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Heward Global Leaders Fund

Autumn 2017

Heward Investment Management Providing client-focused portfolio management services since 1981

Agenda

• Welcome and Introduction

• Global Economic Outlook

• The Heward Global Leaders Fund

• Why own this investment solution?

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Introduction to Heward - Trust, Discipline, Independence

3 Confidential- Not for Distribution or Disclosure- For discussion purposes only

Heward Investment Management has been providing client-focused portfolio management services since 1981. Our independence and disciplined

investment management approach has provided our clients with value-added performance and made us a trusted partner.

• The firm remains independently owned by the principals of the firm, thus assuring its continued independence.

• The Heward family’s history in the investment business began in 1925.

• Shareholders are the Heward family and key personnel.

• A team of 6 portfolio managers

• Heward is registered in the category of Portfolio Manager with all appropriate Securities Regulatory Authorities as required.

• Diverse client base: 80% Private Clients & Family Holding Companies, Family Offices; 20% Institutional (Hospitals, Charitable foundations).

We Maintain a Positive Stance Towards Global Equity Markets

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We remain constructive on global equity markets due to:

1. Global growth is improving, Inflation at lowest level in 8 years

2. US economy upbeat: 2% + real GDP growth

3. S&P earnings are crushing it! Key for Markets!

4. Europe’s economy is much improved; Political worries have abated

5. A lot of liquidity! Global Central Banks maintaining low rates and Private Equity fund raising is on pace to exceed $220 billion, a record

We Maintain a Positive Stance Towards Global Equity Markets

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Every major bull market has ended after significant hikes in interest rates resulting in an inverted yield curve.

We are not there, not even close! Source: ISI Research

US Is Confident and Doing Well

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Significant U.S. Consumer Deleveraging; If Americans are confident, have jobs, they will spend and invest

Source: Evercore ISI Research

US Market Tracks Earnings

Source: GMO, Morgan Stanley / Citibank

US Corporate profitability is key; the S&P Tends to Track Earnings; the Direction of Earnings is Up!

In 2018,if S&P500 earnings are $135-145? Assuming an 18-19x P/E multiple = 2430-2755 or 8 -12% Upside

Europe Gaining Traction

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After 10 Tough Years, European Consumer Confidence is Up, Unemployment is Improving; Consumers are Spending Again!

Source: Source: SG Cross Asset Research/Equity Strategy

European vs. US S&P 500

9 Source:JP Morgan Research

Europe’s Index and Earnings Differential with the US is significant This Should Narrow…

Investment Cycle is 8 Years Young

Source: Economap, StockCharts.com

Long term growth rate of approximately 8% Plus Dividends.

The current BULL MARKET is “only” 8 years young…

The Millennials Cohort Following Generation X

Source: Canaccord Genuity

Why the Economic/Investment Cycle could extend another 5-10 years

According to the US 2016 Census, there were approximately 88 million 16-35 yr-olds in the US representing nearly a third of the total population! Over next 5 years, there will be a big increase in the number of people turning 30,(as in the 1980s) which contributed to spending and the investment boom of 1990s.

If “Millennials” are confident and working, they will spend and invest and they are reaching the age to do so.

The Millennials Cohort Following Generation X

Source: Canaccord Genuity

High Valuations?

Source: Ben Garrison Graphics

Consensus Estimates 2017-2018

Although the S&P 500 is expensive and selective “growth” stocks are as well...

…the market is currently trading around “fair Value” if corporate earnings finish 2017 around consensus estimates of $132 . If consensus estimates for next year are close? The

S&P has room to run based on $146…

REMEMBER the path of the market tends to track earnings….

Source: Strategas Research Partners – Investment Strategy

RISKS? What Are We Concerned About?

We are very mindful of the Geopolitical Risks……

…..and aware of the “noise” around them, but they do present investment opportunities!

Source: Financial Times

USD has been weak...

“The dollar is getting too strong because of confidence in me” President Trump April 2017

Is this a new era of American competitive currency devaluation?

