MACKENZIE FLOATING RATE INCOME FUND

Transcription

1 Annual Management Report of Fund Performance For the Year Ended March 31, This Annual Management Report of Fund Performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You may obtain a copy of the annual financial statements, at no cost, by contacting us using one of the methods noted under Fund Formation and Series Information or by visiting the SEDAR website at Securityholders may also contact us using one of these methods to request a copy of the investment fund s interim financial report, proxy voting policies and procedures, proxy voting disclosure record or quarterly portfolio disclosure. Every effort has been made to ensure that the information contained in this report is accurate as of the dates indicated in the report; however, the Fund cannot guarantee the accuracy or the completeness of this material. For more information, please refer to the Fund s Simplified Prospectus, Annual Information Form and Fund Facts, which may also be obtained, at no cost, using any of the methods outlined above. For the Fund s current net asset values per security and for more recent information on general market events, please visit our website. A NOTE ON FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements that reflect our current expectations or forecasts of future events. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as expects, anticipates, intends, plans, believes, estimates, preliminary, typical and other similar expressions. In addition, these statements may relate to future corporate actions, future financial performance of a fund or a security and their future investment strategies and prospects. Forward-looking statements are inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual events, results, performance or prospects to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, the volatility of global equity and capital markets, business competition, technological change, changes in government regulations, changes in securities laws and regulations, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events and the ability of Mackenzie to attract or retain key employees. The foregoing list of important risks, uncertainties and assumptions is not exhaustive. Please consider these and other factors carefully and do not place undue reliance on forward-looking statements. The forward-looking information contained in this report is current only as of the date of this report. There should not be an expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.

2 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, Management Discussion of Fund Performance June 6, This Management Discussion of Fund Performance presents the portfolio management team s view on the significant factors and developments during the period ended March 31,, that have affected the Fund s performance and outlook. If the Fund was established during the period, period represents the period from inception to the end of the fiscal period. For information on the Fund s longer-term performance, as applicable, please refer to the Past Performance section of the report. In this report, Mackenzie refers to Mackenzie Financial Corporation, the manager of the Fund. In addition, net asset value ( NAV ) refers to the value of the Fund as calculated for transaction purposes, on which the discussion of Fund performance is based. Investment Objective and Strategies The Fund seeks current income by investing primarily in floating-rate debt obligations and other floating-rate debt instruments of issuers anywhere in the world. Risk The risks of the Fund remain as discussed in the Fund s Simplified Prospectus. The Fund is suitable for short- to medium-term investors looking for the income potential of floating-rate instruments linked to interest rate changes to hold as part of their portfolio to diversify their fixed income holdings, who can handle the volatility of bond markets and who have a low to medium tolerance for risk. Results of Operations Investment Performance The performance of the Fund s Series SC and Quadrus Series securities is discussed below. The performance of all series is shown in the Past Performance section of the report. Where series returns differ, it is primarily because different levels of fees and expenses were charged to each series, or because securities of a series were not issued and outstanding for the entire reporting period. Please refer to the Fund Formation and Series Information section of this report for the varying management and administration fees payable by each series. During the year, the Fund s Series SC securities returned 13.6% and Quadrus Series securities returned 13.3% (after deducting fees and expenses paid by the series). This compares with a return of 1.5% for the Fund s broad-based index, the FTSE TMX Canada Universe Bond Index, and a return of 9.5% for the Fund s new narrow index, the S&P/LSTA Leveraged Loan (Hedged) Index. The new narrow index better represents the Fund s hedging strategy. It replaces the Fund s previous narrow index, the S&P/LSTA Leveraged Loan Index (returned 12.5%). All index and series returns are calculated on a total return basis in Canadian dollar terms. Investors cannot invest in the index without incurring fees, expenses and commissions, which are not reflected in the index returns. Leveraged loans performed well over the year. Investors favoured riskier assets generally and term loans in particular in response to increased economic growth, higher policy rates and expectations of pro-growth policies in the United States. Fund flows to the asset class during the second half of the year were at levels last seen in Lower-quality issues outperformed higher-quality non-investment grade ones. As the London Inter-Bank Offered Rate rose above the average floor rate of 1.00%, most leveraged loans began to float. The Fund outperformed the broad-based index because high-yield bonds and term loans outperformed federal and provincial bonds. Given the Fund s mandate, the return of a narrow index is a more meaningful comparison. The Fund outperformed both the new narrow index and the previous narrow index primarily because of its holdings in high-yield bonds, which outperformed term loans over the year. Also contributing to performance were overweight exposures to second-lien loans and term loans rated B. The Fund hedged most of its foreign currency exposure, which detracted from performance relative to the previous narrow index as the U.S. dollar appreciated relative to the Canadian dollar. Relative to the new narrow index, the Fund benefited from partial exposure to the U.S. dollar. Over the year, portfolio activity and market effect resulted in increased exposure to floating-rate term loans, while exposure to high-yield bonds was reduced. Net Assets The Fund s NAV increased by 26.9% to $511.9 million at March 31,, from $403.5 million at March 31,. This change was composed primarily of $56.3 million in net income (including dividend and interest income) from investment performance, after deducting fees and expenses, $57.5 million in net sales, and $5.3 million in cash distributions. See Other Related Party Transactions for the percentage of the Fund s NAV owned by Mackenzie, affiliates of Mackenzie and funds managed by Mackenzie. As a result of these investments, the Fund is subject to large transaction risk as discussed in the Prospectus. Mackenzie manages this risk to reduce the possibility of any adverse effect on the Fund or on its investors, through such processes as requiring advance notice of large redemptions. At March 31,, Mackenzie had received no such notices. Fees and Expenses The management expense ratio ( MER ) for Series SC of 1.76% during the year ended March 31,, was unchanged from the MER for the year ended March 31,. The MER for Quadrus Series of 2.02% during the year ended March 31,, was slightly higher than the MER of 2.01% for the year ended March 31,. The MERs (before and after waivers or absorptions, if any) for each series are presented in the Financial Highlights section of this report. The MERs for Series FB and Series PWT8 decreased due to a decrease in fund costs. The MER for Series T6 increased due to an increase in fund costs.

