Investment update from CI Investment Consulting Alfred Lam, MBA, CFA VP and Portfolio Manager CI Investment Consulting

2 Agenda Industry trends, CI’s Multi-Manager Excellence Advantages of CI’s Managed Solutions Challenges in the markets and how to navigate

3 Destination investing Average advisors Focus: Out-performance Value propositions: Fund selection Tactical shifts Risk: Under-performance Successful advisors Focus: Relationship Value propositions: Planning Asset location Behavioural coaching Risk: Capacity

4 CI’s income & balanced solutions Investment Consulting SignatureHarbourCambridgeBlack Creek Diversified Income Portfolio Series High Income Portfolio Select Series Diversified Yield High Income BalancedPortfolio Series Canadian Balanced Growth & Income Canadian Asset Allocation Global Balanced Portfolio Select Series Income & Growth Global Growth & Income G5|20Global Income & Growth Assets ($61.3billion) $27.7$23.8$5.9$2.9$1.0 *As of August 2014

5 Managed solution landscape Fund CompanyAssets $3-year CAGR % RBC4923 CIBC4119 TD3722 CI Investments2434 Scotia2422 BMO2029 Investors Group208 Great-West Life175 Desjardins1517 National Bank1120 Top (77%)20 Source: Investor Economics, Dec 2013

6 Multi-Manager Excellence

7 CI Investment Consulting “We create investment solutions for investors and build relationships with advisors” CI Investment Consulting

8 Portfolio Management $28 billion assets under management

9 CI Investment Consulting NameTitleCredentials Industry Experienc e Alfred LamVP & Portfolio ManagerCFA, MBA, BComm14 Yoonjai ShinDirectorCFA, BA Economics11 Lewis HarkesSenior AnalystCFA, BA Economics10 Marchello HolditchSenior AnalystCFA, BMath (Honours)5 Andrew AshworthAnalystLevel II CFA, BMOS Finance4 Responsibilities: Portfolio managementAlfred, Yoonjai Trading/operationsYoonjai, Nick Asnani, Andrew Manager selectionAlfred, Yoonjai Due diligenceYoonjai, Alfred, Marchello, Lewis, Andrew Performance analysis & reportingLewis, Andrew CommunicationsAlfred, Yoonjai, Marchello Organizational Structure:

10 What is an investment plan? It’s a four-step process: 1.Discovery 2.Planning 3.Execution (Investments –TR Equation) 4.Review

11 Total return = Asset mix + Alpha + Market beta + Currency – Tax – Fees Optimize MaximizeManage Manage/reduce Minimize Reduce Total Return Equation

12 Portfolio Series, Best Fund of Funds Award – 2011 Portfolio Series, Best Fund of Funds Award – 2012 Portfolio Select Series, Best Fund of Funds Award – 2013 Industry Recognition

13 Stock market valuations Source: TD Securities

14 Suppressed volatility

15 Equity market return expectations Equity return = Risk-free return + Risk Premium Historical Today Risk-free2-4%0-1% Risk Premium4-6%4-6% Total Return6-10%4-7% Dividends2-3%2-4% Earnings Growth4-8%2-5%

16 Implications As long as rates stay low: Incentive for business to grow is less Incentive for business to hire is less Low wage inflation Market volatility is low

17 When will interest rates change Two years later?! When household and sovereign debts return to normal

18 Source: Bank of Canada Outlook: fixed income Bond markets are in a trading range

19 Represented by Select Income Managed Corporate Class Source: CI Investments Weighting (%) 2012 Q Q Q Q Q Q Q Q Q Q Q3 Target Cash % Government & IG corporate % High-yield bonds % High- dividend Stocks % Duration (years) Historical asset allocations: Select Income Managed Corporate Class (SIM)

20 FOR INTERNAL USE ONLY Select Income Managed Corporate Class Performance as of October 31, 2014 Performance has met expectations % 3mthYTD1yr2yr3yr5yr Since Inception* 3-yr Standard deviation Select Income Managed Corporate Class (Class A) FTSE TMX Universe Bond Index *November 2005

21 Total: 107 observations (months) SIM: controlled volatility

22 High consistency 1 yr2 yr3 yr5 yr7 yrSI (107 mths) Select Income Managed Corporate Class (Class A) TMX Universe Bond Index Select Income Managed Corporate Class (Class A) 92%83%86%82%80%79% TMX Universe Bond Index67%63%64%67% 65% Frequency of positive months as at Oct 2014

23 Recap of capital market outlook Record government and household debt levels put a lid on interest rates Low interest rates lead to sub-par growth Equity volatility is suppressed Bond volatility is unusually high; with unusually low expected returns

24 Positioning Income allocation to drive alpha Safety is not limited to cash and government bonds Take advantage of low equity market volatility Watch whether growth driven by p/e or earnings Watching EM bonds and stocks

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