco Advisers, Inc. for the cash portion Fund(s): refers to any of the mutual fund trusts offered under the Invesco Simplified Prospectus. Start Date: refers to the date on which Securities of a particular series of a Fund first became available to the public. Series SC: September 1981 Series A: October 1999 Series D: December 2013 Series F: February 2000 Series I: August 2003 (offered as of January 2003 by way of private placement) Series O: January 2014 Manager: refers to Invesco Canada Ltd., doing business as Invesco. Net assets attributable to Securityholders (Net Asset Value): refers to the value of net assets calculated in accordance with International Financial Reporting Standards (IFRS) as presented in the financial statements which is equal to the value of net assets for purposes of Securityholder transactions (i.e., purchases, switches, redemptions). Securityholder(s): refers to the unitholder(s) of the Fund(s). Securities: refers to the units offered by any of the Funds. Each series of Securities is intended for different types of investors. Series SC and Series A Securities are available to all investors. Series D Securities are available only to investors purchasing through dealers that have a discount brokerage platform and that have signed a Series D agreement with the Manager. Series F Securities are available to investors who have fee-based accounts with their dealer and whose dealer has signed an agreement with the Manager. Series F Securities have a lower management fee than other series Securities of the same Fund because the Manager does not pay any trailing commissions to the dealer. Series F Securities are also available to other groups of investors for whom the Manager does not pay commissions. Series I Securities are special-purpose Securities available only to other Invesco Canada Funds or to eligible institutional investors or other permitted investors; they are not sold to the general public. Each Series I investor negotiates its own management and advisory fee that is paid directly to the Manager. Series I Securities are not generally sold through dealers, and no sales commissions are payable to dealers for selling these Securities. Series O are available, at Invesco Canada s discretion, to eligible investors who invest in the aggregate a minimum of $250,000 in Series O units of our Funds and to eligible institutional investors. Series O units are available only to investors who are purchasing through Dealers who have signed a Series O agreement with us. If you cease to be eligible to invest in Series O units we may switch you to Series A units of the same Fund. Investment objectives and strategies invests in a concentrated portfolio of high-quality businesses run by talented, entrepreneurial management teams, but only makes purchases at attractive prices. Investing primarily in Canadian companies, the portfolio management team (the team ) members view investing as taking ownership stakes in businesses. They seek industry-leading businesses that allocate capital effectively and have a competitive advantage to provide opportunities for long-term growth. Risk The risks associated with investing in this Fund remain as discussed in the Invesco Simplified Prospectus. The Fund continues to be suitable for investors who seek long-term capital growth and are comfortable with medium risk. The Fund s overall level of risk has not changed materially in the past year. This Annual Management Report of Fund Performance contains financial highlights of the Fund, but does not contain either semi-annual or annual financial statements of the Fund. You can get a copy of the semi-annual or annual financial statements at your request, and at no cost, by calling ; writing to us at Invesco at 5140 Yonge Street, Suite 800, Toronto, Ontario, M2N 6X7 or inquiries@invesco.ca; or visiting our website at invesco.ca or SEDAR at sedar.com. Securityholders may also contact us using one of these methods to request a copy of the Fund s proxy voting policies and procedures, proxy voting disclosure record or Quarterly Portfolio Disclosure. 1

