Portfolio Series Balanced Fund

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 Portfolio Series Balanced Fund (the Fund ) is to provide a balance between income and long-term capital growth while diversifying risk by investing in income and equity mutual funds. The portfolio advisor invests the assets of the Fund in units or shares of the underlying funds, rebalances the Fund s assets among the underlying funds based on the Fund s target asset allocations, and monitors the underlying funds and may make changes to the underlying funds, or the allocated percentages of the underlying funds without notice to unitholders. Strategic asset allocation is the principal investment strategy used to create a portfolio diversified by investment style, asset class, and geographic region. This generally includes Canadian equity, U.S. equity, international equity, Canadian fixedincome and global fixed-income securities. The portfolio advisor considers, among other factors, each underlying fund s investment objective and strategies in determining the Fund s target asset allocations, past performance and historical volatility in the context of a diversified holding of the underlying funds suitable for the investment objective of the Fund. RISK There were no changes to the Fund over the period of this report that materially affected the overall level of risk associated with the Fund. This Fund is suitable for investors who want capital growth and income while diversifying risk, are investing for the medium term, want to invest in an optimized portfolio of equity and income funds, and can tolerate low to medium risk. RESULTS OF OPERATIONS The net asset value of the Fund increased by $231.4 million to $3,965.3 million from March 31, 17 to March 31, 18. The Fund had net sales of $323.9 million during the year. The portfolio s performance increased assets by $132.4 million. The Fund paid distributions totalling $224.9 million. Class A units returned 2.6% after fees and expenses for the one-year period ended March 31, 18. Over the same time period, the Fund s benchmark returned 4.7%. The benchmark is a combination of the FTSE TMX Canada Universe Bond Total Return Index 4%, the MSCI World Total Return Index - 35% and the S&P/TSX Composite Total Return Index - 25%. The performance of the Fund s other classes is substantially similar to that of Class A units, except for differences in the structure of fees and expenses. For the returns of the Fund s other classes, please refer to the Past performance section. The following commentary pertains to the results of operations of the underlying funds. Strong economic growth, which became increasingly synchronized across developed and emerging markets, propelled global equities during the period. Global gross domestic product rose nearly 4%, and ongoing corporate earnings growth continued to stoke investor confidence. Stock markets worldwide generally posted double-digit total returns, led by Asian and emerging markets. Canadian stocks underperformed, however, held back by the anticipation of rising interest rates and continuing underperformance in the energy sector. Late in the period, markets became volatile. Beginning in late January, the U.S. market suffered its first official correction in more than a year, plunging 1% in less than two weeks. In the meantime, the S&P/TSX Composite Index lost 8%, although it had less ground to give up as its leading up to the correction had been smaller. While corporate earnings continued to accelerate through the end of the period, investor sentiment became cautious, with the focus turning to tightening financial conditions and higher interest rates. Rising trade tensions between the United States and China caused further angst. Central banks around the world responded to the accelerating economic backdrop by raising short-term interest rates. In mid-march, the U.S. Federal Reserve increased rates by one-quarter of a percentage point to 1.5%, However, the European Central Bank and Bank of Japan held their benchmark rates steady as they chose to pause their respective economic stimulus programs. Within the equity portion, weak relative performance from the international and U.S. equity portions detracted value. Strong relative performance from the Canadian equity portion and an allocation to emerging markets added value. Our equity allocation is more diversified than that of the Canadian economy and the S&P/TSX Composite Index. Our largest underweight exposure is in the financials sector and the positioning within the sector is more diversified than the benchmark. We had overweight exposure to defensive sectors, such as health care and consumer staples, and were underweight in cyclical and interestrate-sensitive sectors, such as energy and telecommunications services. We continue to use derivatives to help manage the risk of stock market decline. Specifically, we held a market hedge through S&P 5 derivatives to limit portfolio volatility. This hedge remains in place and will be removed only when the risk-return trade-off becomes favourable. Within the income portion, our diversified exposure to global dividend-paying equities, high-yield corporate bonds and global bonds, as well as lower duration on the bond portion added relative value. However, exposure to the U.S. dollar hurt relative performance. In the income portion of the portfolio, our core investment objectives remain preserving capital and outpacing inflation over a three-year period. We focus on careful portfolio construction and asset allocation, built on a foundation of government bonds for safety and income. Interest rate sensitivity is hedged by diversifying into other asset CIG - 771

