Signature Global Bond Corporate Class

Transcription

1 Management Report of Fund Performance for the year ended March 31, 217 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, MC 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 Signature Global Bond Corporate Class (the Fund ) is to obtain long-term total return. It invests in units of the Signature Global Bond Fund. When we determine that it is cost-efficient for shareholders to do so, the Fund will instead invest directly in a portfolio of securities. -1.%, Class EFT8 shares was -1.4%, Class F shares was -1.9%, Class I shares was -.6%, Class IT8 shares was -.7%, Class O shares was -.8%, Class OT shares was -.8% and Class OT8 shares was -.9%, as compared to the return of its benchmark of -.7%. The benchmark is the J.P. Morgan Global Government Bond Total Return Index. In order to achieve the objectives of the Fund, the portfolio advisor seeks to select securities that it believes have fundamental value that is not reflected in their credit rating and yield. The portfolio advisor uses techniques such as fundamental analysis to assess growth potential. This means evaluating the financial condition and management of an issuer, its industry and the overall economy. The portfolio advisor analyzes financial data, assesses the quality of management, and conducts company interviews. The portfolio advisor analyzes whether companies can generate enough cash to service debt and reinvest into their business over the long-term. The Fund may use derivatives, but only as permitted by securities regulations. In order to earn additional income, it may enter into securities lending transactions, repurchase transactions and reverse repurchase transactions, to the extent permitted by securities regulations. The underlying Fund has received permission from securities regulatory authorities to invest and hold up to 3% of its assets in securities issued or guaranteed by any government or its agency or by certain supranational agencies as long as these securities meet or exceed minimum credit ratings. There is no limit on how much the Fund can invest in securities issued or guaranteed by Canadian federal or provincial governments or their agencies, or by the U.S. government or its agencies. 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. The Fund is suitable for investors who want to want to receive income, are investing for the medium term, and can tolerate low to medium risk. RESULTS OF OPERATIONS The net asset value of the Fund decreased by $11.8 million to $63.3 million from March 31, 216 to March 31, 217. The Fund had net redemptions of $6.3 million during the year. The portfolio s performance decreased assets by $2.1 million. The Fund paid distributions totalling $3.4 million. The one-year return for Class A shares was -2.6%, Class AT shares was -2.8%, Class AT8 shares was -2.8%, Class E shares was -1.9%, Class ET shares was -2.%, Class ET8 shares was -2.1%, Class EF shares was -1.3%, Class EFT shares was The following commentary pertains to the results of operations of Signature Global Bond Fund. For all the focus on political wind changes of late, one constant in the background is that there is limited appetite for additional monetary stimulus across major developed market central banks. Although this is only one facet of the broader policy imbalances that still exist today, opposition to greater accommodation and some willingness to remove it in the U.S. case effectively diminished the presence of a substantial tailwind for bond markets. The burden of proof has now shifted to the state of the economic recovery to justify further bond market concessions. Cyclical gains in both U.S. and global economic activity and inflation that kicked off late last year appear to have hit their stride early in 217. Markets have begun to take this for granted, and looked on toward any soft points in this data flow, and the potential for policy actions to either reinforce the recovery or cut it short. Such developments are most visible within concerns around the progress of the U.S. fiscal policy agenda, as well as the potential for regime changes following key European elections this year. In concert, these forces have conspired to keep nominal interest rates contained since the beginning of 217. Over the course of the first quarter, nominal -year interest rates in the U.S., Canada and the U.K. have fallen by.%,.% and.%, respectively, while in Germany and Japan, these rates have risen individually by.12% and.2%, respectively. Over the past 12 months, the Fund slightly underperformed its benchmark. The total return of the portfolio was primarily driven by our security selection decisions within developed market government bonds as well as our asset allocations to emerging market sovereign bonds, investment-grade corporate bonds and U.S. Treasury Inflation-Protected Securities (TIPS.) Collectively, these added 1.68% to the strategy s total return over the past year. In terms of alpha performance, the strategy s duration and curve positioning contributed.9%, however, currency positioning detracted -1.6% over the reporting period. In our valuations, the U.S. benchmark -year bonds are trading within the fair value range of about 2.% - 2.%. 1 CIG - 232