3 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, Recent Developments The portfolio management team believes yields could drift modestly higher in the second and third calendar quarters of, although an upward trend could be slowed by the uncertainty arising from the United Kingdom s negotiations with the European Union or any hitches in the U.S. growth agenda. With the Bank of Canada continuing to hold rates steady, rising yields could put some downward pressure on the Canadian dollar relative to the U.S. dollar. In this scenario, the team believes investment grade corporate bonds, high-yield bonds and term loans are poised to outperform government bonds. The team notes, however, that the risk for the higher-yield markets lies in their valuations, which rose during the first calendar quarter. Should growth expectations lessen, some overpriced bonds could fall modestly in price. The team generally expects higher-yield investments to earn approximately their carrying yields over the near term. Related Party Transactions The following arrangements result in fees paid by the Fund to Mackenzie or to companies affiliated with the Fund. Management and Administration Services For each applicable series, the Fund paid management fees and administration fees to Mackenzie at the annual rates specified under Fund Formation and Series Information in this report and as more fully described in the Prospectus. In return for the administration fees, Mackenzie pays all costs and expenses (other than certain specified fund costs) required to operate the Fund that are not otherwise included in management fees. See also Management Fees. Past Performance The Fund s past performance information is presented in the following charts and table. It assumes all distributions made by the Fund in the periods presented are reinvested in additional securities of the relevant series of the Fund. The charts and table do not take into account sales, redemption, distribution or optional charges, or income taxes payable by any investor that would have reduced returns. The past performance of the Fund is not necessarily an indication of how it will perform in the future. If you hold this Fund outside of a registered plan, income and capital gains distributions paid to you increase your income for tax purposes whether paid to you in cash or reinvested in additional securities of the Fund. The amount of reinvested taxable distributions is added to the adjusted cost base of the securities that you own. This would decrease your capital gain or increase your capital loss when you later redeem from the Fund, thereby ensuring that you are not taxed on this amount again. Please consult your tax adviser regarding your personal tax situation. Year-by-Year Returns The following bar charts present the performance of each series of the Fund for each of the fiscal periods shown. The charts show, in percentage terms, how much an investment made on the first day of each fiscal period, or on the series inception or reinstatement date, as applicable, would have increased or decreased by the last day of the fiscal period presented. Series inception or reinstatement dates can be found under Fund Formation and Series Information. Other Related Party Transactions Investment funds managed by Mackenzie invest in Series R securities of the Fund on a prospectus-exempt basis in accordance with the investment objectives of those funds. Series S securities are also issued on a prospectus-exempt basis to London Life Insurance Company, The Great-West Life Assurance Company and The Canada Life Assurance Company (collectively, the Related Insurance Companies ), all of which are companies affiliated with Mackenzie. At March 31,, the Related Insurance Companies owned 13.2% of the Fund s NAV, and funds managed by Mackenzie owned 5.4% of the Fund s NAV. All related party transactions are based on the NAV per security on each transaction day. The Fund did not rely on an approval, positive recommendation or standing instruction from the Mackenzie Funds Independent Review Committee with respect to any related party transactions. At March 31,, Mackenzie had an investment of $0.3 million in the Fund (0.1% of the Fund s NAV).