2 classes, such as gold bullion, corporate bonds and stocks. Within the corporate bond portion, we maintain a short term to maturity as we near the latter stages of the economic cycle, when credit defaults could become more frequent. Currency hedging mitigated some foreign investment losses. We continue to attempt to limit the effects of exchange rate fluctuations by maintaining our long-standing, partial hedge on the portfolio. The U.S. deficit and debt expansion are significant concerns, as we believe these will weaken the U.S. dollar. We are aggressively decreasing our U.S. exposure by selling assets denominated in the greenback and increasing our hedge ratio. Overall, the Fund underperformed its benchmark for the period. RECENT DEVELOPMENTS As rising short-term interest rates filter through the global economy, we will be watching for signs of slowing economic growth. This may be somewhat offset by the benefits of U.S. tax reform, which should stimulate capital spending and support economic growth in the second half of 18 and beyond. In Canada, housing and consumer debt levels will be closely monitored as these could make the domestic economy vulnerable to a potential slowdown. Effective April 3, 18, Karen Fisher became a member of the CI Board of Governors ( BOG ) and the Independent Review Committee ( IRC ) of the Fund. Meanwhile, Christopher Hopper resigned from the role as a member of the BOG and IRC. RELATED PARTY TRANSACTIONS Manager, Portfolio Advisor, Trustee and Registrar CI Investments Inc. is the Manager, Portfolio Advisor, Trustee 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. fee and fixed administration fee rates as at March 31, 18, for each of the classes are shown below: Annual management fee rate (%) Annual fixed administration fee rate (%) Class A 2.. Class A Class A Class A Class A Class A Class AT5 2.. Class A1T Class A2T Class A3T Class AT8 2.. Class A1T Class A2T Annual management fee rate (%) Annual fixed administration fee rate (%) Class A3T Class E Class EF Class EFT Class EFT Class ET Class ET Class F.9. Class F1.85. Class F Class F Class F Class F5.6.1 Class FT5.9. Class F1T5.85. Class FT8.9. Class F1T8.85. Class F2T Class F3T Class I Paid directly by investor - Class O Paid directly by investor.15 Class OT5 Paid directly by investor.15 Class OT8 Paid directly by investor.15 Class P Paid directly by investor. Class PT5 Paid directly by investor. Class PT8 Paid directly by investor. The Manager received $47.2 million in management fees and $5. million in fixed administration fees for the year. Fees Approximately 26% of total management fees were used to pay for sales and trailing commissions. The remaining 74% of management fees were used for investment management and other general administration. Inter-Fund Trading Inter-fund trading occurs when a Fund purchases or sells a security of any issuer from or to another Fund managed by the Manager. These transactions are executed through market intermediaries and under prevailing market terms and conditions. The Independent Review Committee reviews such transactions during scheduled meetings. During the year ended March 31, 18 the Fund executed inter-fund trades.

3 Independent Review Committee The Fund received standing instructions from the Fund s Independent Review Committee with respect to the following related party transactions: a) trades in securities of CI Financial Corp.; b) purchases or sales of securities of an issuer from or to another investment fund managed by the Manager; c) purchases or sales of other investment funds managed by the Manager or their affiliates; and d) mergers involving the Fund and another fund managed by the Manager that is subject to National Instrument Investment Funds. The applicable standing instructions require that related party transactions be conducted in accordance with the Manager s policies and procedures and that the Manager advise the IRC of any material breach of a condition of the standing instructions. The standing instructions require, among other things, that investment decisions in respect of related party transactions (a) are free from any influence by an entity related to the Manager and without taking into account any consideration relevant to an entity related to the Manager; (b) represent the business judgment of the Manager uninfluenced by considerations other than the best interests of the Fund; (c) are made in compliance with the Manager s policies and procedures; and (d) achieve a fair and reasonable result for the Fund. Transactions made by the Manager under the standing instructions are subsequently reviewed by the IRC on a quarterly basis to monitor compliance. The Fund relied on the IRC s standing instructions regarding related party transactions during this reporting year. 3