4 Results of operations Investment performance The following table summarizes the performance of Trimark Canadian Fund as at. Returns are after expenses have been deducted. These expenses reduce the Fund s returns. 10-year (%) 5-year (%) 3-year (%) 1-year (%) Series SC 1 (C$) General benchmark 2 (C$) Specific benchmark 3 (C$) The series displayed is typically based on factors such as availability to Securityholders, oldest Start Date and largest asset size. Please refer to the Past performance section for the performance of the other series. The performance of the other series offered by the Fund differs from Series SC due largely to the varying level of expenses charged to each series, as explained in the Fund and series details section. Series SC operating expenses are the responsibility of the Manager. 2 The general benchmark is the S&P/TSX Composite Index. 3 The specific benchmark is the 65% S&P/TSX Composite Index/35% MSCI World Index. Performance Over the twelve-month period ended, the Fund underperformed its specific benchmark, the 65% S&P/TSX Composite Index/35% MSCI World Index (see Investment performance table) Currency The portfolio management team does not have a fixed currency-hedging policy for the Fund; however, the team has the flexibility to make currency-hedging decisions from time to time as a means of protecting capital During the period, the team hedged a portion of the Fund s exposure to the U.S. dollar. In aggregate, these hedges contributed approximately 1.3 percentage points to Fund performance Net of currency hedges, the Fund s remaining foreign-currency exposure decreased Fund performance approximately 1.1 percentage points. By comparison, the impact of foreigncurrency movements on the specific benchmark, which is not hedged, decreased its performance by approximately 1.3 percentage points Key contributors to performance The Fund s investments in the materials and industrials sectors outperformed those of the specific benchmark over the period, due to superior security selection The most significant individual contributors to Fund performance over the period included Brookfield Asset Management Inc.; BRP Inc.; Deere & Co.; The Sherwin-Williams Co. and Toromont Industries Ltd. Key detractors from performance Market sentiment for oil and gas has been poor over 2017, and energy companies have been under pressure. The Fund s investments in the energy sector underperformed those of the specific benchmark over the period. The portfolio management team remains comfortable with the energy weighting in the Fund. This sector can be volatile, as evidenced by the Fund s energy investments being the top contributor to Fund outperformance in 2016 The most significant individual detractors from Fund performance over the period included Crew Energy Inc.; Cenovus Energy Inc.; Bonavista Energy Corp.; Aurelius Equity Opportunities SE & Co. and Trilogy Energy Ltd. Portfolio activity As a by-product of the team s bottom-up investment process, market performance and general management activity, the following changes occurred in the Fund s portfolio during the reporting period: o The Fund s information technology and materials sector weightings increased 1.20 and 0.61 percentage points, respectively, over the period, and by period-end comprised approximately 8.72% and 4.86%, respectively, of the Fund o The Fund s energy and consumer discretionary sector weightings decreased 4.00 and 1.54 percentage points, respectively, over the period, and by period-end comprised 9.32% and 7.28%, respectively, of the Fund The Fund s cash, cash equivalents, and money market funds increased 3.40 percentage points over the period and was a weighting of 4.95% of the Fund at period-end Geographically, the Fund portfolio s largest weighting was in Canada, at 55.04% at period-end, reduced 0.68 percentage points from the start of the period The Fund portfolio s weighting in the United States decreased 1.01 percentage points to a 34.07% weighting in the portfolio at period-end. The Fund s remaining foreign exposure decreased 1.82 percentage points to a combined portfolio weighting of 5.93% at period-end Alimentation Couche-Tard Inc. and McKesson Corp. were added to the portfolio over the period. Enerflex Ltd. and Savanna Energy Services Corp. were some of the stocks sold over the period Overall, foreign exposure decreased 2.83 percentage points over the period to a combined portfolio weighting of 40.00% Income, fees and expenses At the Fund level, fluctuation in income and expenses is primarily a result of changes to various drivers of income and expenses, such as average Net Asset Value (NAV), investment activity and account activity, among others During the period: o The average NAV of the Fund was $ million compared to an average NAV of $ million for the 12-month period ended December 31, 2016 o The management expense ratio (MER) increased from 1.86% to 1.87% for Series SC Securityholders. Please refer to the Financial highlights section for the MER of each series o Interest for distribution purposes decreased as a result of a lower level of investment in money market funds generating less interest o Securityholder reporting fees and transfer agent and fund accounting fees decreased primarily due to decrease in average number of accounts o Custody expenses decreased due to a decrease in transaction fees 2