4 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31,

5 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31,

6 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31,

7 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, Annual Compound Returns The following table compares the historical annual compound total returns for each series of the Fund with the relevant index or indices shown below for each of the periods ended March 31,. Investors cannot invest in an index without incurring fees, expenses and commissions, which are not reflected in these performance figures. All index returns are calculated in Canadian dollars on a total return basis, meaning that all distributions are reinvested. Percentage Return: 1 1 Yr 3 Yr 5 Yr 10 Yr Since Inception 2 Series A n/a n/a 4.4 Series AR n/a n/a 3.9 Series D n/a n/a 4.1 Series F n/a n/a 5.2 Series F n/a n/a 5.3 Series FB 14.5 n/a n/a n/a 7.2 Series FB n/a n/a n/a 7.2 Series O n/a n/a 6.4 Series O n/a n/a 6.1 Series PW n/a n/a 4.7 Series PWF n/a n/a 5.2 Series PWF n/a n/a n/a 5.3 Series PWT n/a n/a 4.5 Series PWX n/a n/a 5.8 Series PWX n/a n/a n/a 5.4 Series R n/a n/a 6.3 Series S 15.6 n/a n/a n/a 6.5 Series SC n/a n/a 4.7 Series S n/a n/a 4.6 Series T n/a n/a 4.1 Quadrus Series 13.3 n/a n/a n/a 3.0 H Series 14.3 n/a n/a n/a 3.8 L Series 13.8 n/a n/a n/a 3.6 N Series 15.6 n/a n/a n/a 5.0 QF Series n/a n/a n/a n/a 8.9 The S&P/LSTA Leveraged Loan (Hedged) Index is a broad index designed to reflect the performance of U.S. dollar facilities in the leveraged loan market. The foreign currency exposure is hedged back to the Canadian dollar. In future reports, performance will be compared to this index. The S&P/LSTA Leveraged Loan Index is a broad index designed to reflect the performance of U.S. dollar facilities in the leveraged loan market. In future reports, performance will no longer be compared to this index. (1) The percentage return differs for each series because the management fee rate and expenses differ for each series. (2) The return since inception for each series will differ when the inception date differs and is only provided when a series has been active for a period of less than 10 years. (3) The return of the FTSE TMX Canada Universe Bond Index since inception for each applicable series is as follows: Series A 3.2%, Series AR 4.5%, Series D 4.1%, Series F 3.2%, Series F6 4.2%, Series FB 2.6%, Series FB5 2.6%, Series O 3.7%, Series O6 4.6%, Series PW 4.6%, Series PWF 4.6%, Series PWF8 1.0%, Series PWT8 4.2%, Series PWX 4.5%, Series PWX8 2.5%, Series R 4.5%, Series S 2.3%, Series SC 3.2%, Series S6 4.3%, Series T6 3.5%, Quadrus Series 3.9%, H Series 3.9%, L Series 3.5%, N Series 3.5%, QF Series 1.5%. (4) The return of the S&P/LTSA Leveraged Loan (Hedged) Index since inception for each applicable series is as follows: Series A 4.0%, Series AR 4.1%, Series D 3.7%, Series F 4.0%, Series F6 4.3%, Series FB 6.0%, Series FB5 6.0%, Series O 4.1%, Series O6 4.1%, Series PW 4.2%, Series PWF 4.2%, Series PWF8 4.1%, Series PWT8 4.0%, Series PWX 4.0%, Series PWX8 3.6%, Series R 4.2%, Series S 4.5%, Series SC 4.0%, Series S6 4.3%, Series T6 4.0%, Quadrus Series 3.5%, H Series 3.5%, L Series 3.7%, N Series 3.5%, QF Series 5.8%. (5) The return of the S&P/LTSA Leveraged Loan Index since inception for each applicable series is as follows: Series A 11.3%, Series AR 11.9%, Series D 9.4%, Series F 11.3%, Series F6 10.6%, Series FB 7.1%, Series FB5 7.1%, Series O 11.3%, Series O6 11.7%, Series PW 11.8%, Series PWF 11.8%, Series PWF8 7.4%, Series PWT8 11.3%, Series PWX 11.0%, Series PWX8 8.3%, Series R 10.9%, Series S 9.8%, Series SC 11.4%, Series S6 10.7%, Series T6 10.7%, Quadrus Series 12.0%, H Series 12.0%, L Series 11.7%, N Series 12.0%, QF Series 8.2%. FTSE TMX Canada Universe Bond Index* n/a n/a Note 3 S&P/LSTA Leveraged Loan (Hedged) Index** n/a n/a Note 4 S&P/LSTA Leveraged Loan Index n/a n/a Note 5 * Broad-based Index ** New narrow index Previous narrow index The FTSE TMX Canada Universe Bond Index is a broad measure of Canadian bonds with terms to maturity of more than one year. It includes federal, provincial, municipal and corporate bonds rated BBB or higher.

8 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, Summary of Investment Portfolio at March 31, Portfolio Allocation % of NAV Bonds Cash and short-term investments 8.4 Equities 1.6 Other assets (liabilities) (11.4) Regional Allocation % of NAV United States 84.7 Canada 11.4 Cash and short-term investments 8.4 Brazil 2.1 Other 1.5 Netherlands 1.0 Sweden 0.8 Cayman Islands 0.8 Mexico 0.7 Other assets (liabilities) (11.4) Sector Allocation % of NAV Term loans 87.8 Corporate bonds 10.5 Cash and short-term investments 8.4 Other 3.5 Provincial bonds 1.2 Other assets (liabilities) (11.4) Net Currency Exposure % of NAV Canadian dollar 80.6 U.S. dollar 19.3 Euro 0.1 Bonds by Credit Rating* % of NAV AAA 1.0 AA 1.2 A 0.7 BBB 4.9 BB 19.9 B 54.0 Less than B 7.5 Unrated 12.2 Top 25 Holdings Issuer % of NAV Cash and short-term investments 8.4 Uber Technologies Inc. Term Loan B 1st Lien F/R Electrical Components International Inc. Term Loan B 1st Lien F/R JBS USA Lux SA Term Loan B 1st Lien F/R Innocor Inc. Term Loan 1st Lien F/R REP WWEX Acquisition Parent LLC Term Loan 1st Lien F/R Global Eagle Entertainment Inc. Term Loan 1st Lien F/R Interior Logic Group Inc. Term Loan B 1st Lien F/R MEG Energy Corp. Term Loan B 1st Lien F/R Hennessy Capital Acquisition Corp. II Term Loan 1st Lien F/R Hyperion Insurance Group Ltd. Term Loan B 1st Lien F/R US LBM Holdings LLC Term Loan 1st Lien F/R ConvergeOne Holdings Corp. Term Loan Delayed Draw 1st Lien F/R SourceHOV LLC Term Loan B 1st Lien F/R Q Holding Co. Term Loan B 1st Lien F/R Camelot Finance SA Term Loan B 1st Lien F/R Commercial Vehicle Group Inc. Term Loan B 1st Lien F/R iqor US Inc. Term Loan B 1st Lien F/R International Equipment Solutions LLC Term Loan B 1st Lien F/R Drive DeVilbiss Healthcare Ltd. Term Loan 1st Lien F/R Highland Acquisition Holdings LLC Term Loan B 1st Lien F/R Fairmount Santrol Holdings Inc. Term Loan B2 1st Lien F/R Integro Ltd. United States Term Loan B1 1st Lien F/R Power Products LLC Term Loan 1st Lien F/R TricorBraun Inc. (KRAIND) Term Loan 1st Lien F/R Top long positions as a percentage of total net asset value 42.1 The Fund held no short positions at the end of the period. The investments and percentages may have changed since March 31,, due to the ongoing portfolio transactions of the Fund. Quarterly updates of holdings are available within 60 days of the end of each quarter except for March 31, the Fund s fiscal year-end, when they are available within 90 days. * Credit ratings and rating categories are based on Standard & Poor s or DBRS (or equivalent ratings issued by other designated rating organizations).