4 FINANCIAL HIGHLIGHTS The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the past five years, as applicable. Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class A Commencement of operations November 9, 1988 Mar. 31, (.7) 1.13 (.41).76 (.23) (.7) (1.1) - (1.4) Mar. 31, (.71) 3. (.5) 2.85 (.35) (.9) (2.16) (.5) (2.65) Mar. 31, (.72).83 (2.56) (1.5) (.31) (.8) (.46) - (.85) Mar. 31, (.7) (.18) (.6) - - (.24) 3.72 Mar. 31, (.63) (.17) (.5) - - (.22) Class A1 Mar. 31, (.).53 (.49).9 (.8) (.2) (.39) - (.49) 9.55 Class A2 Mar. 31, (.19).54 (.51).9 (.8) (.2) (.4) - (.5) 9.54 Class A3 Mar. 31, (.19).53 (.53).6 (.9) (.2) (.4) - (.51) 9.54 Class A4 Mar. 31, (.18).52 (.5).9 (.9) (.2) (.41) - (.52) 9.55 Class A5 Mar. 31, (.17).43 (.22).29 (.9) (.3) (.42) - (.54) 9.55 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

5 Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class AT5 Commencement of operations October 31, 7 Mar. 31, (.18).29 (.9).21 (.6) (.2) (.66) - (.74) 7.3 Mar. 31, (.19).84 (.11).77 (.1) (.2) (.99) (.2) (1.13) 7.57 Mar. 31, (.21).22 (.72) (.44) (.9) (.2) (.56) - (.67) 7.94 Mar. 31, (.21) (.5) (.2) - (.42) (.49) 9.4 Mar. 31, (.) (.6) (.2) - (.39) (.47) 8.57 Class A1T5 Mar. 31, (.19).52 (.48).1 (.8) (.2) (.85) - (.95) 9.1 Class A2T5 Mar. 31, (.19) 1.19 (2.78) (1.38) (.8) (.2) (.84) - (.94) 9.1 Class A3T5 Mar. 31, (.18).67 (1.2) (.26) (.8) (.2) (.85) - (.95) 9.1 Class AT8 Commencement of operations October 1, 7 Mar. 31, (.13). (.5).16 (.5) (.1) (.65) - (.71) 5.3 Mar. 31, (.14).63 (.8).58 (.7) (.2) (.94) (.2) (1.5) 5.59 Mar. 31, (.16).18 (.57) (.34) (.7) (.2) (.64) - (.73) 6.6 Mar. 31, (.17) (.5) (.1) - (.55) (.61) 7.13 Mar. 31, (.16) (.5) (.1) - (.52) (.58) 6.97 Class A1T8 Mar. 31, (.18).54 (.56).5 (.8) (.2) (1.11) - (1.21) 8.83 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

6 Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class A2T8 Mar. 31, (.19).39 (.39).4 (.8) (.2) (1.1) - (1.) 8.84 Class A3T8 Mar. 31, (.18).46 (.4).12 (.8) (.2) (1.11) - (1.21) 8.84 Class E Commencement of operations July 29, 15 Mar. 31, (.).43 (.23).26 (.8) (.2) (.37) - (.47) 9. Mar. 31, (.) 1.22 (.37).95 (.12) (.3) (.71) (.2) (.88) 9.21 Mar. 31, (.13).54 (.85) (.18) (.11) (.3) (.16) - (.3) 9.15 Class EF Commencement of operations July 29, 15 Mar. 31, (.1).4 (.24).3 (.1) (.3) (.46) - (.59) 8.93 Mar. 31, (.1) 1.38 (.57) 1. (.13) (.3) (.81) (.2) (.99) 9.15 Mar. 31, (.6).53 (.84) (.12) (.15) (.4) (.22) - (.41) 9.1 Class EFT5 Commencement of operations July 29, 15 Mar. 31, (.9).34 (.13).34 (.9) (.2) (.82) - (.93) 7.77 Mar. 31, (.1) 1.29 (.41) 1.5 (.12) (.3) (1.) (.3) (1.38) 8.37 Mar. 31, (.7).25 (.87) (.47) (.15) (.4) (.54) - (.73) 8.78 Class EFT8 Commencement of operations July 29, 15 Mar. 31, (.9).32 (.14).3 (.8) (.2) (1.) - (1.1) 7.12 Mar. 31, (.1).94 (.15).96 (.12) (.3) (1.43) (.3) (1.61) 7.92 Mar. 31, (.7).25 (.86) (.47) (.15) (.4) (.73) - (.92) 8.59 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