2 Management Report of Fund Performance for the year ended March 31, 217 At period-end, the upward trend in nominal interest rates has waned as U.S. Treasuries have remained range bound and the market s inflation expectations have flat lined just shy of 2% with risks tilted towards a fall in expectations going forward. Appropriately, the Fund s TIPS exposure was substantially reduced throughout the quarter to less than 8%. At the end of the first quarter, French government bond spreads (to German Bunds) remain volatile and elevated as the market turns its attention to the French presidential election at the end of April. As such, the strategy remains underweight exposure to French and European periphery government bonds and overweight Canadiandenominated provincial government bonds. In addition, the strategy maintains its overweight Canadian-denominated bonds at the expense of yen-denominated bonds. As risky assets (such as stocks and commodities) continue to perform, the Canadian dollar should strengthen relative to deflationary currencies (such as the yen and euro), while the range bound performance in fixed-income markets favours higher yielding bond markets such as Canada and United States. RECENT DEVELOPMENTS Some market observers are citing the recent pitfalls with implementing select U.S. legislative proposals and the rise of Euro-skeptic French presidential candidates as hailing the end of the reflationary shift in the bond market that took hold in late 216. Those relying solely on movements in political sentiment risk losing sight of reality, namely that the impact on long-term potential economic activity in the U.S. and globally is more uncertain than surface level policy prescriptions would suggest. By contrast, cyclical expansions and contractions will continue to evolve, and central bank policy be it the Fed, European Central Bank, Bank of Japan, or otherwise will respond accordingly, regardless of political developments. Anticipating these cyclical progressions remains the focus of our strategy for investing in today s market backdrop. For a small open economy like Canada, the interaction of policy prescriptions leaves the domestic outlook tilted toward an unbalanced, but ongoing recovery, which remains subject to significant uncertainties. Accordingly, the Bank of Canada will want to see a long awaited reorientation in the drivers of economic activity becoming deeply rooted before pondering a shift away from the currently steady policy rate path. Effective January 3, 217, James Werry became a member of the Independent Review Committee of the Fund. 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, 217, for each of the classes are shown below: Annual management fee rate (%) Annual fixed administration fee rate (%) A Shares AT Shares AT8 Shares E Shares 1..1 EF Shares..1 EFT Shares..1 EFT8 Shares..1 ET Shares 1..1 ET8 Shares 1..1 F Shares I Shares Paid directly by investor - IT8 Shares Paid directly by investor - O Shares Paid directly by investor.1 OT Shares Paid directly by investor.1 OT8 Shares Paid directly by investor.1 The Manager received $.8 million in management fees and $.1 million in fixed administrative fees for the year. Management 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. 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.; 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 ); c) purchases or sales of other investment funds managed by the Manager or their affiliates; and d) mergers of funds with another fund that is subject to National Instrument 81-2 ( Fund Mergers ). 2

3 Management Report of Fund Performance for the year ended March 31, 217 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 IRC of any material breach of a condition of the standing instructions. The standing instructions require, among other things, that the investment decisions 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 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 Management Report of Fund Performance for the year ended March 31, 217 FINANCIAL HIGHLIGHTS The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the past five years, as applicable. Net Assets per Share ($) (1) (2) (8) * A Shares Commencement of operations August 28, 22 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Year Ended Year Ended Year Ended Year Ended Year Ended Yea Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ Mar (.3) (.29) (.26) (.2) (.24) (.2) (.3) (.27) (.2) (.3) (.) (.3) (.4) (.3) (.61) (.66) (.14) - - (.64) (.71) (.17) (.4) (.3) ,27 33,623 2,78 21,28 24,643 2,8 2,72 1,69 1,76 2, AT Shares Commencement of operations December 22, 211 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Per Year Ended Year Ended Year Ended Year Ended Year Ended Ince Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ Mar (.21) (.21) (.21) (.21) (.21) (.2) (.22) (.63) (.2) (.41) (.8) (.2) (.4) (.2) (.4) (.3) (.42) (.48) (.11) - - (.49) (.48) (.47) (.49) (.) (.93) (1.) (.6) (.3) (.3) , *Footnotes for the tables are found at the end of the Financial Highlights section. ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7. 4

5 Management Report of Fund Performance for the year ended March 31, 217 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Share ($) (1) (2) (8) * AT8 Shares Commencement of operations December 22, 211 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Per Year Ended Year Ended Year Ended Year Ended Year Ended Ince Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ Mar (.18) (.19) (.19) (.2) (.21) (.13) (.19) (.7).7.19 (.4) (.27) (.13) (.2) (.3) (.2) (.3) (.3) (.36) (.42) (.) - - (.69) (.7) (.7) (.74) (.79) (1.7) (1.1) (.82) (.77) (.82) E Shares Commencement of operations October 4, 211 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Peri Year Ended Year Ended Year Ended Year Ended Year Ended Ince Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ Mar (.18) (.16) (.1) (.14) (.14) (.22) (.39) (.33) (.44) (.3) (.) (.3) (.4) (.3) (.6) (.9) (.13) - - (.9) (.64) (.16) (.4) (.3) ,8 3,968 1, *Footnotes for the tables are found at the end of the Financial Highlights section. ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7.