9 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, 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 each of the fiscal periods presented below. If during the period a fund or series was established or reinstated, period represents the period from inception or reinstatement to the end of that fiscal period. Series inception or reinstatement dates can be found under Fund Formation and Series Information. THE FUND S NET ASSETS PER SECURITY ($) 1 Series A Net assets, beginning of period Total revenue Total expenses (0.20) (0.20) (0.21) (0.19) Realized gains (losses) for the period 0.49 (0.50) (0.45) (0.57) Unrealized gains (losses) for the period 0.39 (0.44) operations (0.48) (excluding dividends) (0.40) (0.47) (0.45) (0.24) Return of capital Total annual distributions 3 (0.40) (0.47) (0.45) (0.24) Net assets, end of period Series AR Net assets, beginning of period Total revenue Total expenses (0.20) (0.20) (0.21) (0.09) Realized gains (losses) for the period 0.44 (0.54) (0.41) 0.06 Unrealized gains (losses) for the period 0.38 (0.43) operations (0.53) (excluding dividends) (0.37) (0.43) (0.42) (0.11) Return of capital Total annual distributions 3 (0.37) (0.43) (0.42) (0.11) Net assets, end of period Series D Net assets, beginning of period Total revenue Total expenses (0.12) (0.12) (0.13) Realized gains (losses) for the period 0.44 (0.52) (0.49) Unrealized gains (losses) for the period 0.36 (0.42) operations (0.43) (excluding dividends) (0.49) (0.53) (0.38) (0.01) Return of capital Total annual distributions 3 (0.49) (0.53) (0.38) (0.01) Net assets, end of period Series F Net assets, beginning of period Total revenue Total expenses (0.10) (0.10) (0.11) (0.10) Realized gains (losses) for the period 0.46 (0.49) (0.44) (0.57) Unrealized gains (losses) for the period 0.38 (0.44) operations (0.38) (excluding dividends) (0.49) (0.57) (0.54) (0.31) Return of capital Total annual distributions 3 (0.49) (0.57) (0.54) (0.31) Net assets, end of period (1) These calculations are prescribed by securities regulations and are not intended to be a reconciliation between opening and closing net assets per security. Information for the fiscal periods ended after March 31, 2013, is derived from the Fund s audited annual financial statements prepared in accordance with International Financial Reporting Standards ( IFRS ). Information for any previous fiscal periods is derived from the Fund s audited annual financial statements prepared in accordance with Canadian generally accepted accounting principles as defined in Part V of the Chartered Professional Accountants Handbook ( Canadian GAAP ). The net assets per security presented in the financial statements may differ from the net asset value per security calculated for fund pricing purposes. An explanation of these differences can be found in the Notes to Financial Statements. (2) Net assets and distributions are based on the actual number of securities outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of securities outstanding over the fiscal period. (3) Distributions were paid in cash/reinvested in additional securities of the Fund, or both.

10 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, THE FUND S NET ASSETS PER SECURITY ($) 1 (cont d) Series F6 Net assets, beginning of period Total revenue Total expenses (0.13) (0.14) (0.15) (0.12) Realized gains (losses) for the period 0.65 (0.77) (0.63) (0.32) Unrealized gains (losses) for the period 0.54 (0.63) operations (0.60) (excluding dividends) (0.68) (0.80) (0.63) (0.42) Return of capital (0.17) (0.14) (0.33) (0.31) Total annual distributions 3 (0.85) (0.94) (0.96) (0.73) Net assets, end of period Series FB Net assets, beginning of period n/a n/a Total revenue n/a n/a Total expenses (0.10) (0.04) n/a n/a Realized gains (losses) for the period n/a n/a Unrealized gains (losses) for the period 0.39 (0.20) n/a n/a operations n/a n/a (excluding dividends) (0.49) (0.18) n/a n/a From dividends n/a n/a From capital gains n/a n/a Return of capital n/a n/a Total annual distributions 3 (0.49) (0.18) n/a n/a Net assets, end of period n/a n/a Series FB5 Net assets, beginning of period n/a n/a Total revenue n/a n/a Total expenses (0.16) (0.07) n/a n/a Realized gains (losses) for the period 0.71 (0.60) n/a n/a Unrealized gains (losses) for the period 0.58 (0.29) n/a n/a operations (0.53) n/a n/a (excluding dividends) (0.63) (0.29) n/a n/a From dividends n/a n/a From capital gains n/a n/a Return of capital (0.13) (0.09) n/a n/a Total annual distributions 3 (0.76) (0.38) n/a n/a Net assets, end of period n/a n/a Series O Net assets, beginning of period Total revenue Total expenses Realized gains (losses) for the period 0.47 (0.50) (0.42) (0.50) Unrealized gains (losses) for the period 0.38 (0.44) operations (0.29) (excluding dividends) (0.59) (0.66) (0.65) (0.38) Return of capital Total annual distributions 3 (0.59) (0.66) (0.65) (0.38) Net assets, end of period

