Signature Diversified Yield II 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 Signature Diversified Yield II Fund (the Fund ) is to generate a high level of income through exposure to a portfolio of fixed income and high yielding equity securities throughout the world. The portfolio advisor invests in companies throughout the world that have the potential for growth and value in their industry and then considers the impact of economic trends. The portfolio advisor to the Fund will actively manage the equity, fixed-income, and cash components of the Fund. Equity investments may include common shares, preferred shares and real estate investment trusts (REITs), royalty trusts, and similar high yielding investments. Fixed income securities may include government fixed income securities, bank loans, convertible bonds, floating rate debt instruments, investment grade corporate bonds, and corporate bonds that have a below-investment-grade credit rating. Up to 50% of the Fund s assets may be invested in corporate debt rated below BBB. The portfolio advisor may use techniques such as underlying fundamental analysis to assess growth and value potential. This means evaluating the financial condition and management of each company, its industry, and the overall economy. The Fund may use derivatives, but only as permitted by securities regulations. In order to earn additional income, the Fund also may enter into securities lending transactions, repurchase transactions and reverse repurchase transactions to the extent permitted by securities regulations. 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 receive income and seek potential for modest capital appreciation, are investing for the medium and/or long term, and can tolerate low to medium risk. 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. What a difference two months can make. After a Goldilocks economy in 2017 that suspiciously went vertical to the upside in January 2018, the stock markets came crashing down in the last two months of the period under review. This should not obscure from the solid performance in the past 12 months, but it does raise some questions. While a correction was due, it came aggressively and at a time of continued strong financial conditions, a globally synchronized economic recovery and the positive effect of a U.S. tax cut and fiscal stimulus. The Fund underperformed its benchmark during the period. The Fund uses a tactical hedge ratio, meaning that a portion of the assets held in U.S. securities are exposed to currency fluctuations. Currency detracted from performance over the period. Also detracting from performance was security selection in the real estate and other equity income categories and an overweight in midstream/pipeline companies within the infrastructure equity sleeve. An individual detractor was Colony NorthStar Inc. We took a positive view last year after the company acquired Northstar in late 2016; however, it turned out the assets it acquired were struggling more than anticipated. To preserve capital, Northstar cut its dividend in the first quarter of this year, resulting in a drop in the stock price that detracted from Fund performance. We exited the position. One of the real estate names we added is Prologis Inc. Whereas most property fundamentals are slowing with supply increasing some markets and demand waning in others, industrial property seems to continue to be supported by structural tailwinds. Prologis is transitioning from being a provider of industrial space to a key piece of infrastructure in the logistics chain. The stock features strong growth potential and the returns on the underlying asset class look good relative to other property types. RESULTS OF OPERATIONS The net asset value of the Fund decreased by $814.4 million to $2,782.1 million from March 31, 2017 to March 31, The Fund had net redemptions of $545.2 million during the year. The portfolio s performance decreased assets by $56.9 million. The Fund paid distributions totalling $212.3 million. Class A units returned -2.8% after fees and expenses for the one-year period ended March 31, Over the same time period, the Fund s benchmark returned 0.0%. The benchmark is a combination of the Bank of America Merrill Lynch U.S. High Yield Total Return Index - 40%, the MSCI ACWI Global High Dividend Yield Total Return Index - 20%, the MSCI ACWI Infrastructure Total Return Index - 20% and the MSCI World Real Estate Total Return Index - 20%. We added a new position in Boyne Resorts 7.25% bonds due Boyne is the owner and operator of ski resorts in Canada and the U.S., including Cypress Mountain just outside of Vancouver. Our previous experience in the term loan of Intrawest and the equity of Whistler-Blackcomb and Vail gave us additional confidence in the cash flow characteristics and asset value of the business model. RECENT DEVELOPMENTS Although valuations for many of the Fund s income asset classes declined to levels seen in 2016, risk levels have improved since then. In the first quarter of 2016, the U.S. Federal Reserve (Fed) had just begun to increase interest rates, despite weak commodity CIG

