This Fund is designed for investors who want to defer tax on capital gains outside a registered plan.

Transcription

1 This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You can get a copy of the annual financial statements at your request, and at no cost, by calling , by writing to us at CI Investments Inc., 2 Queen Street East, Twentieth Floor, Toronto, ON M5C 3G7 or by visiting our website at or SEDAR at Securityholders may also contact us using one of these methods to request a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure. INVESTMENT OBJECTIVE AND STRATEGIES The objective of the Signature Emerging Markets Corporate Class (the Fund ) is to obtain maximum long-term capital growth through investment in equity and equity-related securities of companies that the portfolio advisor believes have good growth potential. These companies are located in emerging markets and emerging industries of any market. The portfolio advisor analyzes the global economy and the economies and industries of various emerging markets. Based on this analysis, it identifies the countries and then the companies that it believes offer potential for strong growth. The portfolio advisor uses techniques such as fundamental analysis to assess growth potential. This means evaluating the financial condition and management of a company, its industry and the overall economy. The twelve months under review started off on a negative note as emerging market equities gave back most of the gains recorded during the first quarter of 212. Emerging market equities were down almost 9% in the second quarter of 212 as European worries, weaker than expected U.S. economic data and much weaker Chinese data added to global growth concerns. The third quarter of 212 started on a lacklustre note, but global sentiment improved noticeably during the remainder of the quarter, pushing emerging market equities higher. Tail risks in Europe diminished and the announcement of a third round of quantitative easing in the U.S. supported global risk sentiment. Signs of economic activity gaining momentum, a fairly smooth leadership transition in China and expectations that the U.S. would avoid the so-called fiscal cliff, further added to positive sentiment and pushed emerging market equities higher in the fourth quarter. Emerging market equities ended the 12-month period up just above 5% in local currency terms and 4.% in Canadian dollar terms (S&P/IFCI Emerging Market Index). The Fund may use derivatives, but only as permitted by securities regulations. In order to earn additional income, the Fund may also enter into securities lending transactions, repurchase transactions and reverse repurchase transactions, to the extent permitted by securities regulations. This Fund is designed for investors who want to defer tax on capital gains outside a registered plan. RISK The risks associated with investing in this Fund remain as discussed in the prospectus. The Fund is suitable for investors who want to invest in emerging markets, are investing for the medium and/or long term, and can tolerate high risk. An interesting shift occurred towards the end of the period with investors focus turning away from treating emerging markets as a singular group to focusing more on country-specific developments. Geographically, performance was quite dispersed across regions and countries in the first quarter of 213, with Latin America being the only region to record positive returns despite a small decline in Brazil. Mexico and Chile led the region. Performance for emerging markets in Asia was hampered by negative returns from China, Korea and India, and good returns from the Philippines and Indonesia could not fully offset the drag. EMEA (Eastern Europe, Middle East & Africa) was a sea of red, with Turkey the only country reporting positive returns during the quarter. The significant dispersion of country performances across the emerging market universe in the most recent quarter highlighted the importance of taking country-specific developments into account when investing in emerging markets. RESULTS OF OPERATIONS The net asset value of the Fund increased by $34. million to $23. million from March 31, 212 to March 31, 213. The Fund had net sales of $2.6 million during the period. The portfolio s performance increased assets by $13.8 million. The Fund paid distributions totalling $.4 million. The one-year return for Class A shares was 7.%, Class AT8 shares was 6.8%, Class E shares was 7.5%, Class F shares was 8.2%, Class I shares was 1.%, Class IT8 shares was 9.9% and Class O shares was 9.8%, as compared to the return of its benchmarks of 4.1% and 4.%, respectively. The benchmarks are the MSCI Emerging Markets Total Return Index (new) and the S&P Emerging LargeMidCap Plus Total Return Index (old). During the reporting period the portfolio manager changed the reference index of the Fund from the S&P Emerging LargeMidCap Plus Total Return Index (old) to the MSCI Emerging Markets Total Return Index (new). The portfolio manager believes that the new benchmark better reflects the nature of the Fund. The portfolio outperformed its benchmark over this period due to a combination of factors, including stock selection, sector weightings, country skews and currency returns. The more significant outperformance occurred during the second half of this period. Deploying cash and a willingness to add more to the cyclical sectors supported the strong outperformance, although the selloff in emerging market equities during the last few weeks of March narrowed the outperformance gap. Stock selection in the financials sector supported performance, including our positions in the following banks: Bank Mandiri (Indonesia), Citigroup (U.S.), Bangkok Bank (Thailand) and Credicorp (Peru). Although all four banks were added because of compelling valuations, the former two increased throughout the period, whereas the latter two accelerated in the second half of 212 as investors flocked back to emerging market equities. One of our more prominent holdings, Sberbank of Russia, detracted slightly from overall performance after CIG - 277