11 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, THE FUND S NET ASSETS PER SECURITY ($) 1 (cont d) Series O6 Net assets, beginning of period Total revenue Total expenses Realized gains (losses) for the period 0.84 (0.74) (0.61) (0.01) Unrealized gains (losses) for the period 0.56 (0.64) operations (0.43) (excluding dividends) (0.78) (0.85) (0.92) (0.42) Return of capital (0.09) (0.11) (0.11) (0.11) Total annual distributions 3 (0.87) (0.96) (1.03) (0.53) Net assets, end of period Series PW Net assets, beginning of period Total revenue Total expenses (0.13) (0.13) (0.14) (0.06) Realized gains (losses) for the period 0.42 (0.46) (0.42) 0.06 Unrealized gains (losses) for the period 0.38 (0.43) operations (0.38) (excluding dividends) (0.44) (0.52) (0.50) (0.12) Return of capital Total annual distributions 3 (0.44) (0.52) (0.50) (0.12) Net assets, end of period Series PWF Net assets, beginning of period Total revenue Total expenses (0.08) (0.08) (0.09) (0.04) Realized gains (losses) for the period 0.47 (0.57) (0.48) 0.05 Unrealized gains (losses) for the period 0.37 (0.43) operations (0.43) (excluding dividends) (0.50) (0.56) (0.55) (0.16) Return of capital Total annual distributions 3 (0.50) (0.56) (0.55) (0.16) Net assets, end of period Series PWF8 Net assets, beginning of period n/a Total revenue n/a Total expenses (0.10) (0.12) (0.08) n/a Realized gains (losses) for the period 0.65 (0.95) (0.70) n/a Unrealized gains (losses) for the period 0.54 (0.63) 0.17 n/a operations (0.76) n/a (excluding dividends) (0.79) (0.89) (0.49) n/a From dividends n/a From capital gains n/a Return of capital (0.34) (0.32) (0.36) n/a Total annual distributions 3 (1.13) (1.21) (0.85) n/a Net assets, end of period n/a

12 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, THE FUND S NET ASSETS PER SECURITY ($) 1 (cont d) Series PWT8 Net assets, beginning of period Total revenue Total expenses (0.18) (0.19) (0.21) (0.09) Realized gains (losses) for the period 0.64 (0.70) (0.62) 0.03 Unrealized gains (losses) for the period 0.50 (0.59) operations (0.59) (excluding dividends) (0.61) (0.71) (0.71) (0.25) Return of capital (0.44) (0.47) (0.52) (0.30) Total annual distributions 3 (1.05) (1.18) (1.23) (0.55) Net assets, end of period Series PWX Net assets, beginning of period Total revenue Total expenses Realized gains (losses) for the period 0.42 (0.47) (0.44) 0.05 Unrealized gains (losses) for the period 0.38 (0.43) operations (0.26) (excluding dividends) (0.60) (0.65) (0.58) (0.12) Return of capital Total annual distributions 3 (0.60) (0.65) (0.58) (0.12) Net assets, end of period Series PWX8 Net assets, beginning of period n/a n/a Total revenue n/a n/a Total expenses n/a n/a Realized gains (losses) for the period 0.64 (0.94) n/a n/a Unrealized gains (losses) for the period 0.54 (0.54) n/a n/a operations (0.68) n/a n/a (excluding dividends) (0.84) (0.77) n/a n/a From dividends n/a n/a From capital gains n/a n/a Return of capital (0.29) (0.29) n/a n/a Total annual distributions 3 (1.13) (1.06) n/a n/a Net assets, end of period n/a n/a Series R Net assets, beginning of period Total revenue Total expenses Realized gains (losses) for the period 0.56 (0.53) (0.46) (0.05) Unrealized gains (losses) for the period 0.38 (0.43) operations (0.31) (excluding dividends) (0.59) (0.64) (0.66) (0.31) Return of capital Total annual distributions 3 (0.59) (0.64) (0.66) (0.31) Net assets, end of period

13 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, THE FUND S NET ASSETS PER SECURITY ($) 1 (cont d) Series S Net assets, beginning of period n/a Total revenue n/a Total expenses n/a Realized gains (losses) for the period 0.45 (0.68) n/a Unrealized gains (losses) for the period 0.38 (0.44) 0.04 n/a operations (0.46) 0.19 n/a (excluding dividends) (0.62) (0.59) (0.06) n/a From dividends n/a From capital gains n/a Return of capital n/a Total annual distributions 3 (0.62) (0.59) (0.06) n/a Net assets, end of period n/a Series SC Net assets, beginning of period Total revenue Total expenses (0.17) (0.18) (0.18) (0.17) Realized gains (losses) for the period 0.48 (0.48) (0.45) (0.73) Unrealized gains (losses) for the period 0.38 (0.44) operations (0.45) (excluding dividends) (0.43) (0.49) (0.48) (0.27) Return of capital Total annual distributions 3 (0.43) (0.49) (0.48) (0.27) Net assets, end of period Series S6 Net assets, beginning of period Total revenue Total expenses (0.25) (0.25) (0.27) (0.21) Realized gains (losses) for the period 0.62 (0.73) (0.65) (0.25) Unrealized gains (losses) for the period 0.52 (0.62) operations (0.68) (excluding dividends) (0.61) (0.72) (0.66) (0.34) Return of capital (0.23) (0.21) (0.32) (0.39) Total annual distributions 3 (0.84) (0.93) (0.98) (0.73) Net assets, end of period Series T6 Net assets, beginning of period Total revenue Total expenses (0.27) (0.27) (0.29) (0.25) Realized gains (losses) for the period 0.68 (0.66) (0.78) (0.43) Unrealized gains (losses) for the period 0.53 (0.61) operations (0.63) (excluding dividends) (0.51) (0.73) (0.62) (0.34) Return of capital (0.31) (0.18) (0.33) (0.46) Total annual distributions 3 (0.82) (0.91) (0.95) (0.80) Net assets, end of period