2 prices and softening global growth. In the most recent quarter, the Fed s intentions to raise rates are priced into valuations and bond market fears are abating after volatility in January. Many investors may turn back to these income asset classes again after the recent decline in technology and growth stocks, much like the early 2000s. Valuations are starting to look more attractive, especially when we take a longer-term view based on how low interest rates could fall in the next downturn. Effective November 3, 2017, the Fund acquired all assets of Marret Strategic Yield Fund. Effective April 3, 2018, 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. Management fee and fixed administration rates as at March 31, 2018, for each of the classes are shown below: 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. 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, 2018 the Fund executed inter-fund trades. 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. Annual management fee rate (%) Annual fixed administration fee rate (%) Class A Class A Class A Class A Class A Class A Class E Class EF Class F Class F 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. Class F Class F Class F Class I Paid directly by investor - Class O Paid directly by investor 0.15 Class P Paid directly by investor 0.20 The Manager received $46.6 million in management fees and $5.4 million in fixed administration fees for the year.

3 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 gains (losses) for gains (losses) for (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) gains Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class A Commencement of operations February 14, 2011 Mar. 31, (0.23) 0.25 (0.68) (0.18) (0.23) (0.02) (0.32) (0.06) (0.63) 9.20 Mar. 31, (0.23) (0.26) - - (0.39) (0.65) Mar. 31, (0.24) (0.32) (0.79) (0.84) (0.26) (0.01) - (0.33) (0.60) 9.72 Mar. 31, (0.25) (0.26) - - (0.39) (0.65) Mar. 31, (0.24) (0.30) (0.31) (0.01) - (0.28) (0.60) Class A1 Mar. 31, (0.19) (0.03) (0.83) (0.60) (0.22) (0.02) (0.29) (0.06) (0.59) 8.99 Class A2 Mar. 31, (0.19) (0.01) (0.89) (0.64) (0.22) (0.02) (0.29) (0.06) (0.59) 8.99 Class A3 Mar. 31, (0.18) 0.05 (0.87) (0.56) (0.22) (0.02) (0.30) (0.06) (0.60) 8.99 Class A4 Mar. 31, (0.17) 0.06 (1.02) (0.69) (0.22) (0.02) (0.31) (0.06) (0.61) 8.98 Class A5 Mar. 31, (0.16) (0.18) (0.79) (0.68) (0.23) (0.02) (0.31) (0.06) (0.62) 8.99 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

4 FINANCIAL HIGHLIGHTS (cont d) 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 gains (losses) for gains (losses) for (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) gains Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class E Commencement of operations August 29, 2012 Mar. 31, (0.22) 0.20 (0.75) (0.26) (0.25) (0.02) (0.31) (0.06) (0.64) 9.50 Mar. 31, (0.23) (0.28) - - (0.38) (0.66) Mar. 31, (0.23) (0.39) (0.72) (0.80) (0.28) (0.01) - (0.32) (0.61) Mar. 31, (0.24) (0.28) - - (0.38) (0.66) Mar. 31, (0.24) (0.33) (0.32) (0.01) - (0.28) (0.61) Class EF Commencement of operations December 5, 2014 Mar. 31, (0.10) 0.24 (0.70) (0.11) (0.31) (0.03) (0.29) (0.06) (0.69) 8.62 Mar. 31, (0.10) (0.35) - - (0.35) (0.70) 9.40 Mar. 31, (0.11) (0.40) (0.62) (0.65) (0.34) (0.02) - (0.30) (0.66) 9.08 Mar. 31, (0.04) (0.17) (0.08) - - (0.19) (0.27) Class F Commencement of operations February 14, 2011 Mar. 31, (0.12) 0.24 (0.71) (0.12) (0.32) (0.03) (0.34) (0.07) (0.76) 9.12 Mar. 31, (0.12) (0.36) - - (0.40) (0.76) 9.99 Mar. 31, (0.13) (0.35) (0.74) (0.72) (0.36) (0.02) - (0.35) (0.73) 9.67 Mar. 31, (0.13) (0.37) - - (0.40) (0.77) Mar. 31, (0.13) (0.33) (0.39) (0.01) - (0.32) (0.72) Class F1 Mar. 31, (0.10) (0.13) (0.79) (0.57) (0.26) (0.03) (0.33) (0.06) (0.68) 9.00 Class F2 Mar. 31, (0.09) (0.07) (0.88) (0.59) (0.26) (0.03) (0.34) (0.07) (0.70) 8.99 Class F3 Mar. 31, (0.10) (0.02) (0.76) (0.44) (0.26) (0.03) (0.33) (0.07) (0.69) 8.99 *Footnotes for the tables are found at the end of the Net Assets per Unit section of the Financial Highlights.