Source: Strategas Research Partners LLP, Bloomberg

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Heward Global Leaders Fund

Heward Global Leaders Fund

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• Seeks to generate consistent returns over the long term by identifying high-quality global businesses that are attractively priced

• Companies are leaders in their respective business field, have high defendable barriers to entry, solid management, high returns on invested capital and consistent return of capital via dividends

• Focused on predictable high-quality global businesses, the goal is to preserve capital during market corrections and downturns while generating value over an economic cycle

• Comprised of 35-45 leading global businesses from five regions: North America, Europe, Asia-Pacific, Japan & Emerging Markets

• The firm’s core themes figure prominently in the Fund

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• 25% Top-down approach determines asset allocation

• 75% Bottom-up approach to determine stock selection

• The approach allows us to be mindful of currency risk and

geopolitical risk while searching for opportunity as well . Stock selection remains the main driver for returns

Heward Global Leaders Fund

Bottom Up

PORTFOLIO

Top Down

This investment approach demonstrates how Heward is DIFFERENT

from other Investment Managers

Heward Investment Themes

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• Dividend growth • Technology/Digital

• E-Commerce

EMERGING THEMES

• Infrastructure Spending

• Demographics: Health and lifestyle of the aging population & Millennials

• Emergence of middle class in developing countries

CURRENT THEMES

INDUSTRY

• Growing industry

• Understand a company’s business

MANAGEMENT

• Focused and committed management team

• Conservative yet innovative culture

• Stock ownership, not just stock options

Heward Equity Selection Process

VALUATION

• Low price-to-earnings (P/E) multiples

• Low price-to-cash-flow multiples

• Discounted valuation compared to peers

• DCF (intrinsic value)

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FUNDAMENTALS

• Consistent and sustainable earnings growth

• Cash flow

• Sound Balance Sheet

Heward Global Leaders Fund- Geographic Allocation

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MINIMUM MAXIMUM BENCHMARK

US Equities 10

65 50

International Equities 10 50

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Canadian Equities 0 20

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Cash & Cash Equivalents 5 25

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BENCHMARK: 80%MSCI World, 10% S&P TSX, 10% 90 Day TBill

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Heward Global Leaders Fund- Country Allocation as of Sept. 30th, 2017

* Cash 14.3% Source: iShares MSCI World ETF

COUNTRY FUND MSCI O/U

United States 41.80% 58.80% -

United Kingdom 14.10% 6.60% +

Switzerland 7.50% 3.10% +

Canada 7.40% 3.60% +

Germany 6.10% 3.60% +

France 2.70% 4.00% -

Singapore 2.40% 0.40% +

Hong Kong 2.00% 1.30% +

Japan 1.80% 8.60% -

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Heward Global Leaders Fund- Sector Allocation As of Sept. 30, 2017

Source: MSCI World

SECTOR ALLOCATION FUND MSCI

WORLD O/U

HEALTH CARE 15.55% 12.54% +

INDUSTRIALS 14.58% 11.69% +

INFORMATION TECHNOLOGY 13.57% 16.01% -

FINANCIALS 11.76% 18.05% -

MATERIALS 9.92% 5.04% +

ENERGY 9.05% 6.19% +

TELECOMMUNICATION SERVICES 4.17% 3.00% +

CONSUMER STAPLES 4.03% 9.12% -

CASH 14.30% N/A N/A

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Performance as of September 30th, 2017

*Inception Date : April 30, 2017

Performance is calculated after brokerage costs, but before management fees. Management fees and administrative expenses all may be associated with pooled fund investments. Please read the offering memorandum before investing. The indicated rates are the historical compound total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Pooled funds are not guaranteed, their value changes frequently and past performance may not be repeated. The Global Leaders Benchmark has been used since the inception of the Heward Global Leaders Fund on April 30, 2017. It reflects the Fund’s investment policy of and 80% global equity, 10% Canadian equity and 10% cash (+/- 20%).