14 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, THE FUND S NET ASSETS PER SECURITY ($) 1 (cont d) Quadrus Series Net assets, beginning of period n/a Total revenue n/a Total expenses (0.19) (0.19) (0.14) n/a Realized gains (losses) for the period 0.44 (0.54) (0.29) n/a Unrealized gains (losses) for the period 0.37 (0.42) 0.13 n/a operations (0.52) 0.15 n/a (excluding dividends) (0.38) (0.43) (0.21) n/a From dividends n/a From capital gains n/a Return of capital n/a Total annual distributions 3 (0.38) (0.43) (0.21) n/a Net assets, end of period n/a H Series Net assets, beginning of period n/a Total revenue n/a Total expenses (0.11) (0.11) (0.08) n/a Realized gains (losses) for the period 0.50 (0.50) (0.33) n/a Unrealized gains (losses) for the period 0.36 (0.42) 0.13 n/a operations (0.41) 0.16 n/a (excluding dividends) (0.47) (0.54) (0.30) n/a From dividends n/a From capital gains n/a Return of capital n/a Total annual distributions 3 (0.47) (0.54) (0.30) n/a Net assets, end of period n/a L Series Net assets, beginning of period n/a Total revenue n/a Total expenses (0.16) (0.15) (0.10) n/a Realized gains (losses) for the period 0.44 (0.67) (0.20) n/a Unrealized gains (losses) for the period 0.37 (0.43) 0.11 n/a operations (0.61) 0.20 n/a (excluding dividends) (0.41) (0.43) (0.21) n/a From dividends n/a From capital gains n/a Return of capital n/a Total annual distributions 3 (0.41) (0.43) (0.21) n/a Net assets, end of period n/a N Series Net assets, beginning of period n/a Total revenue n/a Total expenses n/a Realized gains (losses) for the period 0.44 (0.62) (0.31) n/a Unrealized gains (losses) for the period 0.37 (0.42) 0.12 n/a operations (0.40) 0.23 n/a (excluding dividends) (0.58) (0.59) (0.29) n/a From dividends n/a From capital gains n/a Return of capital n/a Total annual distributions 3 (0.58) (0.59) (0.29) n/a Net assets, end of period n/a

15 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, THE FUND S NET ASSETS PER SECURITY ($) 1 (cont d) RATIOS AND SUPPLEMENTAL DATA QF Series Series A Net assets, beginning of period n/a n/a n/a Total revenue 0.42 n/a n/a n/a Total expenses (0.08) n/a n/a n/a Realized gains (losses) for the period 0.33 n/a n/a n/a Unrealized gains (losses) for the period 0.26 n/a n/a n/a operations n/a n/a n/a (excluding dividends) (0.43) n/a n/a n/a From dividends n/a n/a n/a From capital gains n/a n/a n/a Return of capital n/a n/a n/a Total annual distributions 3 (0.43) n/a n/a n/a Net assets, end of period n/a n/a n/a Total net asset value ($000) 1, 2 41,782 80, , ,765 Securities outstanding (000) 1 4,109 8,624 10,901 10,263 Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($) Series AR Total net asset value ($000) 1, Securities outstanding (000) Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($) (1) This information is provided as at the end of the fiscal period shown. (2) The net asset value figures presented in this table are used for fund pricing and calculating returns by series. For any fiscal periods prior to the adoption of IFRS, the net asset values may differ from the figures in the annual financial statements, and the net asset value per security in this table may differ from the end of period figure in the Fund s Net Assets per Security table in this section. This difference is due to the requirements of Canadian GAAP. The adoption of IFRS for the fiscal periods ended after March 31, 2013 has eliminated the difference between the net asset value and net assets per security, in most cases. (3) Management expense ratio is based on total expenses (excluding commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the period. If in the period a series was established or reinstated, the management expense ratio is annualized from the date of inception or reinstatement. Mackenzie and Quadrus may waive or absorb operating expenses at their discretion and stop waiving or absorbing such expenses at any time without notice. (4) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. (5) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser 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 period. 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 year. There is not necessarily a relationship between a high turnover rate and the performance of a fund. The portfolio turnover rate is not provided when the Fund is less than one year old. The value of any trades to realign the Fund s portfolio after a fund merger, if any, is excluded from the portfolio turnover rate.