6 Management Report of Fund Performance for the year ended March 31, 217 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Share ($) (1) (2) (8) * EF Shares Commencement of operations July 29, 21 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Period from Year Ended Inception to Mar. 31, 217 Mar. 31, 216 $ $ (.) (.) (.29).26 - (.91) (.) (.47) - - (.2) (.4) (.47) (.1) - - (.49) (.) ,63 4, EFT Shares Commencement of operations July 29, 21 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Period from Year Ended Inception to Mar. 31, 217 Mar. 31, 216 $ $ (.9) (.) (.26).2 (.6) (1.49) (.14) (1.13) - - (.2) (.4) (.44) (.49) (.) (.34) (.96) (.87) *Footnotes for the tables are found at the end of the Financial Highlights section. 6

7 Management Report of Fund Performance for the year ended March 31, 217 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Share ($) (1) (2) (8) * EFT8 Shares Commencement of operations July 29, 21 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Period from Year Ended Inception to Mar. 31, 217 Mar. 31, 216 $ $ (.9) (.) (.18).36 (.6).9 (.6) (.2) (.4) (.41) (.48) (.79) (.4) (1.22) (1.6) ET Shares Commencement of operations August 29, 212 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Period from Year Ended Year Ended Year Ended Year Ended Inception to Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ (.1) (.14) (.14) (.13) (.8) (.1) (.7) (.44) (.2) (.4) (.2) (.4) (.3) (.44) (.) (.11) - - (.1) (.) (.48) (.) (.34) (.97) (1.4) (.61) (.4) (.37) *Footnotes for the tables are found at the end of the Financial Highlights section. ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7. 7

8 Management Report of Fund Performance for the year ended March 31, 217 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Share ($) (1) (2) (8) * ET8 Shares Commencement of operations July 29, 21 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Period from Year Ended Inception to Mar. 31, 217 Mar. 31, 216 $ $ (.14) (.9) (.11).38 (.39).28 (.39) (.2) (.4) (.41) (.48) (.79) (.4) (1.22) (1.6) F Shares Commencement of operations August 28, 22 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Year Ended Year Ended Year Ended Year Ended Year Ended Yea Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ Mar (.21) (.19) (.17) (.16) (.16) (.29) (.4) (1.49) (.49) (.6) (.3) (.6) (.3) (.) (.3) (.66) (.72) (.1) - - (.69) (.78) (.18) (.) (.3) ,7 9,46 2,96 1,682 1, *Footnotes for the tables are found at the end of the Financial Highlights section. ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7. 8

9 Management Report of Fund Performance for the year ended March 31, 217 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Share ($) (1) (2) (8) * I Shares Commencement of operations December 19, 28 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Year Ended Year Ended Year Ended Year Ended Year Ended Yea Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ Mar (.3) (.1) (.21) (.23) (.) (.3) (.6) (.3) (.) (.3) (.69) (.73) (.1) - - (.72) (.79) (.18) (.) (.3) ,218 7,6 3,881 2,48 2, IT8 Shares Commencement of operations February 17, 212 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Per Year Ended Year Ended Year Ended Year Ended Year Ended Ince Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ Mar (.1) (.24) (.4) (.14).86 (.8) (.2) (.4) (.2) (.4) (.2) (.3) (.3) (.4) (.46) (.) - - (.7) (.74) (.72) (.76) (.8) (1.17) (1.24) (.84) (.79) (.83) *Footnotes for the tables are found at the end of the Financial Highlights section. ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7. 9

10 Management Report of Fund Performance for the year ended March 31, 217 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Share ($) (1) (2) (8) * O Shares Commencement of operations October 4, 211 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Peri Year Ended Year Ended Year Ended Year Ended Year Ended Ince Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ Mar (.4) (.2) (.2) (.2) (.2) (.19) (.2) (.21) (.11) (.3) (.) (.3) (.4) (.3) (.9) (.63) (.13) - - (.62) (.68) (.16) (.4) (.3) ,1 12,1 4,93 1, , OT Shares Commencement of operations August 29, 212 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Period from Year Ended Year Ended Year Ended Year Ended Inception to Mar. 31, 217 Mar. 31, 216 Mar. 31, 21 Mar. 31, 214 Mar. 31, 213^ (.3) (.2) (.2) (.2) (.1) (.19) (.14) (.11) (.6) (.2) (.4) (.3) (.4) (.3) (.47) (.2) (.12) - - (.4) (.1) (.49) (.) (.34) (1.3) (1.7) (.64) (.4) (.37) ,442 1,611 2, *Footnotes for the tables are found at the end of the Financial Highlights section. ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7.