2 a sharp downward move during the last two months of the period. The fall coincided with a general decline in the value of Russian stocks of just over 1% over a two-month period. The underweights and stock selection in the energy and materials sectors were also important contributors to performance. In materials, construction stocks Siam Cement (Thailand) and Semen Gresik (Indonesia) helped with the outperformance. Galaxy Entertainment (Hong Kong) and Noble Energy (U.S.) further added to the outperformance. Chinese consumer discretionary stocks and a Brazilian health care company, Fleury SA, were noticeable drags. Country allocations and foreign exchange also added to performance, with currency appreciations adding just more than 1 basis points of value. Country allocation outperformance was largely the result of overweights in Thailand and Indonesia and underweights in Brazil, Russia and South Africa. Bearish political, macro and/or sector views led to the underweightings of these countries. RECENT DEVELOPMENTS Emerging market equities were unable to sustain the upward momentum that started late in 212. After reaching an 11-month high on January 3, emerging market equities consolidated and investor interest started declining in February. This was also reflected in capital flows, with the momentum of inflows to emerging market stocks slowing in early 213 before turning negative late in February. Concerns about the growth profile for China in 213 (exacerbated by property tightening measures and a more assertive approach by Chinese authorities to dampen the rampant growth in shadow-banking credit), the failure of Brazilian manufacturing production to reaccelerate, and stalling reform in India all added to a generally more cautious approach towards emerging market equities. Lower commodity prices and European banking concerns late in the quarter added to the guarded approach towards riskier assets. Investors sentiment towards emerging markets has adjusted from highly optimistic at the end of 212 to a more cautious view. This caution towards some of the major emerging markets such as Brazil, India and Russia are warranted, especially in the absence of structural reforms. However, we still believe that China will be able to record economic growth of close to 8% in 213, although the recent reports about the rise of bird flu in the country raises near-term risks. Also, a strengthening U.S. dollar and increasing U.S. interest rates could pose a threat to overall emerging markets performance going forward. In the current environment, we continue to prefer countries with strong commitments to reforms and/or strong business cycle momentum, such as Mexico, Peru, Thailand and Turkey. On a sector basis, we remain cautious on commodity producers, while preferring domestic and consumer-focused companies. International Financial Reporting Standards As previously confirmed by the Canadian Accounting Standards Board ( AcSB ), most Canadian publicly accountable entities adopted International Financial Reporting Standards ( IFRS ), as published by the International Accounting Standards Board, on January 1, 211. However, the AcSB has allowed most investment funds to defer adoption of IFRS until fiscal years beginning on or after January 1, 214. Accordingly, the Fund will adopt IFRS for its fiscal period beginning April 1, 214, and will issue its initial financial statements in accordance with IFRS, including comparative information, for the interim period ending September 3, 214. 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, provides management services required in the day-to-day operations of the Fund. The Manager bears all of the operating expenses of the Fund (other than taxes, borrowing costs and new governmental fees) in return for a fixed administration fee. Management fee and fixed administration fee rates as at March 31, 213, for each of the classes are shown below: Annual management fee rate (%) Annual fixed administration fee rate (%) A Shares E Shares F Shares I Shares O Shares Paid directly by investor Paid directly by investor The Manager received $3.7 million in management fees and $.4 million in fixed administrative fees for the period. Management Fees Approximately 3% of total management fees were used to pay for sales and trailing commissions. The remaining 7% of management fees were used for investment management and other general administration. Broker commissions During the period, the Fund paid $5,923 in brokerage commissions to The Bank of Nova Scotia or its subsidiaries. The Bank of Nova Scotia has a significant interest in CI Financial Corp., the parent company of CI Investments Inc. Independent Review Committee The Fund received standing instructions from the Board of Governors ( BoG ) in its capacity as the Independent Review Committee ( IRC ) with respect to the following Related Party Transactions: a) trades in securities of CI Financial Corp. and The Bank of Nova Scotia; b) purchases or sales of securities of an issuer from or to another investment fund managed by the Manager (referred to as Inter-Fund Trades ); and c) mergers of funds with another fund that is subject to National Instrument ( Fund Mergers ) AT8 Shares IT8 Shares Paid directly by investor -

