Cambridge Advisors October 2012

Brandon Snow Principal & Portfolio Manager Alan Radlo Chief Investment Officer & Portfolio Manager Robert Swanson Principal & Portfolio Manager Emi Winterer Analyst Stephen Groff Analyst Greg Dean Analyst The Cambridge team

The Cambridge advantage 70 years of combined management experience 12 esteemed investment management awards for consistent outperformance Flexibility and capacity to pursue alpha with no incentive to resemble the index Proven process for long-term holdings and short- term investments Downside protection A focus on absolute return resulting in outperformance

A variety of actively managed portfolios Diversified income Cambridge Income Fund/Cambridge Income Corporate Class Canadian equity Cambridge Canadian Equity Corporate Class Cambridge Canadian Growth Companies Fund Cambridge Pure Canadian Equity Fund Global equity Cambridge American Equity Fund/Cambridge American Corporate Class Cambridge Global Equity Corporate Class Balanced/asset allocation Cambridge Canadian Asset Allocation Corporate Class

Back to Basics Bob Swanson, Principal & Portfolio Manager October 2012

US Budget Crisis US Double Dip Recession European Debt Crisis Middle East Uprising CNBC Talking Heads High Frequency Trading JPM, Knight huge trading losses No shortage of negative headlines

U.S. and Canadian interest rates are at record lows Canada 10-year Treasury yield Source: Factset

High-yield bond prices have risen dramatically ’93’94’95’96’97’98’99’00’01’02’03’04’05’06’07’08’09’10’11‘ Barclay’s Global High Yield Index Source: Factset

Bonds are expensive in the U.S ’98’99’00’01’02’03’04’05’06’07’08’09’10’11‘12 Source: Factset Barclay’s U.S. Aggregate Credit (5 – 10 year)

And in Canada ’00’01’02’03’04’05’06’07’08’09’10’11‘12 Bank of America Merrill Lynch Canadian Broad Market Source: Factset

Moment of truth How many of you are still recommending bonds to your clients? How many of you have stopped your clients from reinvesting into bond funds?

Record inflows into income funds 1,400,000 1,200, , , , ,000 1,000,000 0 ’03’04’05’06’07’08’09’10’11‘12 Source: Factset

Equity outflows 700, , , , , , ,000 0 ’03’04’05’06’07’08’09’10’11‘ ,000 Source: Factset

U.S. corporate profits at all-time highs 2,200 2,000 1,600 1,400 1,200 1,000 1, ’03’04’05’06’07’08’09’10’11‘ Source: Factset

S&P500 dividends per share ’99’00’01’02‘03’04’05’06’07’08’09’10’11‘12 Source: Factset

Valuations remain below average Source: Factset

Price to earnings: 11x in 2011; 13x in 2012 Source: Factset

Equity performance Source: Factset, September 2012

Earnings yields vs. bond yields Source: Factset

S&P/TSX dividend yield vs. bonds Source: Factset

Dividend yields: aristocrats vs. S&P/TSX 60 Source: Factset

S&P/TSX and aristocrats Source: Factset

The benefits of dividend growth Source: Factset

Growth of a dividend: Chevron Source: Factset

Bonds are guaranteeing capital losses for clients Company Dividend Yield Current Yield Price Loss at Maturity YTM Altria Group5.3%4.8% %1.8% Chevron Texaco3.2%4.0% %1.5% Pfizer3.5%3.9% %1.1% General Electric3.1%4.4% %1.5% Cdn Nat’l Rail1.7%4.8% %1.4% Bond Metrics* Source: Bloomberg, bonds maturing in 4-6 years

Canadian debt issuance Source: Factset

Who is buying stocks? The companies! Source: Factset

Dun & Bradstreet announced a $1 billion buyback over two years funded by cash flow and cheap debt. This represented nearly 30% of the market cap at the time of announcement. (8/9/12) Transforce announced an increase in its credit facility to $800 million and a buyback of nearly 10% of shares. (7/27/12) IBM issued a 10-year bond to yield 1.875%, and the company is buying back 5% of the company’s shares each year. (7/25/12) Who is buying stocks? The companies! Source: Ned Davis Research Inc.

Who is buying stocks? Cambridge Income Fund Cambridge Canadian Asset Allocation Corporate Class Cambridge Canadian Equity Corporate Class Cambridge American Equity Fund Cambridge Global Equity Corporate Class

Cambridge Income Fund Combination of global fixed income and high-yielding equities Diversified across regions, sectors and capital structure Focus on income stability, with potential for capital appreciation and inflation protection

Representative portfolio structure Investment grade4.0% Converts6.0% High-yield bonds6.5% REITS5.0% Preferred6.5% High-yield equity4.5% Infrastructure4.5% Utilities5.0% Yields

Source:CI Trade Support, Factset (50%S&P/TSX Total Return / 50%BofA Cad A-AAA Total Return) Outperformance with two-thirds the volatility of the benchmark

FundFund Code Assets (million) Foreign Content Cambridge Canadian Equity Corporate ClassCIG2321$1.308maximum 49% Cambridge Canadian Asset Allocation Corporate ClassCIG2322$894.0maximum 49% Cambridge Global Equity Corporate ClassCIG2323$695.7no restrictions Cambridge Income Corporate ClassCIG2261$353.4no restrictions Cambridge Income FundCIG635$96.8no restrictions Cambridge American Equity Corporate Class*CIG294$391.4no restrictions Cambridge American Equity Fund* CIG212$55.4no restrictions Cambridge Canadian Growth Companies Fund†CIG11108$47.5maximum 49% Cambridge Pure Canadian Equity Fund†CIG11109$3.8maximum 10% *Effective June 5, 2011 funds were renamed from CI American Equity Corporate Class and CI American Equity Fund. † Effective July 27, 2012 funds were renamed from Castlerock Canadian Growth Companies and Castlerock Pure Canadian Equity Fund Source: RBC Dexia at September 30, 2012 Cambridge offers a variety of mandates

Thank You All charts and illustrations in this guide are for illustrative purposes only. They are not intended to predict or project investment results. ®CI Investments, CI Investments design and Cambridge are registered trademarks of CI Investments Inc. Cambridge Advisors is the business name of CI Global Holdings Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise indicated and except for returns for periods less than one year, the indicated rates of return are the historical annual compounded total returns including changes in security value. All performance data assume reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.