5 FINANCIAL HIGHLIGHTS (cont d) 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 gains (losses) for gains (losses) for (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) gains Return of capital distributions shown (2) $ $ $ $ $ $ $ $ $ $ $ $ Class F4 Mar. 31, (0.08) - (1.03) (0.66) (0.26) (0.03) (0.34) (0.07) (0.70) 8.99 Class I Commencement of operations February 14, 2011 Mar. 31, (0.76) 0.09 (0.48) (0.05) (0.29) (0.06) (0.88) Mar. 31, (0.55) - - (0.34) (0.89) Mar. 31, (0.33) (0.86) (0.62) (0.52) (0.03) - (0.29) (0.84) Mar. 31, (0.53) - - (0.35) (0.88) Mar. 31, (0.17) (0.50) (0.02) - (0.33) (0.85) Class O Commencement of operations August 29, 2012 Mar. 31, (0.02) 0.19 (0.79) (0.12) (0.43) (0.04) (0.32) (0.06) (0.85) 9.54 Mar. 31, (0.02) (0.49) - - (0.37) (0.86) Mar. 31, (0.02) (0.42) (0.69) (0.61) (0.47) (0.02) - (0.32) (0.81) Mar. 31, (0.02) (0.48) - - (0.38) (0.86) Mar. 31, (0.02) (0.40) (0.47) (0.02) - (0.33) (0.82) Class P Mar. 31, (0.02) - (0.99) (0.56) (0.29) (0.03) (0.36) (0.07) (0.75) 9.00 (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.

6 FINANCIAL HIGHLIGHTS (cont d) Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) Management expense ratio before taxes (2) Management expense ratio after taxes (2) Effective HST rate for the year (2) Harmonized Trading Portfolio sales tax (2) expense ratio (3) turnover rate (4) $000 s 000 s % % % % % % Class A Commencement of operations February 14, 2011 Mar. 31, ,464, , Mar. 31, ,290, , Mar. 31, ,347, , Mar. 31, ,450, , Mar. 31, ,191 93, Class A1 Mar. 31, ,608 26, Class A2 Mar. 31, ,977 7, Class A3 Mar. 31, ,913 3, Class A4 Mar. 31, , Class A5 Mar. 31, , *Footnotes for the tables are found at the end of the Financial Highlights section.

7 FINANCIAL HIGHLIGHTS (cont d) Ratios and Supplemental Data (1) (5) * Total net assets (5) Number of units outstanding (5) Management expense ratio before taxes (2) Harmonized sales tax (2) Management expense ratio after taxes (2) Effective HST rate for the year (2) Trading expense ratio (3) Portfolio turnover rate (4) $000 s 000 s % % % % % % Class E Commencement of operations August 29, 2012 Mar. 31, ,438 23, Mar. 31, ,300 20, Mar. 31, ,170 12, Mar. 31, ,962 7, Mar. 31, ,749 3, Class EF Commencement of operations December 5, 2014 Mar. 31, ,654 4, Mar. 31, ,634 4, Mar. 31, ,408 2, Mar. 31, , Class F Commencement of operations February 14, 2011 Mar. 31, ,622 17, Mar. 31, ,370 21, Mar. 31, ,695 13, Mar. 31, ,363 10, Mar. 31, ,099 5, Class F1 Mar. 31, ,658 2, Class F2 Mar. 31, , Class F3 Mar. 31, , *Footnotes for the tables are found at the end of the Financial Highlights section.