7 Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class ET5 Commencement of operations July 29, 15 Mar. 31, (.17).36 (.25).16 (.7) (.2) (.76) - (.85) 7.82 Mar. 31, (.).96 (.14).89 (.11) (.3) (1.12) (.3) (1.29) 8.42 Mar. 31, (.13) 1.41 (1.47).21 (.11) (.3) (.48) - (.62) 8.83 Class ET8 Commencement of operations July 29, 15 Mar. 31, (.17).32 (.14).22 (.7) (.2) (.94) - (1.3) 7.17 Mar. 31, (.19).94 (.15).87 (.11) (.3) (1.35) (.3) (1.52) 7.97 Mar. 31, (.14).25 (.87) (.55) (.11) (.3) (.67) - (.81) 8.64 Class F Commencement of operations November 17, Mar. 31, (.17).58 (.23).55 (.15) (.4) (.69) - (.88) Mar. 31, (.17) 1.69 (.38) 1.57 (.) (.5) (1.22) (.3) (1.5) 14.7 Mar. 31, (.18).46 (1.33) (.57) (.22) (.6) (.32) - (.6) 14. Mar. 31, (.17) (.22) (.7) - - (.29) Mar. 31, (.16) (.21) (.6) - - (.27) 13.7 Class F1 Mar. 31, (.1).53 (.53).15 (.1) (.3) (.48) - (.61) 9.53 Class F2 Mar. 31, (.1).52 (.46).22 (.1) (.3) (.49) - (.62) 9.53 Class F3 Mar. 31, (.9).66 (.65).18 (.11) (.3) (.5) - (.64) 9.53 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

8 Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class F4 Mar. 31, (.8).46 (.3).33 (.11) (.3) (.5) - (.64) 9.53 Class F5 Mar. 31, (.7).45 (.66) (.4) (.11) (.3) (.51) - (.65) 9.53 Class FT5 Commencement of operations January 1, 1 Mar. 31, (.11).38 (.17).34 (.1) (.3) (.9) - (1.3) 8.55 Mar. 31, (.11) 1.16 (.29) 1.5 (.14) (.3) (1.32) (.3) (1.52) 9.22 Mar. 31, (.12).22 (.88) (.46) (.16) (.4) (.76) - (.96) 9.68 Mar. 31, (.12) (.17) (.5) - (.51) (.73) 11.4 Mar. 31, (.12) (.17) (.5) - (.48) (.7) 1.48 Class F1T5 Mar. 31, (.1).4 (.39).14 (.1) (.3) (.93) - (1.6) 9.9 Class FT8 Commencement of operations December 23, 11 Mar. 31, (.1).3 (.1).32 (.9) (.3) (1.12) - (1.24) 7.99 Mar. 31, (.11) 1. (.36) 1.1 (.14) (.3) (1.6) (.4) (1.81) 8.9 Mar. 31, (.12).44 (1.19) (.52) (.16) (.4) (1.1) - (1.3) 9.66 Mar. 31, (.13) (.18) (.6) - (.87) (1.11) Mar. 31, (.13) (.18) (.5) - (.83) (1.6) Class F1T8 Mar. 31, (.1) (.1) (.3) (1.19) - (1.32) 8.82 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