3 The applicable standing instructions require that Related Party Transactions be conducted in accordance with the Manager s policies and procedures. The Manager is required to advise the BoG of any material breach of a condition of the standing instructions. The standing instructions require, among other things, that the investment decision in respect to Related Party Transactions (a) are made by the Manager free from any influence by any entities related to the Manager and without taking into account any consideration to any affiliate of the Manager; (b) represent the business judgment of the Manager uninfluenced by considerations other than the best interests of the Fund; and (c) are made in compliance with the Manager s policies and procedures. Transactions made by the Manager under the standing instructions are subsequently reviewed by the BoG on a quarterly basis to monitor compliance. The Fund relied on the BoG s standing instructions regarding Related Party Transactions during this reporting period. 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. The shown below are based on net asset values. The Fund s Net Assets per Share ($) (1) (2) * A Shares Commencement of operations September 21, 1992 Year ended Year ended Year ended Year ended Year ended March 31, 213 March 31, 212 March 31, 211 March 31, 21 March 31, 29 $ $ $ $ $ (.39) (.39) (.4) (.35) (.34).26 (.22).72.7 (2.51).95 (.42) (4.24) 1.11 (.74) (6.64) - (.3) (.9) (.11) - - (.3) (.9) (.11) , , ,12 118,517 26,987 12,252 1,929 8,6 8,352 2, *Footnotes for the tables are found at the end of the Financial Highlights section.

5 FINANCIAL HIGHLIGHTS (cont d) The Fund s Net Assets per Share ($) (1) (2) * E Shares Commencement of operations October 4, 211 Period from Year ended Inception to March 31, 213 March 31, 212 $ $ (.27) (.12).19 (.16) (.18) (.2) (.7) (.2) (.7) *Footnotes for the tables are found at the end of the Financial Highlights section. 5

6 FINANCIAL HIGHLIGHTS (cont d) The Fund s Net Assets per Share ($) (1) (2) * F Shares Commencement of operations July 17, 2 Year ended Year ended Year ended Year ended Year ended March 31, 213 March 31, 212 March 31, 211 March 31, 21 March 31, 29 $ $ $ $ $ (.28) (.28) (.28) (.25) (.24).22 (.16).87 (.1) (2.87).68 (.71) (5.28) 1. (.77) (7.85) - (.4) (.11) (.14) - - (.4) (.11) (.14) ,51 2,666 2,542 2,369 1, *Footnotes for the tables are found at the end of the Financial Highlights section.

7 FINANCIAL HIGHLIGHTS (cont d) The Fund s Net Assets per Share ($) (1) (2) * I Shares Commencement of operations December 19, 26 Year ended Year ended Year ended Year ended Year ended March 31, 213 March 31, 212 March 31, 211 March 31, 21 March 31, 29 $ $ $ $ $ (2.58).8 (1.92) (2.24) 1.38 (1.11) (4.56) - (.2) (.7) (.8) - - (.2) (.7) (.8) ,515 3,841 26,974 28,317 23, ,332 2,728 3, *Footnotes for the tables are found at the end of the Financial Highlights section.

8 FINANCIAL HIGHLIGHTS (cont d) The Fund s Net Assets per Share ($) (1) (2) * O Shares Commencement of operations October 4, 211 Period from Year ended Inception to March 31, 213 March 31, 212 $ $ (.2) (.1).22 (.27) (.2) (.7) (.2) (.7) ,778 3, *Footnotes for the tables are found at the end of the Financial Highlights section. 8

9 FINANCIAL HIGHLIGHTS (cont d) The Fund s Net Assets per Share ($) (1) (2) * AT8 Shares Commencement of operations February 17, 212 Period from Year ended Inception to March 31, 213 March 31, 212 $ $ (.26) (.3).43 (.2) (.2) - (.8) (.13) (.82) (.13) *Footnotes for the tables are found at the end of the Financial Highlights section.