5 o The Manager has absorbed some operating expenses. Such absorptions may be discontinued at any time Securityholder activity For the 12-month period ended, the Fund s NAV decreased 13.71% to $ million from $ million Of this change, an increase of $ million was attributed to operations and a decrease of $ million to net outflows Recent developments as at January 12, 2018 The team believes a fundamental, bottom-up and value-oriented investment approach that provides a sizable margin of safety is well-suited for the current environment. This is based on the view that, broadly speaking, equities are no longer undervalued, particularly those of higher-quality businesses. In the short-term, unanticipated geopolitical events, macroeconomic or other unforeseen factors could adversely impact equity prices and increase downside volatility. The team believes equities may continue to be volatile as issues such as rising interest rates in the U.S., uncertainty over U.S. President Donald Trump s policies, and the U.K. s exit from the European Union, remain areas of concern for investors. In the U.S., the momentum surrounding the Trump administration s tax agenda has accelerated with the passage of lower corporate taxation rates, which are widely expected to contribute to economic growth in The tax overhaul package includes a corporate tax cut from 35% to 21%, accelerated depreciation, a territorial tax system, the repatriation of several hundred billion dollars of overseas earnings and a personal tax cut for all income brackets. Helping to pay for this are less-generous provisions to deduct interest payments and state and local taxes, plus some measures designed to discourage multinational corporations from keeping earnings outside the United States. The economic boost from tax reform, coupled with a benign inflationary environment, should be positive for U.S. GDP growth, through enhanced corporate profitability in the near and medium term. Given this backdrop, team members continue to be vigilant in deploying capital, however the team views downside volatility as an opportunity to selectively upgrade the quality of holdings in the portfolio at attractive valuations with the intent of generating strong long-term returns for investors. While team members do not attempt to predict where markets are heading, they believe the Fund s holdings of quality, well-managed companies are poised to perform well through the market cycle and that unitholders will be rewarded over the long term. Related party transactions The Manager is responsible for the day-to-day operations of the Fund and provides management services to the Fund, including the marketing, promotion and distribution of the Fund; transfer agency services; and Securityholder reporting and servicing. The Fund receives investment advisory services provided by the Manager or affiliates of the Manager. These services are in the normal course of operations and are recorded at the amount of the consideration agreed to by the parties. The cash portion of the Fund is sub-advised by Invesco Advisers, Inc., an affiliate of the Manager. Each Fund pays a management and advisory fee to the Manager, based on the average Net Asset Value of each series of the Fund. Where applicable, the management and advisory fee includes any sub-advisory fee that the Manager pays directly to a sub-advisor and any financing fee the Fund pays to a third party or Invesco Canada Holdings Inc., a related party. The management and advisory fees for Series I are negotiated and paid directly by Series I Securityholders, and not the Fund. The management and advisory fees for Series O are paid directly by the Series O Securityholders, and not the Fund. The Manager may agree to reduce the normal management and advisory fee it charges a Fund in respect of large Securityholders of a Fund based on agreements between the Manager and the Securityholders. The Manager incurs operating expenses on behalf of the Fund and is then reimbursed by the Fund for such expenses. The operating expenses for Series SC and Series I are the responsibility of the Manager. For Series O, the Manager is responsible for paying the operating expenses in exchange for a fixed-rate expense fee. To assist in the discharge of its duties with respect to the Fund, the Manager has appointed the Invesco Canada Funds Advisory Board (the Advisory Board ). The majority of Advisory Board members are independent of the Manager. The Advisory Board reviews the investment performance, investment policies, financial statements, trading policies and other similar matters related to the operations of the Fund, and reports its findings, makes recommendations and gives approvals, as appropriate, to the Manager with respect thereto. In addition, the Manager has appointed the Independent Review Committee (IRC) established under the Canadian Securities Administrators National Instrument Independent Review Committee for Investment Funds. The members of the IRC are the current independent members of the Advisory Board. The mandate of the IRC is to review, and provide input on, the Manager s written policies and procedures that deal with conflict-of-interest matters in respect of the Funds. The IRC may also approve certain mergers involving the Funds and any change in the auditor of the Funds. Additional information about the IRC is available in the Invesco Simplified Prospectus and Annual Information Form. Independent members of the Advisory Board and members of the IRC receive fees for services rendered to the Funds. In the case of certain Funds, the Manager provided start-up investment capital. The Manager s investment in the Funds is recorded at the Net Asset Value per Security of each series, as applicable. Certain of the Funds participated in portfolio transactions with other Funds managed or sub-advised by the Manager. These transactions were executed through market intermediaries and under prevailing market terms and conditions. 3

