1. Give me a higher return The Signature Income & Growth story
Geof Marshall, CFA and
Malcolm White, CFA

2. Finding income in a low yield world
Relative value in a traditional balanced asset mix
Forward earnings yield based on IBES 12-month forward S&P 500 earnings

3. Income opportunities – high-yield bonds
“Yield is a head start on outperformance”
Offset equity volatility Offset interest rate risk
High yield: 90% of the monthly return of stocks with 45% of the volatility
= 2x higher risk-adjusted returns
$1 trillion market
17% of the S&P 500 is high-yield rated
Cannot do this yourself - covenants and diversification matter, cannot rely on credit ratings
Avoiding defaults = outperformance
Quick comment on high yield valuations: price, yields, spreads, expected defaults, spread per turn of leverage
–– High yield cumulative return –– S&P 500 cumulative return

4. High-yield bonds
More to credit analysis than credit ratings:

5. High-yield bonds
More to credit analysis than credit ratings:

6. Sears overview More to credit analysis than credit ratings:
Retailing icon founded in 1893
4,000 Retail Locations, #4 Broadline retailer in the U.S.
Hedge fund ownership
Sears and Kmart combined in March 2005
Strategy remains adrift, financial results deteriorating
Sears introduction slide
Security = working capital but no limit on additional sec’d debt
Real estate not included
Brands (Land’s End, Kenmore, Craftsman) not included
No restrictions on value leakage (share buybacks)

7. Neiman Marcus overview
More to credit analysis than credit ratings:
Women’s luxury apparel retailer
44 stores in the U.S. including Bergdorf Goodman in New York
2005 private equity leveraged buyout
Luxury consumer is back
InCircle customer focus sets them apart
Store growth has resumed
Number of stores
Bergdorf-Goodman
Same-store sales growth
Growth potential
Luxury consumer
De-leveraging + dividend

8. Income opportunities: High-yield bonds
Bond comparison
Sears Holding <SHLF>
Neiman Marcus <NMG>
6.625% due 10/15/2018
10.375% due 10/15/2015
Call schedule
Non-callable
With 30 days notice at
or at beginning 10/15/12
Structure
Senior secured
Senior subordinated
Credit ratings at time of issue
Ba1 / BB+
(September 2010)
B3 / B-
(September 2005)
Credit ratings now
B2 / B
(Negative outlook both)
Caa1 / B-
(both Stable)

9. Four C’s of credit analysis: Capacity to repay
Sears
90% decline in EBITDA since ~2006
18 quarters of negative same-store sales growth
$40 billion in sales, ~$400mm in capital expenditures
Canada no longer an ATM
Answer = asset sales
Neiman Marcus
EBITDA approaching pre- recession highs
Positive same-store sale growth trend since 2010
Sponsor dividend funded by cash on hand
Capital markets receptive to this company
Advantage: NMG

10. Four C’s of credit analysis: Character
Sears
Revolving door management – new CEO has no previous retail experience
Asset stripping and self-dealing
Weak reporting standards and high executive turnover
Unreasonable shareholder activity
Neiman Marcus
New CEO, promoted from within
Depth and longevity to management team
Best-in-class private company disclosure
Reasonable shareholder activity
Advantage: NMG

11. Four C’s of credit analysis: Collateral
Sears
Significant inventories
Material owned real estate assets
Valuable brands: Kenmore, Craftsman, DieHard
Land’s End
Sears Canada
Neiman Marcus
Small proportion of owned real estate
Merchandise inventory subject to fashion risk
Business model generates consistent cash flow
International markets remain untapped
Advantage: Tie

12. Four C’s of credit analysis: Covenants
Sears
2nd lien on inventory and accounts receivable with put right
Yard sale of real estate and brands continues
Introduction of additional secured debt probable
Unlimited restricted payments
Neiman Marcus
Most junior debt in capital structure
No security
Significant layering possible
‘Covenant-lite’ capital structure
Restricted payments largely exhausted
Advantage: Tie

13. Income opportunities: High-yield bonds
Price difference: bad business = volatility
–– Nieman Marcus Bond –– Sears bond
Source: Bank of America

14. Income opportunities: High-yield bonds
Performance difference: aiming for ‘boring’
SHLD6.625%
NMG10.375%
Cumulative performance since September 2010
-1.4%
17.5%
Source: Bank of America

15. What happens when interest rates rise?
High yield and U.S. investment grade bond return correlations to 5-year U.S. Treasuries (52 week trailing)
Source: Bank of America

16. What happens when interest rates rise?
High-yield bond returns during past federal funds rate tightening episodes (total returns/not annualized)
Source: UBS (Federal Reserve Board and Bureau of Economic Analysis)
Index data is Bank of America Merrill High Yield Master II Index in USD

17. Ways to gain exposure to Signature’s high-yield bond portfolio
Fund name
Exposure to high-yield bond portfolio (%)
Signature High Yield Bond Fund
100%
Signature Corporate Bond Fund
59%
Signature Diversified Yield Fund
47%
Signature High Income Fund
35%
Select Income Advantage Managed CC
22%
Signature Income & Growth Fund
17%
Aside from the new Signature High Yield Bond Fund, there are a number of Signature funds that have exposure to the high-yield bond portfolio.
These funds include Signature Corporate Bond Fund, Signature Diversified Yield Fund, Signature High Income Fund, Select Income Advantage Managed Corporate Class and CI Income Fund and Signature Income & Growth Fund.
So, if you are looking for exposure to an asset class that can provide you with equity-like returns but with less volatility, you can turn to any of the above funds to complement your portfolio.
Source: CI Investments, March 2012

18. CI Signature Diversified Yield Fund
YTD
1 Year
2 Year
Since inception*
Signature Diversified Yield Fund
5.1%
1.9%
6.2%
6.1%
Quartile 1 2
n/a
*Inception November 2009
Source: Globefund

19. CI Signature High Income Fund
1 Year
3 Year
5 Year
10 Year
Since inception*
Signature High Income Fund
3.7%
18.1%
4.5%
9.2%
9.7%
Quartile 1
N/A
*Inception December 1996
Source: Globefund

20. CI Signature Corporate Bond Fund
1 Year
3 Year
5 Year
10 Year
Since inception*
Signature Corporate Bond Fund
5.3%
11.6%
5.1%
4.7%
4.5%
Quartile 2 3
N/A
*Inception December 2001
Source: Globefund

21. GROWTH

22. The Hype was Real – Just The Timing was Wrong
Source: Gartner, Bloomberg

23. More Devices than People
Source: Intel

24. Facebook – the largest country in the world
Facebook users (in millions)
Source: Facebook; Graph by Ben Foster

25. Facebook – we know where you live & who you know
Source: Facebook

26. More data than the world has ever seen
Source: Passive Pundits

27. Powered by Virtual Cities of Infrastructure
What is 10PB; Source: Backblaze

28. Yes, they do make money …
Source: Google

29. … And the possibilities are unthinkable
Source: IBM

30. Malcolm White – Portfolio Manager
Malcolm White, CFA Vice-President, Portfolio Management and Portfolio Manager with Signature Global Advisors of CI Investments Inc., has over 16 years of investment experience in a career that included analytic roles at Merrill Lynch Canada and First Marathon Securities (now National Bank Financial).
Malcolm specializes in the technology, media and telecommunications sectors. He was selected as one of Canada’s Top 50 Portfolio Managers and global industry expert in recent Brendan Wood International surveys.

31. Disclaimer
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. ®CI Investments and the CI Investments design are registered trademarks of CI Investments Inc.