9 Net Assets per Unit ($) (1) (2) (4) * Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class F2T8 Mar. 31, (.1).39 (.39).13 (.1) (.3) (1.) - (1.33) 8.82 Class F3T8 Mar. 31, (.8).55 (.65).7 (.1) (.3) (1.) - (1.33) 8.82 Class I Commencement of operations November 1, 1996 Mar. 31, (.54) 1.51 (.38) (.11) (1.79) - (2.28) Mar. 31, (.55) 3.72 (.48) (.12) (2.96) (.7) (3.63) 3.12 Mar. 31, (2.7) (.84) (.62) (.17) (.92) - (1.71) 3.1 Mar. 31, (.77) (.24) - - (1.1) Mar. 31, (.71) (.22) - - (.93) Class O Commencement of operations July 26, 13 Mar. 31, (.2).5 (.25).53 (.14) (.4) (.65) - (.83) 1.87 Mar. 31, (.2) 1.37 (.32) 1.37 (.18) (.4) (1.8) (.2) (1.32) Mar. 31, (.2).47 (1.14) (.29) (.22) (.6) (.33) - (.61) 11.9 Mar. 31, (.2) (.27) (.9) - - (.36) 12.2 Mar. 31, (.1) (.25) (.8) - - (.33) 1.87 Class OT5 Commencement of operations July 29, 15 Mar. 31, (.1).34 (.14).4 (.1) (.3) (.88) - (1.1) 7.71 Mar. 31, (.1).96 (.15) 1.6 (.14) (.3) (1.28) (.3) (1.48) 8.32 Mar. 31, (.1).62 (.81).7 (.18) (.5) (.59) - (.82) 8.74 Class OT8 Commencement of operations July 29, 15 Mar. 31, (.1).32 (.14).37 (.1) (.3) (1.6) - (1.19) 7.7 Mar. 31, (.1).88 (.15).98 (.13) (.3) (1.5) (.3) (1.69) 7.88 Mar. 31, (.1).25 (.86) (.42) (.18) (.5) (.78) - (1.1) 8.56 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

10 Net Assets per Unit ($) (1) (2) (4) Increase (decrease) from operations: Distributions: Total Realized Unrealized Total increase From net investment Net assets Net assets at the beginning Total expenses (excluding (decrease) from income (excluding From From capital Total at the end of the year of year (2) revenue distributions) the year the year operations (2) dividends) dividends (2, 3) Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class P Mar. 31, (.2).53 (.51).25 (.12) (.3) (.56) - (.71) 9.52 Class PT5 Mar. 31, (.2).4 (.39).22 (.12) (.3) (1.1) - (1.16) 9.7 Class PT8 Mar. 31, (.2).39 (.39).21 (.12) (.3) (1.27) - (1.42) 8.8 (1) This information is derived from the Fund s audited annual financial statements. (2) Net assets per unit and distributions per unit are based on the actual number of units outstanding for the relevant class at the relevant time. The increase (decrease) in net assets from operations per unit is based on the weighted average number of units outstanding for the relevant class over the fiscal year. (3) Distributions are automatically reinvested in additional units of the Fund. (4) This information is provided for the years ended March 31.

11 Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) before taxes (2) after taxes (2) Effective HST rate for the year (2) Harmonized Trading Portfolio sales tax (2) (3) turnover rate (4) $ s s % % % % % % Class A Commencement of operations November 9, 1988 Mar. 31, 18 1,849,462 66, Mar. 31, 17 2,229,291 78, Mar. 31, 16 2,298,83 81, Mar. 31, 15 2,321,873 75, Mar. 31, 14 1,975,934 71, Class A1 Mar. 31, ,985 3, Class A2 Mar. 31, 18 68,638 7, Class A3 Mar. 31, 18,366 2, Class A4 Mar. 31, 18 5, Class A5 Mar. 31, 18 1, *Footnotes for the tables are found at the end of the Financial Highlights section.

12 Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $ s s % % % % % % Class AT5 Commencement of operations October 31, 7 Mar. 31, 18 4, Mar. 31, 17 5, Mar. 31, 16 6, Mar. 31, 15 6, Mar. 31, 14 4, Class A1T5 Mar. 31, Class A2T5 Mar. 31, Class A3T5 Mar. 31, Class AT8 Commencement of operations October 1, 7 Mar. 31, 18 2, Mar. 31, 17 4, Mar. 31, 16 4, Mar. 31, 15 5, Mar. 31, 14 4, Class A1T8 Mar. 31, *Footnotes for the tables are found at the end of the Financial Highlights section.

13 Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $ s s % % % % % % Class A2T8 Mar. 31, Class A3T8 Mar. 31, Class E Commencement of operations July 29, 15 Mar. 31, 18 18,513, Mar. 31, 17 84,13 9, Mar. 31, 16 27,85 3, Class EF Commencement of operations July 29, 15 Mar. 31, 18 13,474 1, Mar. 31, 17 8, Mar. 31, 16 1, Class EFT5 Commencement of operations July 29, 15 Mar. 31, Mar. 31, Mar. 31, Class EFT8 Commencement of operations July 29, 15 Mar. 31, Mar. 31, Mar. 31, *Footnotes for the tables are found at the end of the Financial Highlights section.