16 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, RATIOS AND SUPPLEMENTAL DATA (cont d) Series D Total net asset value ($000) 1, Securities outstanding (000) Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($) Series F Total net asset value ($000) 1, 2 83,524 49,793 71,373 66,564 Securities outstanding (000) 1 8,258 5,382 6,992 6,380 Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($) Series F6 Total net asset value ($000) 1, 2 5,154 2,739 4, Securities outstanding (000) Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($) Series FB Total net asset value ($000) 1, n/a n/a Securities outstanding (000) n/a n/a Management expense ratio (%) n/a n/a waivers or absorptions (%) n/a n/a Trading expense ratio (%) n/a n/a Portfolio turnover rate (%) n/a n/a Net asset value per security ($) n/a n/a Series FB5 Total net asset value ($000) 1, n/a n/a Securities outstanding (000) 1 n/a n/a Management expense ratio (%) n/a n/a waivers or absorptions (%) n/a n/a Trading expense ratio (%) n/a n/a Portfolio turnover rate (%) n/a n/a Net asset value per security ($) n/a n/a Series O Total net asset value ($000) 1, 2 11,894 11,292 15,389 14,993 Securities outstanding (000) 1 1,178 1,222 1,509 1,437 Management expense ratio (%) 3 waivers or absorptions (%) 3 Net asset value per security ($) Series O6 Total net asset value ($000) 1, Securities outstanding (000) Management expense ratio (%) 3 waivers or absorptions (%) 3 Net asset value per security ($) Series PW Total net asset value ($000) 1, 2 42,713 17,459 23,336 22,735 Securities outstanding (000) 1 4,268 1,909 2,313 2,203 Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($)

17 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, RATIOS AND SUPPLEMENTAL DATA (cont d) Series PWF Total net asset value ($000) 1, 2 39,890 23,060 21,237 18,223 Securities outstanding (000) 1 3,987 2,520 2,107 1,769 Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($) Series PWF8 Total net asset value ($000) 1, n/a Securities outstanding (000) 1 12 n/a Management expense ratio (%) n/a waivers or absorptions (%) n/a Trading expense ratio (%) n/a Net asset value per security ($) n/a Series PWT8 Total net asset value ($000) 1, Securities outstanding (000) Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($) Series PWX Total net asset value ($000) 1, 2 1,739 1,013 1, Securities outstanding (000) Management expense ratio (%) 3 waivers or absorptions (%) 3 Net asset value per security ($) Series PWX8 Total net asset value ($000) 1, n/a n/a Securities outstanding (000) n/a n/a Management expense ratio (%) 3 n/a n/a waivers or absorptions (%) 3 n/a n/a Trading expense ratio (%) n/a n/a Portfolio turnover rate (%) n/a n/a Net asset value per security ($) n/a n/a Series R Total net asset value ($000) 1, 2 27,599 55,729 50,349 57,041 Securities outstanding (000) 1 2,763 6,094 5,000 5,529 Management expense ratio (%) 3 waivers or absorptions (%) 3 Net asset value per security ($) Series S Total net asset value ($000) 1, 2 67,713 29,591 6,952 n/a Securities outstanding (000) 1 6,687 3, n/a Management expense ratio (%) n/a waivers or absorptions (%) n/a Trading expense ratio (%) n/a Net asset value per security ($) n/a Series SC Total net asset value ($000) 1, 2 145, , , ,708 Securities outstanding (000) 1 14,324 11,062 14,197 14,745 Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($)

18 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, RATIOS AND SUPPLEMENTAL DATA (cont d) Series S6 Total net asset value ($000) 1, 2 2, ,004 1,562 Securities outstanding (000) Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($) Series T6 Total net asset value ($000) 1, ,197 3,443 4,982 Securities outstanding (000) Management expense ratio (%) waivers or absorptions (%) Net asset value per security ($) Quadrus Series Total net asset value ($000) 1, 2 15,069 10,219 8,430 n/a Securities outstanding (000) 1 1,546 1, n/a Management expense ratio (%) n/a waivers or absorptions (%) n/a Trading expense ratio (%) n/a Net asset value per security ($) n/a L Series Total net asset value ($000) 1, 2 6,423 3, n/a Securities outstanding (000) n/a Management expense ratio (%) n/a waivers or absorptions (%) n/a Trading expense ratio (%) n/a Net asset value per security ($) n/a N Series Total net asset value ($000) 1, 2 13,756 9,571 3,952 n/a Securities outstanding (000) 1 1,400 1, n/a Management expense ratio (%) n/a waivers or absorptions (%) n/a Trading expense ratio (%) n/a Net asset value per security ($) n/a QF Series Total net asset value ($000) 1, n/a n/a n/a Securities outstanding (000) 1 77 n/a n/a n/a Management expense ratio (%) n/a n/a n/a waivers or absorptions (%) n/a n/a n/a Trading expense ratio (%) n/a n/a n/a Portfolio turnover rate (%) n/a n/a n/a Net asset value per security ($) n/a n/a n/a H Series Total net asset value ($000) 1, 2 1, n/a Securities outstanding (000) n/a Management expense ratio (%) n/a waivers or absorptions (%) n/a Trading expense ratio (%) n/a Net asset value per security ($) n/a

