Active Management Update and Forecast February …...100% employee owned Offices in Vancouver, Calgary and Toronto 3 Experience. Active Management. Key Fund Manager Bios Jim McGovern

www.arrow-capital.com Experience. Active Management.www.arrow-capital.com

Active Management

Update and Forecast

February 2020

Red Barn Investment Counsel

2020 Forecast Event

www.arrow-capital.com Experience. Active Management.

Disclaimer

This communication is not and under no circumstances is to be construed as an invitation to make an investment in the Exemplar Growth and Income Fund (“the

Fund”) nor does it constitute a public offering to sell the Fund. Applications for the Fund will only be considered on the terms set out in the Prospectus. Terms defined

in the Prospectus shall have the same meaning in this material. To receive a copy of the Prospectus please call Arrow Capital Management Inc., 877.327.6048 or

visit www.sedar.com or ask your financial advisor.

Fund inception date is March 16, 2015.

Unless otherwise stipulated Exemplar Fund returns are net of all fees, in Canadian dollars, reflect series “F” units and assume reinvestment of all distributions.

Commissions, trailing commissions, management fees and expenses all may be associated with Exemplar Funds. The blended index is 80% S&P/TSX and 20%

FTSE/TMX Canada Universe Bond Index. Please read the full prospectus before investing. Except as otherwise noted the indicated rates of return are the historical

compounded total returns including changes in share or unit value and the reinvestment of all dividends or distributions and do not take into account the sales,

redemption, distribution, optional charges or income tax payable by the unitholder or shareholder that would have reduced returns. Exemplar Funds are not insured

or guaranteed by Canada Deposit Insurance Corporation (CDIC) or any other insurer. Exemplar Funds are subject to risks of loss of capital and income and their

values change frequently. Past performance may not be repeated.

This document has been compiled by Arrow Capital Management Inc. from sources believed to be reliable, but no representations or warranty, express or implied,

are made by Arrow Capital Management Inc. its affiliates or any other person as to its accuracy, completeness or correctness. All opinions and estimates constitute

Arrow Capital’s judgment as of the date of this document, are subject to change without notice and are provided in good faith but without legal responsibility.

The Star Rating is as of December, 2019 for Series F of the Exemplar Growth and Income Fund. The number of funds within its category is as follows: Canadian

Equity Balanced Category: 3 years – 5 stars (347 funds). Morningstar Star Ratings are subject to change monthly. The rating is an objective, quantitative measure of

a fund’s historical risk-adjusted performance relative to other funds in its category. Only funds with at least a three-year track record are considered. The Morningstar

Risk-Adjusted Rating (MRAR), commonly referred to as the Star Rating, relates the risk-adjusted performance of a fund to its peers in the category. Morningstar

calculates ratings only for categories with at least 20 funds. To determine a fund's rating, the fund and its peers are ranked by their MRARs. If a fund scores in the

top 10% of its fund category, it receives five stars (High); if it falls in the next 22.5%, it receives four stars (Above Average); a place in the middle 35% earns a fund

three stars (Neutral or Average); those in the next 22.5% receive two stars (Below Average); and the lowest 10% get one star (Low). Morningstar Risk-Adjusted

Ratings are recalculated monthly. For additional resources on the Star Rating and answers to frequently asked questions, see morningstar.ca.

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc.

to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is

calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio,

Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted

equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade;

the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every

month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0,

respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more

information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy

is not guaranteed by Fundata.

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http://www.sedar.com/

http://www.fundgradeawards.com/


Arrow Capital Management Inc.

20 years in business, award winning asset management firm

Expertise in global alternative and active portfolio management

AUM of over C$1.1 billion

100% employee owned

Offices in Vancouver, Calgary and Toronto

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Key Fund Manager Bios

Jim McGovern

Jim McGovern founded Arrow Capital Management in 1999, bringing over 30 years of related experience.

Previously he was President and Chief Executive Officer at BPI Financial Corporation (Canada), a publicly

traded company that he co-founded thirteen years prior and which managed or administered over $6bn. Jim is

a founding and past Chairman of the Canada National Group of the Alternative Investment Management

Association. Jim graduated from the University of Toronto with a Bachelor of Commerce and Finance degree.

He is active in charitable organizations, including Hedge Funds Care Canada and University Health Network.