10 FINANCIAL HIGHLIGHTS (cont d) The Fund s Net Assets per Share ($) (1) (2) IT8 Shares Commencement of operations February 17, 212 Period from Year ended Inception to March 31, 213 March 31, 212 $ $ (.3) (.2) - (.8) (.13) (.82) (.13) (1) This information is derived from the Fund s audited annual financial statements. The net assets per share presented in the financial statements differs from the net asset value calculated for Fund pricing purposes. An explanation of these differences can be found in the notes to the financial statements or in footnote (7) below. (2) Net assets per share and dividends per share are based on the actual number of shares outstanding for the relevant class at the relevant time. The increase (decrease) from operations per share is based on the weighted average number of shares outstanding for the relevant class over the fiscal year. (3) Dividends were paid in cash or automatically reinvested in additional shares of the Fund. (4) Management expense ratio is calculated based on expenses charged to the Fund (excluding commissions and other portfolio transaction costs) and is expressed as an annualized percentage of daily average net asset value for the period. As of July 1, 21, Ontario combined the federal goods and services tax ("GST" - 5%) with the provincial retail sales tax ("PST" - 8%). The combination resulted in a Harmonized sales tax ("HST") rate of 13%. The Effective HST tax rate is calculated using the attribution percentage for each province based on shareholder residency and can be different from 13%. For any particular year, the rate shown will be prorated based on the different rates in effect during that year. For the year ended March 31, 211, the rate applied is 5% for the period April 1, 21 to June 3, 21 and the Fund's Effective HST rate for the period from July 1, 21 to March 31, 211. The rate shown for the year ended March 31, 211 is the time weighted average of these rates. Beginning April 1, 211 the HST rate is based on the residency of the shareholder. (5) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 1% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the fiscal year. The higher a Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a higher turnover rate and the performance of a Fund. Portfolio turnover rate is calculated by dividing the lesser of the cost of purchases and the proceeds of sales of portfolio securities for the year, and excluding cash and short term investments maturing in less than one year, and before assets acquired from a merger, if applicable, by the average of the market value of investments during the year. (6) The trading expense ratio represents total commissions and other portfolio transaction costs disclosed in the Statements of Operations expressed as an annualized percentage of daily average net asset value of the Fund during the year. (7) Section 14.2 of National Instrument requires the net assets of an investment fund to be calculated using the fair value of the Fund s assets and liabilities. Canadian GAAP requires a different valuation method for calculating net assets for financial statement purposes. For the purpose of processing shareholder transactions, net assets are calculated based on the closing market price (referred to as Net Asset Value ), while for financial statement purposes net assets are calculated based on bid/ask price (referred to as Net Assets ).