Heward Global Leaders Fund (MAJ750)

C O M P O U N D E D

1M 3M 6M YTD 1YR 2YRS 3YRS 5YRS Since

inception

Heward Global Leaders Fund* +0.80% +0.08% -- -- -- -- -- -- -3.69%

Global Leaders Benchmark +1.94% +0.85% -- -- -- -- -- -- -1.84%

TOP TEN HOLDINGS AS OF SEPTEMBER 30th , 2017

NOVARTIS AG ADR 3.30%

ROYAL DUTCH SHELL ADR 3.29%

SIEMENS AG 3.08%

BLACKSTONE GROUP UNIT 3.08%

DOWDUPONT INC 3.02%

CHEVRON CORP COMMON 3.01%

APPLE INC COMMON 2.96%

AMGEN INC COMMON 2.87%

FEDEX CORP COMMON 2.75%

TOTAL SA ADR 2.74%

TOTAL 30.10%

Heward Global Leader Fund- Investment Opportunities

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• In February 2016, it acquired BG Group, a global E&P player and Shell now controls over 25% of the world’s LNG market

• We believe that Shell has the most resilient cash flow profile in the European integrated oil sector, yet the stock’s dividend yield remains the highest in the peer group at 6.7%.

• With the European market typically in an average dividend yield of 3-3.5%, a “normal yield” for Shell of approximately 5% (in line with its 3-yr average) is a reasonable expectation.

• Shell has the largest retail footprint of all the oil majors, with approximately 43,500 retail sites. Operating across over 80 countries, Shell services over 25m customers a day.

Heward Global Leader Fund- Royal Dutch Shell

Shell is a core holding for the fund. Assuming a long term oil price of $60/bbl, a 7.5x EV /Debt Adjusted Cash Flow multiple and a yield of 5.5% - this would imply a valuation of $70-75 / share or a return of over 25% incl dividends

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• We see the Dow DuPont merger unlocking significant synergies and value creation over the next 3 years and expect the company to deliver meaningful earnings growth.

• By late 2019, the breakup of the company into 3 focused spinoff companies is expected to be complete. This event should lead to multiple uplift for higher-value businesses (especially agricultural and specialty businesses) that would otherwise trade at a 'conglomerate discount’.

• At least $3 billion of cost synergies may prove conservative, but in the mean time provides a solid restructuring story. We believe that the long-term value creation potential of DowDuPont is significant and not adequately valued in today's stock price.

Heward Global Leader Fund- Dow Dupont

The Stock recently traded at $68 and our 12-18 month target is $82 based on a “sum-of-the-parts” method - The upside for DWDP is the improvement in the outlook for Agriculture, new product growth, additional productivity gains and a weaker USD.

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• We expect revenue in 2018 to be driven by strong new customer additions, and the favorable reception of the company’s mobile offerings.

• VOD shares are attractively valued at current prices near $28. The shares are trading near the midpoint of their 52-week range of $24-$32.

• Significant upside in the shares could materialized with Vodafone doing a deal with John Malone’s Liberty Global, where VOD could have synergies with Liberty Global, (This publicly discussed since mid 2015 in the UK media) with the latest actual merger in The Netherlands of Vodafone and Liberty Global's assets proving a test case.

• Vodafone has guided to 4-8% EBITDA growth for FY18E and VOD Management raised the dividend last year and has a 'progressive' dividend policy with a goal of modest growth.

Heward Global Leader Fund- Vodafone

Vodafone’s balance sheet is solid, and its dividend yields about 5.7% and was increased this past year. Our target for Vodafone is $32 based on our sum-of-the-parts analysis and an industry-average yield of 5.0% which could represent a total return north of 35% including dividends.

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• We believe Siemens will re-rate as investors underestimate management's actions to de-conglomerate and simplify the business.