8 FINANCIAL HIGHLIGHTS (cont d) Ratios and Supplemental Data (1) (5) Total net assets (5) Number of units outstanding (5) Management expense ratio before taxes (2) Harmonized sales tax (2) Management expense ratio after taxes (2) Effective HST rate for the year (2) Trading expense ratio (3) Portfolio turnover rate (4) $000 s 000 s % % % % % % Class F4 Mar. 31, Class I Commencement of operations February 14, 2011 Mar. 31, ,196 30, Mar. 31, ,147 59, Mar. 31, ,169 54, Mar. 31, ,562 66, Mar. 31, ,364 49, Class O Commencement of operations August 29, 2012 Mar. 31, ,364 20, Mar. 31, ,433 15, Mar. 31, ,749 9, Mar. 31, ,641 4, Mar. 31, ,258 2, Class P Mar. 31, , (1) This information is derived from the Fund s audited annual financial statements. (2) 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, 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 expense ratio 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 100% 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. (5) This information is provided for the years ended March 31.

9 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 E Class EF Class F Dec Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Dec Mar Mar Mar Mar Mar Mar Class I 40 Class O Dec Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar return is for the period from February 14, 2011 to December 31, return is for the period from January 1, 2012 to March 31, return is for the period from August 29, 2012 to March 31, return is for the period from December 5, 2014 to March 31, 2015.

10 Annual Compound Returns The following table shows the Fund s annual compound returns for each year indicated, compared to the Blended Index composed of: (40% - Bank of America Merrill Lynch U.S. High Yield Total Return Index, 20% - MSCI ACWI Global High Dividend Yield Total Return Index, 20% - MSCI ACWI Infrastructure Total Return Index and 20% - MSCI World Real Estate Total Return Index); the Bank of America Merrill Lynch U.S. High Yield Total Return Index, the MSCI ACWI Global High Dividend Yield Total Return Index, the MSCI ACWI Infrastructure Total Return Index and the MSCI World Real Estate Total Return Index. The Bank of America Merrill Lynch U.S. High Yield Total Return Index is an unmanaged index that tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. The MSCI ACWI Global High Dividend Yield Total Return Index is a float-adjusted market capitalization weighted index based on MSCI ACWI Index. The Index is designed to reflect the performance of equities in the parent index with higher dividend income and quality characteristics than average dividend yields that are both sustainable and persistent. The MSCI ACWI Infrastructure Total Return Index is a free float-adjusted market capitalization weighted index that captures the global opportunity set of companies that are owners or operators of infrastructure assets. Constituents are selected from the equity universe of MSCI ACWI Index. All Index constituents are categorized in one of thirteen sub-industries according to the Global Industry Classification Standard, which MSCI groups into five infrastructure sectors: Telecommunications, Utilities, Energy, Transportation and Social. The MSCI World Real Estate Total Return Index is a free float-adjusted market capitalization index that consists of large and mid cap equity REITs across 23 developed markets including: 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, which generate a majority of their revenue and income from real estate rental and leasing operations. With 100 constituents, it represents about 85% of the REIT universe in each country and all securities are classified in the REIT sector according to the Global Industry Classification Standard. 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 (2.8) (0.5) 3.7 n/a 4.9 Blended Index n/a* n/a n/a* Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a 6.2 MSCI ACWI Global High Dividend Yield Total Return Index n/a* n/a n/a* MSCI ACWI Infrastructure Total Return Index (4.4) (0.2) 8.1 n/a 6.2 MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a 9.9 Class E (2.6) (0.3) 3.9 n/a 5.1 Blended Index n/a* n/a n/a* Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a 5.9 MSCI ACWI Global High Dividend Yield Total Return Index n/a* n/a n/a* MSCI ACWI Infrastructure Total Return Index (4.4) (0.2) 8.1 n/a 8.8 MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a 9.3 Class EF (1.5) 0.8 n/a n/a 2.6 Blended Index n/a n/a n/a* Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a n/a 5.0 MSCI ACWI Global High Dividend Yield Total Return Index n/a n/a n/a* MSCI ACWI Infrastructure Total Return Index (4.4) (0.2) n/a n/a 1.8 MSCI World Real Estate Total Return Index (6.9) (1.6) n/a n/a 2.8 Class F (1.7) n/a 6.0 Blended Index n/a* n/a n/a* Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a 6.2 MSCI ACWI Global High Dividend Yield Total Return Index n/a* n/a n/a* MSCI ACWI Infrastructure Total Return Index (4.4) (0.2) 8.1 n/a 6.2 MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a 9.9 Class I (0.4) n/a 8.4 Blended Index n/a* n/a n/a* Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a 6.9 MSCI ACWI Global High Dividend Yield Total Return Index n/a* n/a n/a* MSCI ACWI Infrastructure Total Return Index (4.4) (0.2) 8.1 n/a 7.6 MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a 9.9

