ScotiaFunds Interim Reportdr.scotiabank.com/ca/en/files/17/08/ScotiaFunds_FS_2017...1 Economic & Financial Market Outlook Financial Statements Cash Equivalent Funds 3 Scotia T-Bill

1

Cash Equivalent FundsScotia T-Bill FundScotia Premium T-Bill FundScotia Money Market FundScotia U.S. $ Money Market Fund

Income FundsScotia Short Term Bond FundScotia Private Short-Mid Government Bond PoolScotia Mortgage Income FundScotia Floating Rate Income FundScotia Conservative Income Fund Scotia Bond FundScotia Canadian Income FundScotia Private Total Return Bond PoolScotia Private Canadian Corporate Bond PoolScotia Private Canadian Preferred Share PoolScotia U.S. $ Bond FundScotia Global Bond FundScotia Private Global Credit Pool

Balanced FundsScotia Diversified Monthly Income FundScotia Income Advantage FundScotia Canadian Balanced FundScotia Dividend Balanced FundScotia Balanced Opportunities FundScotia Global Balanced FundScotia U.S. $ Balanced Fund

Equity FundsCanadian Equity FundsScotia Canadian Dividend FundScotia Canadian Blue Chip FundScotia Private Canadian Equity PoolScotia Private Fundamental Canadian Equity PoolScotia Private Canadian All Cap Equity PoolScotia Canadian Growth FundScotia Canadian Small Cap FundScotia Resource FundScotia Private Real Estate Income PoolScotia Private North American Dividend Pool

U.S. Equity FundsScotia U.S. Dividend Fund Scotia Private U.S. Dividend PoolScotia Private U.S. Equity PoolScotia U.S. Blue Chip FundScotia U.S. Opportunities Fund

International Equity FundsScotia Private International Core Equity PoolScotia International Value FundScotia European FundScotia Pacific Rim FundScotia Latin American Fund

Global Equity FundsScotia Private Global Low Volatility Equity PoolScotia Global Dividend FundScotia Global Growth FundScotia Global Small Cap FundScotia Global Opportunities Fund

Specialty FundsScotia Private Options Income Pool

Index FundsScotia Canadian Bond Index FundScotia Canadian Index FundScotia U.S. Index FundScotia CanAm Index FundScotia Nasdaq Index FundScotia International Index Fund

Scotia PortfoliosScotia Selected® PortfoliosScotia Selected Income PortfolioScotia Selected Balanced Income PortfolioScotia Selected Balanced Growth PortfolioScotia Selected Growth PortfolioScotia Selected Maximum Growth Portfolio

Scotia Partners Portfolios®

Scotia Partners Income PortfolioScotia Partners Balanced Income PortfolioScotia Partners Balanced Growth PortfolioScotia Partners Growth PortfolioScotia Partners Maximum Growth Portfolio

Scotia INNOVA Portfolios®

Scotia INNOVA Income PortfolioScotia INNOVA Balanced Income PortfolioScotia INNOVA Balanced Growth PortfolioScotia INNOVA Growth PortfolioScotia INNOVA Maximum Growth Portfolio

Scotia Aria™ PortfoliosScotia Aria Conservative Build PortfolioScotia Aria Conservative Core PortfolioScotia Aria Conservative Pay PortfolioScotia Aria Moderate Build PortfolioScotia Aria Moderate Core PortfolioScotia Aria Moderate Pay PortfolioScotia Aria Progressive Build PortfolioScotia Aria Progressive Core PortfolioScotia Aria Progressive Pay Portfolio

Scotia Corporate Class FundsScotia Conservative Government Bond Capital Yield ClassScotia Fixed Income Blend ClassScotia Canadian Dividend ClassScotia Canadian Equity Blend ClassScotia U.S. Equity Blend ClassScotia Global Dividend ClassScotia International Equity Blend ClassScotia INNOVA Income Portfolio ClassScotia INNOVA Balanced Income Portfolio ClassScotia INNOVA Balanced Growth Portfolio ClassScotia INNOVA Growth Portfolio ClassScotia INNOVA Maximum Growth Portfolio ClassScotia Partners Balanced Income Portfolio ClassScotia Partners Balanced Growth Portfolio ClassScotia Partners Growth Portfolio ClassScotia Partners Maximum Growth Portfolio Class

ScotiaFunds®

Interim ReportJune 30, 2017

1

F O R M O R E I N F O R M A T I O N A B O U T

ScotiaFunds®

visit :

www.scotiafunds.com

call :

1-800-268-9269 (English)1-800-387-5004 (French)

write:

1832 Asset Management L.P.1 Adelaide Street East

28th FloorToronto, Ontario

M5C 2V9

® Registered trademarks of The Bank of Nova Scotia, used under licence.