14 Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $ s s % % % % % % Class ET5 Commencement of operations July 29, 15 Mar. 31, 18 1, Mar. 31, Mar. 31, Class ET8 Commencement of operations July 29, 15 Mar. 31, Mar. 31, Mar. 31, Class F Commencement of operations November 17, Mar. 31, 18 43,41 3, Mar. 31, 17 39,61 2, Mar. 31, 16 26,63 1, Mar. 31, 15 18,826 1, Mar. 31, 14 1, Class F1 Mar. 31, 18 14,8 1, Class F2 Mar. 31, 18 3, Class F3 Mar. 31, *Footnotes for the tables are found at the end of the Financial Highlights section.

15 Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $ s s % % % % % % Class F4 Mar. 31, Class F5 Mar. 31, Class FT5 Commencement of operations January 1, 1 Mar. 31, 18 1, Mar. 31, 17 1, Mar. 31, Mar. 31, Mar. 31, Class F1T5 Mar. 31, Class FT8 Commencement of operations December 23, 11 Mar. 31, Mar. 31, Mar. 31, Mar. 31, Mar. 31, Class F1T8 Mar. 31, *Footnotes for the tables are found at the end of the Financial Highlights section.

16 Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $ s s % % % % % % Class F2T8 Mar. 31, Class F3T8 Mar. 31, Class I Commencement of operations November 1, 1996 Mar. 31, 18 1,3,819 44, Mar. 31, 17 1,265,241 42, Mar. 31, 16 1,121,342 37, Mar. 31, 15 1,235,598 37, Mar. 31, 14 1,93,435 37, Class O Commencement of operations July 26, 13 Mar. 31, ,195 13, Mar. 31, 17 92,794 8, Mar. 31, 16 49,1 4, Mar. 31, 15 15,265 1, Mar. 31, 14 1, Class OT5 Commencement of operations July 29, 15 Mar. 31, Mar. 31, Mar. 31, Class OT8 Commencement of operations July 29, 15 Mar. 31, Mar. 31, Mar. 31, *Footnotes for the tables are found at the end of the Financial Highlights section.

17 Ratios and Supplemental Data (1) (5) Total net assets (5) Number of units outstanding (5) before taxes (2) Harmonized sales tax (2) after taxes (2) Effective HST rate for the year (2) Trading (3) Portfolio turnover rate (4) $ s s % % % % % % Class P Mar. 31, 18 3, Class PT5 Mar. 31, Class PT8 Mar. 31, (1) This information is derived from the Fund s audited annual financial statements. (2) is calculated based on expenses charged to the Fund (excluding commissions and other portfolio transaction costs) and is expressed as an annualized percentage of daily average net assets for the year, including the Fund s proportionate share of any underlying fund(s) expenses, if applicable. The Effective HST tax rate is calculated using the attribution percentage for each province based on unitholder residency and can be different from 13%. (3) The trading represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net assets during the year, including the Fund s proportionate share of such expenses of any underlying fund(s), if applicable. (4) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 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 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 monthly fair value of investments during the year. (5) This information is provided for the years ended March 31.

18 PAST PERFORMANCE This section describes how the Fund has performed in the past. Remember, past returns do not indicate how the Fund will perform in the future. The information shown assumes that distributions made by the Fund in the years shown were reinvested in additional units 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. Class A Class AT5 Class AT8 Class E Mar. 9 Mar. 1 Mar. 11 Mar. 12 Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Mar. 9 Mar. 1 Mar. 11 Mar. 12 Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Mar. 9 Mar. 1 Mar. 11 Mar. 12 Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Mar. 16 Mar. 17 Mar. 18 Class EF Class EFT5 Class EFT8 Class ET Mar. 16 Mar. 17 Mar. 18 Mar. 16 Mar. 17 Mar. 18 Mar. 16 Mar. 17 Mar. 18 Mar. 16 Mar. 17 Mar. 18 Class ET8 Class F Class FT5 Class FT Mar. 16 Mar. 17 Mar. 18 Mar. 9 Mar. 1 Mar. 11 Mar. 12 Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Mar. 1 Mar. 11 Mar. 12 Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Mar. 12 Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Class I Class O Class OT5 Class OT Mar. 9 Mar. 1 Mar. 11 Mar. 12 Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Mar. 16 Mar. 17 Mar. 18 Mar. 16 Mar. 17 Mar. 18

19 1 16 return is for the period from July 29, 15 to March 31, return is for the period from January 1, 1 to March 31, return is for the period from December 23, 11 to March 31, return is for the period from July 26, 13 to March 31, 14.