6 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 financial years ended December 31, if applicable. Series SC December 31, December 31, December 31, December 31, December 31, Series net assets per Security (1) Net Asset Value per Security, beg. of period (2) $ $ $ $ $ Increase/(decrease) from operations Total revenue Total expenses (0.37) (0.32) (0.36) (0.43) (0.38) Realized gains/(losses) 1.04 (5.25) Unrealized gains/(losses) (4.26) (2.24) 3.09 Total increase/(decrease) from operations (2) $ 2.09 $ 2.73 $ (4.05) $ (0.37) $ 4.64 Distributions From income (excluding dividends) From dividends (0.03) (0.02) (0.07) From capital gains (1.10) (0.81) Return of capital Total distributions (2)(3) $ (0.03) $ (0.02) $ $ (1.17) $ (0.81) Net Asset Value per Security, end of period (2) $ $ $ $ $ Ratios/supplemental data Net Asset Value - end of period ($'000) 238, , , , ,066 Number of Securities outstanding - end of period ('000) 10,404 13,346 15,517 18,188 19,499 Management expense ratio (4) 1.87% 1.86% 1.80% 1.77% 1.78% Management expense ratio including fees/expenses waived/absorbed by Manager (4) 1.87% 1.86% 1.80% 1.77% 1.78% Series A December 31, December 31, December 31, December 31, December 31, Series net assets per Security (1) Net Asset Value per Security, beg. of period (2) $ $ $ $ $ Increase/(decrease) from operations Total revenue Total expenses (0.63) (0.56) (0.60) (0.71) (0.64) Realized gains/(losses) 1.07 (5.44) Unrealized gains/(losses) (4.38) (2.32) 3.26 Total increase/(decrease) from operations (2) $ 1.89 $ 2.56 $ (4.38) $ (0.60) $ 4.67 Distributions From income (excluding dividends) From dividends From capital gains (1.18) (0.74) Return of capital Total distributions (2)(3) $ $ $ $ (1.18) $ (0.74) Net Asset Value per Security, end of period (2) $ $ $ $ $ Ratios/supplemental data Net Asset Value - end of period ($'000) 90,049 99, , , ,405 Number of Securities outstanding - end of period ('000) 3,842 4,641 5,596 6,909 7,686 Management expense ratio (4) 2.83% 2.92% 2.71% 2.67% 2.71% Management expense ratio including fees/expenses waived/absorbed by Manager (4) 2.83% 2.92% 2.71% 2.67% 2.71% 4

7 Financial highlights Series D December 31, December 31, December 31, December 31, December 31, Series net assets per Security (1) Net Asset Value per Security, beg. of period (2) $ 9.10 $ 7.86 $ 9.69 $ $ Increase/(decrease) from operations Total revenue Total expenses (0.16) (0.14) (0.15) (0.18) (0.01) Realized gains/(losses) 0.49 (2.03) Unrealized gains/(losses) (1.95) (1.56) 0.35 Total increase/(decrease) from operations (2) $ 1.36 $ 1.33 $ (1.89) $ (0.81) $ 0.34 Distributions From income (excluding dividends) From dividends (0.02) (0.01) (0.04) From capital gains (0.37) Return of capital Total distributions (2)(3) $ (0.02) $ (0.01) $ $ (0.41) $ Net Asset Value per Security, end of period (2) $ $ 9.10 $ 7.86 $ 9.69 $ Ratios/supplemental data Net Asset Value - end of period ($'000) Number of Securities outstanding - end of period ('000) Management expense ratio (4) 1.69% 1.72% 1.64% 1.60% 1.48% Management expense ratio including fees/expenses waived/absorbed by Manager (4) 2.05% 2.00% 1.64% 1.60% 59.79% December 31, December 31, December 31, December 31, December 31, Series net assets per Security (1) Net Asset Value per Security, beg. of period (2) $ $ $ $ $ Increase/(decrease) from operations Total revenue Total expenses (0.18) (0.16) (0.17) (0.20) (0.17) Realized gains/(losses) 0.66 (3.30) Unrealized gains/(losses) (2.94) (1.85) 1.89 Total increase/(decrease) from operations (2) $ 1.46 $ 1.73 $ (2.75) $ (0.60) $ 2.94 Distributions From income (excluding dividends) From dividends (0.08) (0.04) (0.06) (0.12) From capital gains (0.58) (0.43) Return of capital Total distributions (2)(3) $ (0.08) $ (0.04) $ (0.06) $ (0.70) $ (0.43) Net Asset Value per Security, end of period (2) $ $ $ $ $ Ratios/supplemental data Net Asset Value - end of period ($'000) 8,654 6,491 6,681 7,313 5,861 Number of Securities outstanding - end of period ('000) Management expense ratio (4) 1.32% 1.35% 1.28% 1.26% 1.25% Management expense ratio including fees/expenses waived/absorbed by Manager (4) 1.32% 1.35% 1.28% 1.26% 1.25% Series F 5