11 One Year (%) Three Years (%) Five Years (%) Ten Years (%) Since Inception (%) Class O (0.6) n/a 7.3 Blended Index n/a* n/a n/a* Bank of America Merrill Lynch U.S. High Yield Total Return Index n/a 5.9 MSCI ACWI Global High Dividend Yield Total Return Index n/a* n/a n/a* MSCI ACWI Infrastructure Total Return Index (4.4) (0.2) 8.1 n/a 8.8 MSCI World Real Estate Total Return Index (6.9) (1.6) 6.9 n/a 9.3 *MSCI ACWI Global High Dividend Total Return Index data available only since December 31,

12 SUMMARY OF INVESTMENT PORTFOLIO as at March 31, 2018 Category % of Net Assets Category % of Net Assets Top 25 Holdings % of Net Assets Country allocation U.S.A Canada Australia U.K Other Net Assets (Liabilities) Spain Switzerland France Cash & Equivalents Sweden Bermuda Exchange-Traded Fund(s) Luxembourg Fund(s) Cayman Islands Netherlands Thailand Jersey Island Belgium British Virgin Islands Italy Hong Kong Marshall Islands Mexico Bahamas Germany Ireland St. Lucia Brazil Foreign Currency Forward Contracts... (0.8) Sector allocation Corporate Bonds Energy Real Estate Industrials Financials Consumer Staples Other Net Assets (Liabilities) Consumer Discretionary Utilities Cash & Equivalents Exchange-Traded Fund(s) Fund(s) Telecommunication Services Private Placements Preferred Shares Materials Warrants Foreign Currency Forward Contracts... (0.8) Wells Fargo & Co MacQuarie Atlas Roads Group The Williams Co., Inc Pembina Pipeline Corp Brookfield Asset Management Inc., Class A Cheniere Energy Inc Ferrovial S.A Cash & Equivalents Sydney Airport Royal Dutch Shell PLC American Homes 4 Rent Transurban Group Forest City Realty Trust Inc First Asset Global Financial Sector ETF Gecina S.A Six Flags Entertainment Corp Kennedy-Wilson Holdings Inc Aena S.A Alexandria Real Estate Equities Inc British American Tobacco PLC Signature Real Estate Pool (Class I) Enbridge Inc Brookfield Office Properties Inc. (USD) Nestle S.A., Registered Shares Pattern Energy Group Inc Total Net Assets (in $000 s) $2,782,061 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.