Redefining Active Management Yoonjai Shin, CFA Director, CI Investment Consulting

2 CI Investment Consulting team Redefining active management Market outlook Agenda

3 Yoonjai Shin, CFA Director Fund/manager analysis Asset allocations Currency strategy Fund selection Project management Andrew Ashworth Analyst Fund/manager analysis Cash flow management Performance reporting Lewis Harkes, CFA Senior Analyst Fund/manager analysis Performance reporting Alfred Lam, CFA VP & Portfolio Manager Investment strategy / Asset allocations Fund selection/ Currency strategy Communications Marchello Holditch Senior Analyst Fund/manager analysis CI Investment Consulting Team

4 What do we manage? $20 billion in assets under management

5 Best Fund of Funds Award Best Fund of Funds Award Best Global Fixed Income Balanced Award Best Global Fixed Income Balanced Award Industry recognition

6 Bond return expectation is very low Equity returns are more attractive but have high volatility Investors can either take more risks or demand from their portfolio manager to work harder The new normal

7 Redefining Active Management Total return = Asset mix + Alpha + Market Beta + Currency – Tax – Fees Optimize MaximizeManage Manage/ Reduce Minimize Reduce

8 Access to managers under one roof

9 Expected Return % Volatility 100i 40i60e 100e PE expansion.... For illustration purposes only; there is no guarantee on results. Gov’t Bonds GIC Solution for every investor

10 Strong performance 2013* PSS 40i60e PS Balanced Quotential Balanced Growth Portfolio Fidelity Balanced Portfolio Dynamic Edge Balanced Portfolio AGF Elements Balanced Portfolio % DEX, 60% TSX *May 31, 2013

11 Why are we out-performing? Superior income allocation Overweight US equity Currency hedges did not cost us even though CAD has depreciated in general Strong performance from Cambridge and QV (PSS only)

12 Source: TD Securities Overweight US Outlook: US vs. Canada

13 Source: CIBC GDP growth forecast US 2.0% 3.2% Canada 1.6% 2.4% Outlook: US vs. Canada

14 Source: Rudebusch (FRBSF Economic Letter, 2010), Haver Analytics, Federal Reserve, CIBC Outlook: continued monetary easing

15 Government of Canada benchmark bond yields - 10 year GRAPH PERIOD: 28 May May 2013 Source: Bank of Canada Volatility in bond markets leading to tactical opportunities Outlook: volatile bond markets

16 Canadian dollar is 17% overvalued based on Purchasing Power Parity Source: Bloomberg Outlook: Canadian dollar