8 Financial highlights December 31, December 31, December 31, December 31, December 31, Series net assets per Security (1) Net Asset Value per Security, beg. of period (2) $ $ $ $ $ Increase/(decrease) from operations Total revenue Total expenses Realized gains/(losses) 0.65 (3.23) Unrealized gains/(losses) (2.69) (1.48) 1.95 Total increase/(decrease) from operations (2) $ 1.48 $ 1.56 $ (2.33) $ (0.03) $ 3.18 Distributions From income (excluding dividends) From dividends (0.27) (0.33) (0.28) (0.36) (0.24) From capital gains (0.66) (0.60) Return of capital Total distributions (2)(3) $ (0.27) $ (0.33) $ (0.28) $ (1.02) $ (0.84) Net Asset Value per Security, end of period (2) $ $ $ $ $ Ratios/supplemental data Net Asset Value - end of period ($'000) 186, , , , ,512 Number of Securities outstanding - end of period ('000) 13,164 17,444 52,819 56,443 56,200 Management expense ratio (4) ** ** ** ** ** Management expense ratio including fees/expenses waived/absorbed by Manager (4) ** ** ** ** ** Series I Series O December 31, December 31, December 31, December 31, Series net assets per Security (1) Net Asset Value per Security, beg. of period (2) $ 9.02 $ 7.71 $ 9.55 $ Increase/(decrease) from operations Total revenue Total expenses (0.01) (0.01) (0.01) (0.01) Realized gains/(losses) 0.46 (2.31) Unrealized gains/(losses) (1.94) (3.32) Total increase/(decrease) from operations (2) $ 1.17 $ 1.38 $ (1.71) $ (2.41) Distributions From income (excluding dividends) From dividends (0.15) (0.06) (0.16) (0.10) From capital gains (0.19) Return of capital Total distributions (2)(3) $ (0.15) $ (0.06) $ (0.16) $ (0.29) Net Asset Value per Security, end of period (2) $ 9.95 $ 9.02 $ 7.71 $ 9.55 Ratios/supplemental data Net Asset Value - end of period ($'000) 5,767 4,018 2,888 3,390 Number of Securities outstanding - end of period ('000) Management expense ratio *** (4) 0.11% 0.11% 0.11% 0.11% Management expense ratio including fees/expenses waived/absorbed by Manager*** (4) N/A N/A N/A N/A 6