11 Management Report of Fund Performance for the year ended March 31, 217 FINANCIAL HIGHLIGHTS (cont d) Net Assets per Share ($) (1) (2) (8) OT8 Shares Commencement of operations July 29, 21 Total net assets ($ s) (8) Number of shares outstanding ( s) (8) Portfolio turnover rate (%) () Period from Year Ended Inception to Mar. 31, 217 Mar. 31, 216 $ $ (.3) (.1) (2.36). (1.99) - - (.2) (.4) (.42) (.48) (.79) (.4) (1.23) (1.6) (1) This information is derived from the Fund s audited annual financial statements. (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) in net assets from operations per share is based on the weighted average number of shares outstanding for the relevant class over the fiscal year. (3) Dividends are automatically reinvested in additional shares of the Fund. (4) 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 assets for the year. The Effective HST tax rate is calculated using the attribution percentage for each province based on shareholder residency and can be different from 13%. () The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of % 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 monthly fair value of investments during the year. (6) The trading expense ratio represents total commissions and other portfolio transaction costs disclosed in the statements of comprehensive income expressed as an annualized percentage of daily average net assets of the Fund during the year. (7) For financial years beginning on or after April 1, 213 the financial highlights are derived from the financial statements prepared in accordance with International Financial Reporting Standards (IFRS). IFRS allows net assets to be calculated based on the last traded market price for financial assets and financial liabilities where the last traded price falls within the day s bid-ask spread. There are no differences between the net assets calculated for purpose of processing shareholders transactions and the net assets attributable to holders of redeemable shares used for financial statement reporting purposes. For financial years before April 1, 213, the financial highlights are derived from the financial statements prepared in accordance with Canadian GAAP. Under Canadian GAAP net assets for financial statement purposes were calculated based on bid/ask price while for purpose of processing shareholder transactions net assets were calculated based on the closing market price. (8) This information is provided as at March 31 of the years shown. 11

12 Management Report of Fund Performance for the year ended March 31, 217 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 dividends 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. A Shares AT Shares AT8 Shares E Shares Mar. 28 Mar. 29 Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar Mar. 21 Mar. 216 Mar. 29 Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar. 214 Mar. 21 Mar. 216 Mar. 212 Mar. 213 Mar. 214 Mar. 21 Mar. 216 Mar. 28 Mar. 29 Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar. 214 Mar. 21 Mar. 216 Mar. 212 Mar. 213 Mar. 214 Mar. 21 Mar. 212 Mar. 213 Mar. 214 Mar Mar. 212 Mar. 213 Mar. 214 Mar ET Shares Mar Mar. 217 Mar Mar. 214 Mar. 21 Mar. 216 Mar. 217 Mar. 216 Mar. 217 Mar. 216 Mar. 217 Mar. 216 Mar. 217 EF Shares EFT Shares EFT8 Shares Mar Mar. 217 ET8 Shares F Shares I Shares IT8 Shares Mar Mar. 217 Mar. 217 Mar Mar. 217 Mar Mar Mar

13 Management Report of Fund Performance for the year ended March 31, 217 O Shares OT Shares T8 Shares Mar. 212 Mar. 213 Mar. 214 Mar. 21 Mar. 216 Mar. 213 Mar Mar. 21 Mar Mar. 217 Mar Mar. 217 Mar This figure is for the period from December 19, 28 to March 31, This figure is for the period from October 4, 211 to March 31, This figure is for the period from December 22, 211 to March 31, This figure is for the period from February 17, 212 to March 31, 212. This figure is for the period from August 29, 212 to March 31, This figure is for the period from July 29, 21 to March 31,