• Siemens’ Healthcare division Healthineers, is a leading player in imaging equipment including technology such as CT and MRI scanners, as well as in laboratory diagnostic equipment used for testing samples such as urine and blood.

• The company announced in November 2016 that it intended to seek a separate listing for Healthineers. Siemens has not provided a detailed timetable for the announced proposal but several analysts point to a valuation of a €34bn-€38bn EV for the division which is significant value potentially being established.

• Siemens currently has a record €115bn backlog, or approx. 1.3x 2017e sales.

Heward Global Leader Fund- Siemens

Siemens balance sheet is very strong, and its dividend yield is over 3%. Our price objective for Siemens is €135 0r $82 and is based on our sum-of-the-parts analysis which could represent a total return north of 20% including dividends

• Suitable for clients seeking conservative, “blue chip”, dividend paying stocks that follow our “growth-at-a-reasonable-price” approach and investment philosophy

• The fund owns companies that are leaders in their respective business field, have high defendable barriers to entry, solid management, high returns on invested capital and consistent return of capital via dividends

• Growth opportunities (EG Health Care, Pharma, Technology) not easily available in Canada, paying attractive and growing dividends

• The Heward Global Leaders Fund is focused on predictable high-quality global businesses, the

goal is to preserve capital during market corrections and downturns while generating value over an economic cycle.

• The goal of the fund is to have a management expense ratio (MER) of the fund below 1.5% and declining as the fund grows vs. comparable global mutual funds with 2.5-3% MER’s.

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Why Own the Fund?

The Heward Global Leaders Fund is a registered Canadian investment fund therefore, the securities will not be registered in a clients name or holding company; an opportunity for clients who cannot own American

securities directly due to US tax concerns.

• The Heward Global Leaders Fund can be bought directly from Heward Investment Management

• Alternatively, the Fund can be purchased through your financial advisor/broker, on

Fundserv using the code MAJ752 (F Class) or MAJ751 (A Class) • The custodian of the Fund is NBCN (National Bank Correspondents Network) This is where client money is held

• Quarterly statements are provided and one T-6 tax form is issued at the end of the year

for simplified tax reporting

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How to Buy the Fund?

Heward Fund Codes

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The funds are available directly through Heward Investment Management or on “Fundserv” if a client wishes to purchase the fund

through another financial institution

Class “O” is for Heward Clients - Only Regular Fees Apply: 1st $2m = 1%, $2-5m = 75bps, $5m+ 50bps Class “A” is available through a client’s financial advisor and financial institution with an agreement with Heward Class “F” new clients and paid through the fund at 1% (mgmt. fees within the fund) Class “D” is available for Endowments, Family Offices, and Foundations and is negotiable pending size of investment

FUND CLASS O CLASS A CLASS F CLASS D

Heward Global Leaders Fund MAJ750 MAJ751 MAJ752 MAJ753

Heward Equity Fund MAJ450 MAJ451 MAJ452 MAJ453

Heward Income Fund MAJ650 MAJ651 MAJ652 MAJ653

Heward Canadian Dividend Growth Fund MAJ550 MAJ551 MAJ552 MAJ553

Why Heward

• Our investment philosophy aims to provide long-term capital growth for our clients’ portfolios while minimizing its exposure to risk and volatility

• Access to portfolio managers

• Disciplined investment process that has provided value added results

• We believe active management outperforms- we are not indexers

• Competitive fees and proven long-term performance

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Our independence, investment experience, and commitment to our clients make our firm an attractive alternative in the investment business.

Contact

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Heward Investment Management Inc. 2115 rue de la Montagne Montreal, Quebec H3G 1Z8

Geoffrey T B Heward, Portfolio Manager & Senior Vice-President Tel Direct: +1 514 788 0512 Fax:+1 514 985 5755 Toll Free: 1 800 567 5257

Website: www.heward.com E-mail: gheward@heward.com

This material is for your private information and should not be reproduced or distributed. COPYRIGHT 2017 HEWARD INVESTMENT MANAGEMENT INC.