9 Financial highlights Fund level ratios December 31, December 31, December 31, December 31, December 31, Portfolio turnover rate (5) 10.96% 64.90% 31.00% 31.86% 31.65% Trading expense ratio (6) 0.03% 0.22% 0.11% 0.12% 0.15% Management fees The management fees and advisory fees are calculated and accrued daily based on the Net Asset Value of each series of the Fund. For the period ended, a breakdown of the services received in consideration of the management fees as a percentage of the management fees is as follows: Investment management and Distribution costs other fees* Series SC 15.97% 84.03% Series A 35.96% 64.04% Series D 20.12% 79.88% Series F 0.43% 99.57% Series I 0.00% % Series O 0.00% % * Includes profits and general administration fees. ** Negotiated and paid directly by each Series I investor, and not to exceed the Series A management and advisory fee of the Fund. *** Investors pay the management and advisory fee for Series O units directly. The maximum annual management and advisory fee that may be payable to Invesco Canada Ltd. is 0.85%. Institutional investors negotiate the management and advisory fee. Management expense ratio including fees/expenses waived/absorbed by Manager is not applicable as the Series' expenses are made up of a fixed-rate expense fee. (1) This information is derived from the Fund's audited annual financial statements. For purposes of Securityholder purchases, switches and redemptions, the Net Asset Value is calculated in accordance with the valuation rules as set out in the Fund's Invesco Simplified Prospectus and Invesco Annual Information Form. (2) Net Asset Value per Security and distributions are based on the actual number of Securities outstanding at the relevant time. The increase/(decrease) from operations is calculated based on the average number of Securities outstanding over the period. Therefore, the beginning of period Net Asset Value per Security, the increase/(decrease) from operations and distributions, if any, will not sum to the end of period Net Asset Value per Security. (3) Distributions were paid in cash/reinvested in additional Securities of the Fund, or both. For each series, distributions to Securityholders are calculated based on the number of Securities outstanding on the record date for each distribution of that series. (4) For each series, the management expense ratio is calculated based on the total expenses of that series of the Fund (including Goods and Services Tax, Harmonized Sales Tax and interest, but excluding brokerage commissions and other portfolio transaction costs), and is expressed as an annualized percentage of daily average Net Asset Value of that series of the Fund during the period. At its sole discretion, the Manager may waive a portion of the management and advisory fees or absorb a portion of the operating expenses of certain Funds. Such waivers and absorptions can be terminated at any time, but can be expected to continue for certain series of the Funds until such time as these series of the Funds are of sufficient size to reasonably absorb all management and advisory fees and expenses incurred in their operation. (5) The Fund's portfolio turnover rate indicates how actively the Fund's portfolio manager/management team manages its portfolio investments and it relates to the portfolio investments of the Fund as a whole. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of its portfolio investments once in the course of the period. In general, the higher a fund's portfolio turnover rate in a period, the greater the trading costs payable by the fund in the period, and the greater the chance of an investor receiving taxable capital gains in the period. There is not necessarily a relationship between a high turnover rate and the performance of a fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales for the period, excluding money market funds and portfolio investments having maturity dates at acquisition of one year or less, divided by the average market value (at last traded market prices) of the portfolio of investments for the period. Where the reporting period is less than or greater than 12 months, the portfolio turnover rate has not been annualized and will not be comparable to the portfolio turnover rate calculated for reported 12-month periods. (6) The trading expense ratio (TER) represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average Net Asset Value of the Fund during the period and it relates to the Fund as a whole. 7

10 Past performance The following charts show the Fund s past performance. The past performance information shown includes changes in security value; assumes the reinvestment of all distributions; and does not take into account sales, redemption, distribution or optional charges, or income taxes payable by any investor that would have reduced returns. It is important to note that the past performance of the Fund does not tell you how the Fund will perform in the future. Period-by-period returns The following bar charts show you how the Fund s return changes from period to period. They indicate the percentage change in an investment in Series SC, Series A, Series D, Series F, Series I and Series O Securities from the first day to the last day of each financial year shown, as applicable. Series SC Series A 40% % % 0% % 0% % -20% -40% % Series D 40% Series F 40% % 0% % 0% % -20% -40% % Return is for a partial year from Start Date of December 9, 2013 to December 31, Series I 40% 20% Series O 40% 20% % % % -20% -40% % Return is for a partial year from Start Date of January 27, 2014 to December 31,