20 Annual Compound Returns The following table shows the Fund s annual compound returns for each year indicated, compared to the Blended Index composed of: (4% - FTSE TMX Canada Universe Bond Total Return Index, 35% - MSCI World Total Return Index and 25% - S&P/TSX Composite Total Return Index); the FTSE TMX Canada Universe Bond Total Return Index, the MSCI World Total Return Index and the S&P/TSX Composite Total Return Index. The FTSE TMX Canada Universe Bond Total Return Index is a market capitalization weighted index that measures the performance of the Canadian investment-grade fixed income market. The Index consists of fixed rate bonds denominated in Canadian dollars, with a remaining effective term to maturity of at least one year, rated BBB or higher. The Index is comprised of four main credit or borrower categories: bonds issued by the Government of Canada (including Crown Corporations), Provincial bonds (including provincially-guaranteed securities), Municipal bonds and Corporate bonds. The Corporate sector is further divided into sub-sectors based on major industry groups: Financial, Communication, Industrial, Energy, Infrastructure, Real Estate and Securitization. The Corporate sector is also divided into sub-indices based on credit rating: a combined AAA/AA sector, a single A sector and a BBB sector. The MSCI World Total Return Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The Index consists of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States of America. The S&P/TSX Composite Total Return Index is a float-adjusted market capitalization weighted index which is the principal broad measure of the Canadian equity market. It includes common stocks and income trust units of companies incorporated in Canada which are listed on the Toronto Stock Exchange. A discussion of the performance of the Fund as compared to the benchmark is found in the Results of Operations section of this report. One Year (%) Three Years (%) Five Years (%) Ten Years (%) Since Inception (%) Class A n/a Blended Index n/a FTSE TMX Canada Universe Bond Total Return Index n/a MSCI World Total Return Index n/a S&P/TSX Composite Total Return Index n/a Class AT n/a Blended Index n/a FTSE TMX Canada Universe Bond Total Return Index n/a MSCI World Total Return Index n/a S&P/TSX Composite Total Return Index n/a Class AT n/a Blended Index n/a FTSE TMX Canada Universe Bond Total Return Index n/a MSCI World Total Return Index n/a S&P/TSX Composite Total Return Index n/a Class E 2.8 n/a n/a n/a 2.6 Blended Index 4.7 n/a n/a n/a 4.9 FTSE TMX Canada Universe Bond Total Return Index 1.4 n/a n/a n/a 1.5 MSCI World Total Return Index 1.6 n/a n/a n/a 8.1 S&P/TSX Composite Total Return Index 1.7 n/a n/a n/a 5.4 Class EF 3.9 n/a n/a n/a 3.7 Blended Index 4.7 n/a n/a n/a 4.9 FTSE TMX Canada Universe Bond Total Return Index 1.4 n/a n/a n/a 1.5 MSCI World Total Return Index 1.6 n/a n/a n/a 8.1 S&P/TSX Composite Total Return Index 1.7 n/a n/a n/a 5.4 Class EFT5 4. n/a n/a n/a 3.7 Blended Index 4.7 n/a n/a n/a 4.9 FTSE TMX Canada Universe Bond Total Return Index 1.4 n/a n/a n/a 1.5 MSCI World Total Return Index 1.6 n/a n/a n/a 8.1 S&P/TSX Composite Total Return Index 1.7 n/a n/a n/a 5.4 Class EFT8 3.9 n/a n/a n/a 3.7 Blended Index 4.7 n/a n/a n/a 4.9 FTSE TMX Canada Universe Bond Total Return Index 1.4 n/a n/a n/a 1.5 MSCI World Total Return Index 1.6 n/a n/a n/a 8.1 S&P/TSX Composite Total Return Index 1.7 n/a n/a n/a 5.4