He also serves on the Board of Trustees of the Fraser Institute.

Ted Whitehead, CFA

Ted Whitehead is a Senior Portfolio Manager with Arrow Capital, bringing over 30 years of experience in the

Financial Industry. Prior to joining Arrow, Ted spent 20 years at Manulife Asset Management as a Senior

Portfolio Manager managing Small/Mid and All Cap Portfolios. Previously he was a Trader at Credit Suisse and

Investment Advisor at both RBC Dominion Securities and Walwyn Stodgell Cochran Murray.

Ahson Mirza, CFA

Ahson Mirza is a Portfolio Manager at Arrow Capital Management and is responsible for market research and

idea generation supporting the portfolio management team. Prior to joining Arrow Capital, Ahson worked for

Timelo Investment Management in Toronto and Formula Growth Limited in Montreal as an investment analyst.

Ahson graduated from McGill University in 2010 with a Bachelors in Electrical Engineering and a minor in

Finance.

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Exemplar Growth & Income Fund – Performance Objectives

Superior performance especially during periods of market drawdowns

Lower volatility than benchmark and peer group

Lower correlation to benchmark and peer group

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Investment Process

10 Sectors = 150 Subsectors

Identify securities with

additional alpha

Sectors

Securities

Economic Cycle

Growth and Inflation

This is what we

expect to drive

majority of returns

versus equity

selection

Forecast 2Q’s ahead:

• Growth accelerating

or decelerating?

• Inflation accelerating

or decelerating?

Add alpha at this level but

focus on diversification, no

big bets, actively managed

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Exposure: Partially Invested

Overweight: Bonds

Underweight: Equities

Asset Allocation Model – Where are we in the Economic Cycle?

+

Real Growth Inflationary Growth

–

Deflation/Disinflation

–

+

Stagflation

GDP Growth

Exposure: Fully Invested

Overweight: Growth Equities

Neutral: Bonds

Exposure: Partially Invested

Overweight: Cash

Neutral: Equities

Inflation

Exposure: Fully Invested

Overweight: Cyclical Equities

Underweight: Bonds

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Current Environment


U.S. Real GDP Forecasts

8

Source: Hedgeye Risk Management


U.S. Headline CPI Forecasts

9

Source: Hedgeye Risk Management


Exemplar Growth & Income Asset Allocation As of December 31, 2019

Source: Arrow Capital

Risk management tools:• Inverse ETF’s• Puts on equity indexes• High cash levels

Typically high annual portfolio turnover.

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Fund Performance Statistics: Since Inception (March 16, 2015)

Source: Morningstar Direct, as at December 31, 2019

Exemplar Growth & Income Fund

(F-Class) Blended Benchmark

Cumulative Return 42.68% 28.34%

Annualized Return 7.77% 5.39%

Volatility 4.39% 7.17%

Up Capture Ratio 64.44% 100.0%

Down Capture Ratio 5.20% 100.0%

Correlation 0.40 1.0

Max Drawdown -2.57% -10.93%

Sharpe Ratio 1.56 0.65

Sortino Ratio 3.50 1.03

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Growth of $1,000Exemplar Growth & Income Fund vs. Blended Benchmark & Canadian Equity Balanced Funds

Time Period: 3/24/2015 to 12/31/2019

Source: Morningstar Direct

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Exemplar Growth and Income Fund (Class F)

Blended Benchmark

Canada Fund Canadian Equity Balanced


Why Invest in the Exemplar Growth & Income Fund?

Core investment fund for any Advisor:

One Fund Solution to Optimize Active Allocation Between Stocks and

Bonds

Successfully Navigate Through Difficult Markets

Ideal for Accounts Needing Professional Asset Allocation

Available for Purchase in Both Mutual Fund and ETF (Ticker: EGIF)

M o r n i n g s t a r R a t i n g T M

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Contact Information

For more information, please contact:

www.arrow-capital.com

[email protected]

T: (416) 323-0477 | TF: (877) 327-6048

Arrow Capital Management Inc.

36 Toronto Street, Suite 750

Toronto, Ontario

M5C 2C5

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Documents

Active Management Update and Forecast February …...100% employee owned Offices in Vancouver, Calgary and Toronto 3 Experience. Active Management. Key Fund Manager Bios Jim McGovern