11 Benchmarks The S&P/TSX Composite Index is a broad-based, market-capitalization-weighted index of the largest and most widely held stocks traded on the Toronto Stock Exchange. The 65% S&P/TSX Composite Index/35% MSCI World Index is a blended index made up of a 65% weighting in the S&P/TSX Composite Index and a 35% weighting in the MSCI World Index. While the Fund uses these indices for long-term performance comparisons, it is not managed relative to the composition of the indices. As a result, the Fund may experience periods when its performance differs from these indices. Please see the Results of operations section of this report for a discussion of recent performance results. Annual compound returns This table compares the Fund s annual compound returns for Series SC, Series A, Series D, Series F, Series I and Series O Securities with the Canadian-dollar returns of the Fund s benchmarks for the periods shown ended. Since Start Date 10-year 5-year 3-year 1-year Series SC (%) N/A Series A (%) N/A Series D (%) Series F (%) N/A Series I (%) N/A Series O (%) S&P/TSX Composite Index (%) % S&P/TSX Composite Index/35% MSCI World Index (%) Reflects the return since Start Date for each series in existence for a period of less than 10 years. Reflects the benchmark return since the Start Date of the Fund s series for a period of less than 10 years. Series SC Series A Series D Series F Series I Series O S&P/TSX Composite Index (%) N/A N/A 8.13 N/A N/A % S&P/TSX Composite Index/35% MSCI World Index (%) N/A N/A N/A N/A

12 Summary of investment portfolio as at The Summary of investment portfolio may change due to ongoing portfolio transactions. Updates are available at invesco.ca for quarterly periods where an annual or semi-annual report is not published. For more information, please contact us at or Top 25 holdings Security/issuer name % of Net Asset Value 1. Brookfield Asset Management Inc. 8.04% 2. The Bank of Nova Scotia 5.87% 3. Royal Bank of Canada 5.57% 4. Canadian Dollar Cash Management Fund 4.90% 5. Power Corp. of Canada 4.84% 6. Berkshire Hathaway Inc. 4.27% 7. The Toronto-Dominion Bank 4.14% 8. Wells Fargo & Co. 3.82% 9. Zimmer Biomet Holdings, Inc. 3.25% 10. Brenntag AG 3.24% 11. Oracle Corp. 3.13% 12. Maxar Technologies Ltd. 3.07% 13. Open Text Corp. 3.02% 14. Deere & Co. 3.00% 15. Hyundai Motor Co. 2.69% 16. Axalta Coating Systems Ltd. 2.67% 17. Toromont Industries Ltd. 2.62% 18. Microsoft Corp. 2.57% 19. CarMax, Inc. 2.52% 20. Fairfax Financial Holdings Ltd. 2.46% 21. Expeditors International of Washington, Inc. 2.46% 22. Canadian Natural Resources Ltd. 2.35% 23. Total Energy Services Inc. 2.33% 24. Oaktree Capital Group, LLC 2.28% 25. The Sherwin-Williams Co. 2.19% Aggregate % of top holdings 87.30% Sector allocation Financials 43.31% Industrials 14.39% Energy 9.32% Information technology 8.72% Consumer discretionary 7.28% Cash, cash equivalents and money market funds 4.95% Materials 4.86% Consumer staples 3.91% Health care 3.25% Other net assets 0.01% Total sector allocation % Geographic allocation Canada 55.04% United States 34.07% Cash, cash equivalents and money market funds 4.95% Germany 3.24% South Korea 2.69% Other net assets 0.01% Total geographic allocation % Cash and cash equivalents include Canadian and foreign cash, as well as all indebtedness maturing within 90 days from the date of acquisition. 10

13 Notes: 11

14 Notes: 12

15 About Invesco Ltd. Invesco Ltd. is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. NYSE: IVZ; invesco.com.

16 Contact us Invesco 5140 Yonge Street, Suite 800 Toronto, Ontario M2N 6X7 Telephone: or Facsimile: or invesco.ca The Fund s management reports of fund performance and financial statements will be available online at invesco.ca or at sedar.com. If you have any questions, please call us at or us at inquiries@invesco.ca. Invesco is a registered business name of Invesco Canada Ltd. * Invesco and all associated trademarks are trademarks of Invesco Holding Company Limited, used under licence. PowerShares and all associated trademarks are trademarks of Invesco PowerShares Capital Management LLC, used under licence. Trimark and all associated trademarks are trademarks of Invesco Canada Ltd. Invesco Canada Ltd., 2018 ARMCDFE(03/18) 0020