14 Management Report of Fund Performance for the year ended March 31, 217 Annual Compound Returns The following table shows the Fund s annual compound returns for each year indicated, compared to the J.P. Morgan Global Government Bond Total Return Index. The J.P. Morgan Global Government Bond Total Return Index is an unmanaged index which tracks the performance of actively-traded issues of government bonds worldwide. The Index excludes floating rate notes, perpetuals, bonds targeted at the domestic market for tax purposes and bonds with less than one year remaining to maturity. A discussion of the performance of the Fund as compared to the benchmark is found in the Results of Operations section of this report. One Year (%) Three Years (%) Five Years (%) Ten Years (%) Since Inception (%) A Shares (2.6) n/a J.P. Morgan Global Government Bond Total Return Index (.7) n/a AT Shares (2.8) n/a 3.6 J.P. Morgan Global Government Bond Total Return Index (.7) n/a 7.4 AT8 Shares (2.8) n/a 3.6 J.P. Morgan Global Government Bond Total Return Index (.7) n/a 7.4 E Shares (1.9) n/a 4.3 J.P. Morgan Global Government Bond Total Return Index (.7) n/a 6.6 EF Shares (1.3) n/a n/a n/a 2.8 J.P. Morgan Global Government Bond Total Return Index (.7) n/a n/a n/a 7.9 EFT Shares (1.) n/a n/a n/a 2.7 J.P. Morgan Global Government Bond Total Return Index (.7) n/a n/a n/a 7.9 EFT8 Shares (1.4) n/a n/a n/a 2.6 J.P. Morgan Global Government Bond Total Return Index (.7) n/a n/a n/a 7.9 ET Shares (2.).1 n/a n/a.1 J.P. Morgan Global Government Bond Total Return Index (.7) 8.6 n/a n/a 7.6 ET8 Shares (2.1) n/a n/a n/a 2.1 J.P. Morgan Global Government Bond Total Return Index (.7) n/a n/a n/a 7.9 F Shares (1.9) n/a J.P. Morgan Global Government Bond Total Return Index (.7) n/a I Shares (.6) n/a.3 J.P. Morgan Global Government Bond Total Return Index (.7) n/a 3.7 IT8 Shares (.7) n/a.4 J.P. Morgan Global Government Bond Total Return Index (.7) n/a 7.4 O Shares (.8) n/a.4 J.P. Morgan Global Government Bond Total Return Index (.7) n/a 6.6 OT Shares (.8) 6.4 n/a n/a 6.3 J.P. Morgan Global Government Bond Total Return Index (.7) 8.6 n/a n/a 7.6 OT8 Shares (.9) n/a n/a n/a 3.3 J.P. Morgan Global Government Bond Total Return Index (.7) n/a n/a n/a

15 Management Report of Fund Performance for the year ended March 31, 217 Summary of Investment Portfolio as at March 31, 217 Portfolio Breakdown* Percentage of Portfolio Breakdown (cont d)* Percentage of Top 2 Holdings* Percentage of Category Net Assets (%) Category Net Assets (%) Security Name Net Assets (%) Country allocation U.S.A Canada Japan U.K Spain Italy France Mexico Indonesia Turkey Argentina Colombia....7 Brazil....7 Russia.... Other Net Assets (Liabilities)....4 Netherlands....4 Philippines....3 Peru....3 South Africa....3 Jersey Island....3 Panama....3 Belgium....3 Hungary....2 Cash & Equivalents....1 Chile.... Sector allocation Foreign Government Bonds Provincial Bonds Asset-Backed Securities Corporate Bonds....8 Other Net Assets (Liabilities)....4 Financials....2 Cash & Equivalents....1 Canadian Government Bonds.... Private Placements.... Materials.... United States Treasury Note/Bond 1.7% 11/3/ Government of Japan, Two Year Bond.1% 3/1/ Province of Ontario 2.4% 6/2/ Province of Quebec 2.% 9/1/ United States Treasury Inflation Indexed Bonds.128% 4/1/ Province of Ontario 1.3% 3/8/ Province of Quebec 3.% 12/1/ United States Treasury Inflation Indexed Bonds.12661% 7/1/ Spain Government Bond 1.4% 1/31/ Spain Government Bond.2% 1/31/ France Government Bond OAT, Zero Coupon 2/2/ Province of Ontario 2.8% 6/2/ Province of Quebec 3% 9/1/ United States Treasury Note/Bond 2.2% 2/1/ United States Treasury Note/Bond.7% 2/28/ Government of Japan, Two Year Bond.1% 1/1/ United States Treasury Note/Bond 3% 2/1/ Spain Government Bond 1.1% 7/3/ Province of Ontario 3.% 6/2/ Province of Quebec 3.7% 9/1/ United States Treasury Note/Bond 1.62% /31/ United Kingdom, Treasury Gilt 1.% 7/22/ United Kingdom, Treasury Gilt 1.2% 7/22/ United Kingdom, Treasury Gilt 2% 9/7/ United Kingdom, Treasury Gilt 3.% 7/22/ Total Net Assets (in $ s) $63,294 *These are holdings and the breakdown of the underlying fund. 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. 1