21 One Year (%) Three Years (%) Five Years (%) Ten Years (%) Since Inception (%) Class ET5 2.9 n/a n/a n/a 2.6 Blended Index 4.7 n/a n/a n/a 4.9 FTSE TMX Canada Universe Bond Total Return Index 1.4 n/a n/a n/a 1.5 MSCI World Total Return Index 1.6 n/a n/a n/a 8.1 S&P/TSX Composite Total Return Index 1.7 n/a n/a n/a 5.4 Class ET8 2.8 n/a n/a n/a 2.5 Blended Index 4.7 n/a n/a n/a 4.9 FTSE TMX Canada Universe Bond Total Return Index 1.4 n/a n/a n/a 1.5 MSCI World Total Return Index 1.6 n/a n/a n/a 8.1 S&P/TSX Composite Total Return Index 1.7 n/a n/a n/a 5.4 Class F n/a Blended Index n/a FTSE TMX Canada Universe Bond Total Return Index n/a MSCI World Total Return Index n/a S&P/TSX Composite Total Return Index n/a Class FT n/a 7.4 Blended Index n/a 7.8 FTSE TMX Canada Universe Bond Total Return Index n/a 3.7 MSCI World Total Return Index n/a 13.9 S&P/TSX Composite Total Return Index n/a 6. Class FT n/a 8.7 Blended Index n/a 8.8 FTSE TMX Canada Universe Bond Total Return Index n/a 3. MSCI World Total Return Index n/a 16.5 S&P/TSX Composite Total Return Index n/a 7.2 Class I n/a Blended Index n/a FTSE TMX Canada Universe Bond Total Return Index n/a MSCI World Total Return Index n/a S&P/TSX Composite Total Return Index n/a Class O n/a n/a 8.8 Blended Index n/a n/a 8.8 FTSE TMX Canada Universe Bond Total Return Index n/a n/a 3.8 MSCI World Total Return Index n/a n/a 15.3 S&P/TSX Composite Total Return Index n/a n/a 7.5 Class OT5 4.9 n/a n/a n/a 4.6 Blended Index 4.7 n/a n/a n/a 4.9 FTSE TMX Canada Universe Bond Total Return Index 1.4 n/a n/a n/a 1.5 MSCI World Total Return Index 1.6 n/a n/a n/a 8.1 S&P/TSX Composite Total Return Index 1.7 n/a n/a n/a 5.4 Class OT8 4.8 n/a n/a n/a 4.6 Blended Index 4.7 n/a n/a n/a 4.9 FTSE TMX Canada Universe Bond Total Return Index 1.4 n/a n/a n/a 1.5 MSCI World Total Return Index 1.6 n/a n/a n/a 8.1 S&P/TSX Composite Total Return Index 1.7 n/a n/a n/a

22 SUMMARY OF INVESTMENT PORTFOLIO as at March 31, 18 Category % of Net Assets Category % of Net Assets Top Holdings % of Net Assets Country allocation Long Positions Fund(s) Exchange-Traded Fund(s) Cash & Equivalents Options Contracts....2 Other Net Assets (Liabilities).... Foreign Currency Forward Contracts... (.3) Total Long Positions Short Positions Options Contracts... (.1) Total Short Positions... (.1) Sector allocation Long Positions Fund(s) Exchange-Traded Fund(s) Cash & Equivalents Options Contracts....2 Other Net Assets (Liabilities).... Foreign Currency Forward Contracts... (.3) Total Long Positions Short Positions Options Contracts... (.1) Total Short Positions... (.1) Signature Canadian Bond Fund (Class I) Signature Global Bond Fund (Class I) Signature Corporate Bond Fund (Class I) Synergy Canadian Corporate Class (A Shares) Cambridge Canadian Equity Corporate Class (A Shares) Cambridge Canadian Dividend Fund (Class I) CI American Managers Corporate Class (A Shares) CI International Value Corporate Class (A Shares) First Asset MSCI World Low Risk Weighted ETF CI Income Fund (Class I) Cambridge Global Equity Corporate Class (A Shares) Signature Select Canadian Fund (Class I) CI Canadian Investment Fund (Class I) CI American Small Companies Corporate Class (A Shares) Harbour Fund (Class I) Signature Emerging Markets Corporate Class (A Shares) Cash & Equivalents Black Creek International Equity Fund (Class I) Signature Diversified Yield II Fund (Class I) Signature Tactical Bond Pool (Class I) CI American Value Corporate Class (A Shares) CI U.S. Income US$ Pool (Class I) Total Net Assets (in $ s) $3,965,261 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.