11 PAST PERFORMANCE This section describes how the Fund has performed in the past. Past returns do not indicate how the Fund will perform in the future. The information shown assumes that distributions made by the Fund in the years shown were reinvested in additional 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 the years shown and illustrate how the Fund s performance has changed from year to year. In percentage terms, the charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year, except where noted * 9.9 Mar. 212 Mar. 213 *This figure is for the period from February 17, 212 to March 31, 212. IT8 Shares Annual Compound Returns The following table shows the Fund s annual compound returns for each period indicated, compared to the Total Return Index (new) and the Plus Total Return Index (old) Dec. 23 Dec. 24 Mar. 26 Mar. 27 Mar. 28 Mar. 29 Mar. 21 Mar. 211 Mar. 212 Mar. 213 This figure is for the period from January 1, 25 to March 31, 26. *This figure is for the period from October 4, 211 to March 31, * 7.5 Mar. 212 Mar. 213 A Shares E Shares The Plus Total Return Index is a market capitalization weighted index that tracks the performance of LargeCap and MidCap companies in emerging markets inclusive of South Korea. The S&P Emerging LargeMidCap Plus Index is a subset of the S&P Emerging Broad Market Index which is a subset of the S&P Global Broad Market Index. The Total Return Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of emerging markets. The Index consists of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey Dec. 23 Dec. 24 Mar. 26 Mar. 27 Mar. 28 Mar. 29 Mar. 21 Mar. 211 Mar. 212 Mar. 213 This figure is for the period from January 1, 25 to March 31, 26. *This figure is for the period from December 19, 26 to March 31, * 9.8 Mar. 212 Mar * *This figure is for the period from October 4, 211 to March 31, 212. **This figure is for the period from February 17, 212 to March 31, Mar. 27 Mar. 28 Mar. 29 Mar. 21 Mar. 211 Mar. 212 Mar ** 6.8 Mar. 212 Mar. 213 F Shares I Shares O Shares AT8 Shares A discussion of the performance of the Fund as compared to the benchmarks is found in the Results of Operations section of this report. One Three Five Ten Since Year Years Years Years Inception A Shares (%) (.7) 9.9 n/a Total Return Index (new) (%) n/a Plus Total Return Index (old) (%) n/a E Shares (%) 7.5 n/a n/a n/a 15.5 Total Return Index (new) (%) 4.1 n/a n/a n/a 6.9 Plus Total Return Index (old) (%) 4. n/a n/a n/a 7.1 F Shares (%) n/a Total Return Index (new) (%) n/a Plus Total Return Index (old) (%) n/a I Shares (%) n/a 3.6 Total Return Index (new) (%) n/a 2.1 Plus Total Return Index (old) (%) n/a 2.9

12 One Three Five Ten Since Year Years Years Years Inception O Shares (%) 9.8 n/a n/a n/a 18.2 Total Return Index (new) (%) 4.1 n/a n/a n/a 6.9 Plus Total Return Index (old) (%) 4. n/a n/a n/a 7.1 AT8 Shares (%) 6.8 n/a n/a n/a 3.7 Total Return Index (new) (%) 4.1 n/a n/a n/a (.3) Plus Total Return Index (old) (%) 4. n/a n/a n/a (.4) IT8 Shares (%) 9.9 n/a n/a n/a 6. Total Return Index (new) (%) 4.1 n/a n/a n/a (.3) Plus Total Return Index (old) (%) 4. n/a n/a n/a (.4) 12

13 Summary of Investment Portfolio as at March 31, 213 Portfolio Breakdown Percentage of Category Net Asset Value (%) Portfolio Breakdown (cont d) Percentage of Category Net Asset Value (%) Top 25 Holdings Percentage of Security Name Net Asset Value (%) Country allocation South Korea Brazil Hong Kong Cash & Equivalents Thailand Cayman Islands Taiwan U.S.A China Indonesia Mexico India Bermuda U.K South Africa Turkey Chile Russia Poland Jersey Island Singapore Netherlands Netherlands Antilles Japan Switzerland Luxembourg Hungary Denmark Israel Canada Colombia Peru Panama Czech Republic Foreign Currency Forward Contracts Other Net Assets (Liabilities) (1.1) Sector allocation Financials Consumer Staples Information Technology Materials Consumer Discretionary Industrials Energy Cash & Equivalents Telecommunication Services Health Care Utilities Foreign Currency Forward Contracts Other Net Assets (Liabilities) (1.1) Cash & Equivalents Samsung Electronics Co., Ltd Taiwan Semiconductor Manufacturing Co., Ltd., ADR Sberbank of Russia Fleury S.A Noble Energy Inc Siam Cement PCL Semen Gresik Persero Tbk PT Bank Mandiri Persero Tbk PT Atrium European Real Estate Ltd Bangkok Bank PCL Cia De Bebidas Das Americas Cia Brasileira de Distribuicao Grupo Pao de Acucar., Preferred Want Want China Holdings Ltd Royal Dutch Shell PLC, Class A Citigroup Inc Galaxy Entertainment Group Ltd Kasikornbank PCL, Foreign Registered Shares Credicorp Ltd Hyundai Motor Co Global Logistic Properties Ltd African Bank Investments Ltd Turkcell Iletisim Hizmetleri AS, ADR Schlumberger Ltd Taiwan Mobile Co., Ltd Total Net Asset Value (in $ s) $22,966 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.