19 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, Management Fees The management fee for each applicable series is calculated and accrued daily as a percentage of its NAV. The Fund s management fees were used by Mackenzie to pay for the costs of managing the investment portfolio, providing investment analysis and recommendations, making investment decisions, making brokerage arrangements for the purchase and sale of the investment portfolio, and providing other services. Mackenzie also used the management fees to fund sales commissions, trailing commissions and any other compensation (collectively distribution-related payments ) to registered dealers and brokers whose clients invest in the Fund. Quadrus Investment Services Ltd. ( Quadrus ), an affiliate of Mackenzie, is the principal distributor for the Quadrus Series, H Series, H5 Series, H8 Series, L Series, L5 Series, L8 Series, N Series, N5 Series, N8 Series, D5 Series, D8 Series, QF Series and QF5 Series securities of the Fund, as applicable, and receives a portion of the management fees that the Fund pays to Mackenzie. Under this arrangement, Quadrus was entitled to approximately 79% of the total management fees that Mackenzie received from the Quadrus Group of Funds during the year. As the principal distributor of the above-named series of securities of the Fund, Quadrus is responsible for paying certain administrative costs and all distributionrelated payments to registered dealers whose clients invest in those securities of the Fund. The following dealers affiliated with Mackenzie may be entitled to distribution-related payments from Mackenzie on the same basis as unrelated registered brokers and dealers: IPC Securities Corporation, Investors Group Securities Inc., IPC Investment Corporation and Investors Group Financial Services Inc. Mackenzie used approximately 43% of the total management fee revenues received from all Mackenzie funds during the year to fund distributionrelated payments to registered dealers and brokers. In comparison, such distribution-related payments for the Fund represented on average 40% of the management fees paid by all applicable series of the Fund during the year. The actual percentage for each series may be higher or lower than the average depending on the level of trailing commissions and sales commissions paid for that series.

20 ANNUAL MANAGEMENT REPORT OF FUND PERFORMANCE For the Year Ended March 31, Fund Formation and Series Information The Fund may have undergone a number of changes, such as a reorganization or a change in manager, mandate or name. A history of the major changes affecting the Fund in the last 10 years can be found in the Fund s Annual Information Form. Date of Formation April 30, 2013 The Fund may issue an unlimited number of securities of each series. The number of issued and outstanding securities of each series is disclosed in Financial Highlights. Series Offered by Mackenzie Financial Corporation (180 Queen Street West, Toronto, Ontario, M5V 3K1; ; Series A and Series T6 securities are offered to retail investors investing a minimum of $500 ($5,000 for Series T6) under the redemption charge and low load purchase options. Investors in Series T6 securities also want to receive a regular monthly cash flow of 6% per year. Series AR securities are offered to retail investors in a Registered Disability Savings Plan offered by Mackenzie. Series D securities are offered to retail investors investing a minimum of $500 through a discount brokerage or other account approved by Mackenzie. Series F and Series F6 securities are offered to investors who are enrolled in a dealer-sponsored fee-for-service or wrap program, who are subject to an asset-based fee rather than commissions on each transaction and who invest at least $500 ($5,000 for Series F6); they are also available to employees of Mackenzie and its subsidiaries, and directors of Mackenzie. Investors in Series F6 securities also want to receive a regular monthly cash flow of 6% per year. Series FB and Series FB5 securities are offered to retail investors investing a minimum of $500. Investors are required to negotiate their advisor service fee, which cannot exceed 1.50%, with their financial advisor. Investors in Series FB5 securities also want to receive a monthly cash flow of 5% per year. Series O and Series O6 securities are offered to investors investing a minimum of $500,000 who have entered into a Series O account agreement with Mackenzie, and are also available to certain qualifying employees of Mackenzie and its subsidiaries. Investors in Series O6 securities also want to receive a monthly cash flow of 6% per year. Series PW, Series PWT6 and Series PWT8 securities are offered through our Private Wealth Solutions to certain high net worth investors who invest a minimum of $100,000. Investors in Series PWT6 and Series PWT8 securities also want to receive a monthly cash flow of 6% or 8% per year, respectively. Series PWF, Series PWF6 and Series PWF8 securities are offered through our Private Wealth Solutions to certain high net worth investors who are enrolled in a dealer-sponsored fee-for-service or wrap program, who are subject to an asset-based fee rather than commissions on each transaction and who invest at least $100,000. Investors in Series PWF6 and Series PWF8 securities also want to receive a monthly cash flow of 6% or 8% per year, respectively. Series PWFB and Series PWFB5 securities are offered through our Private Wealth Solutions to certain high net worth investors who invest a minimum of $100,000. Investors are required to negotiate their advisor service fee, which cannot exceed 1.50%, with their financial advisor. Investors in Series PWFB5 securities also want to receive a monthly cash flow of 5% per year. Series PWX and Series PWX8 securities are offered through our Private Wealth Solutions to certain high net worth investors who invest a minimum of $100,000. Investors are required to negotiate their advisor service fee, which cannot exceed 1.50%, with their financial advisor. Investors in Series PWX8 securities also want to receive a monthly cash flow of 8% per year. Series R securities are offered only to other affiliated funds and certain institutional investors in connection with fund-of-fund arrangements. Series S securities are offered to the Related Insurance Companies and certain other mutual funds, but may be sold to other investors as determined by Mackenzie. Series SC and Series S6 securities are offered to retail investors investing a minimum of $500 ($5,000 for Series S6) under the sales charge purchase option. Investors in Series S6 securities also want to receive a regular monthly cash flow of 6% per year. Series Distributed by Quadrus Investment Services Ltd. (255 Dufferin Ave., London, Ontario, N6A 4K1; ; Quadrus Investment Services Ltd. ( Quadrus ) is the principal distributor of the series of securities listed below: Quadrus Series securities are offered to investors investing a minimum of $500. H Series securities are offered to investors investing a minimum of $500, who are enrolled in a Quadrus-sponsored fee-for-service or wrap program and who are subject to an asset-based fee. L Series securities are offered to investors investing a minimum of $100,000 and who have eligible minimum total holdings of $500,000. N Series securities are offered to investors investing a minimum of $100,000, who have eligible minimum total holdings of $500,000, and who have entered into an N type series account agreement with Mackenzie and Quadrus. QF Series securities are offered to retail investors investing a minimum of $500. Investors are required to negotiate their advisor service fee, which cannot exceed 1.25%, with their financial advisor.