9471219 (08/17)

1 1 11

Tableof Contents

1 Economic & Financial Market Outlook

Financial Statements

Cash Equivalent Funds3 Scotia T-Bill Fund6 Scotia Premium T-Bill Fund9 Scotia Money Market Fund13 Scotia U.S. $ Money Market Fund

Income Funds17 Scotia Short Term Bond Fund21 Scotia Private Short-Mid Government Bond Pool26 Scotia Mortgage Income Fund30 Scotia Floating Rate Income Fund38 Scotia Conservative Income Fund41 Scotia Bond Fund45 Scotia Canadian Income Fund50 Scotia Private Total Return Bond Pool55 Scotia Private Canadian Corporate Bond Pool61 Scotia Private Canadian Preferred Share Pool67 Scotia U.S. $ Bond Fund71 Scotia Global Bond Fund75 Scotia Private Global Credit Pool

Balanced Funds81 Scotia Diversified Monthly Income Fund87 Scotia Income Advantage Fund95 Scotia Canadian Balanced Fund101 Scotia Dividend Balanced Fund107 Scotia Balanced Opportunities Fund120 Scotia Global Balanced Fund126 Scotia U.S. $ Balanced Fund

Equity FundsCanadian Equity Funds131 Scotia Canadian Dividend Fund136 Scotia Canadian Blue Chip Fund141 Scotia Private Canadian Equity Pool145 Scotia Private Fundamental Canadian

Equity Pool148 Scotia Private Canadian All Cap Equity Pool152 Scotia Canadian Growth Fund158 Scotia Canadian Small Cap Fund163 Scotia Resource Fund169 Scotia Private Real Estate Income Pool174 Scotia Private North American Dividend PoolU.S. Equity Funds178 Scotia U.S. Dividend Fund181 Scotia Private U.S. Dividend Pool186 Scotia Private U.S. Equity Pool191 Scotia U.S. Blue Chip Fund195 Scotia U.S. Opportunities FundInternational Equity Funds200 Scotia Private International Core Equity Pool205 Scotia International Value Fund211 Scotia European Fund215 Scotia Pacific Rim Fund219 Scotia Latin American FundGlobal Equity Funds223 Scotia Private Global Low Volatility Equity Pool228 Scotia Global Dividend Fund235 Scotia Global Growth Fund241 Scotia Global Small Cap Fund246 Scotia Global Opportunities Fund

Specialty Funds251 Scotia Private Options Income Pool

Index Funds258 Scotia Canadian Bond Index Fund271 Scotia Canadian Index Fund277 Scotia U.S. Index Fund285 Scotia CanAm Index Fund289 Scotia Nasdaq Index Fund294 Scotia International Index Fund

Scotia PortfoliosScotia Selected® Portfolios299 Scotia Selected Income Portfolio303 Scotia Selected Balanced Income Portfolio308 Scotia Selected Balanced Growth Portfolio313 Scotia Selected Growth Portfolio318 Scotia Selected Maximum Growth Portfolio

Scotia Partners Portfolios®

323 Scotia Partners Income Portfolio327 Scotia Partners Balanced Income Portfolio332 Scotia Partners Balanced Growth Portfolio337 Scotia Partners Growth Portfolio342 Scotia Partners Maximum Growth Portfolio

Scotia INNOVA Portfolios®

347 Scotia INNOVA Income Portfolio351 Scotia INNOVA Balanced Income Portfolio355 Scotia INNOVA Balanced Growth Portfolio360 Scotia INNOVA Growth Portfolio364 Scotia INNOVA Maximum Growth Portfolio

Scotia Aria Portfolios368 Scotia Aria Progressive Build Portfolio372 Scotia Aria Progressive Core Portfolio377 Scotia Aria Progressive Pay Portfolio382 Scotia Aria Conservative Build Portfolio386 Scotia Aria Conservative Core Portfolio391 Scotia Aria Conservative Pay Portfolio396 Scotia Aria Moderate Build Portfolio400 Scotia Aria Moderate Core Portfolio405 Scotia Aria Moderate Pay Portfolio

Scotia Corporate Class Funds410 Scotia Conservative Government Bond Capital

Yield Class414 Scotia Fixed Income Blend Class418 Scotia Canadian Dividend Class422 Scotia Canadian Equity Blend Class426 Scotia U.S. Equity Blend Class429 Scotia Global Dividend Class433 Scotia International Equity Blend Class436 Scotia INNOVA Income Portfolio Class440 Scotia INNOVA Balanced Income Portfolio Class444 Scotia INNOVA Balanced Growth Portfolio

Class449 Scotia INNOVA Growth Portfolio Class454 Scotia INNOVA Maximum Growth Portfolio

Class458 Scotia Partners Balanced Income Portfolio Class462 Scotia Partners Balanced Growth Portfolio Class466 Scotia Partners Growth Portfolio Class470 Scotia Partners Maximum Growth Portfolio

Class

474 Notes to the Financial Statements

497 Management’s Responsibility forFinancial Reporting

Economic & Financial Market OutlookJean-François PerraultSVP and Chief EconomistScotiabank

Firing on More Cylinders

• Sources of global growth are strengtheningand diversifying, both within countries andacross regions.

• The strength of demand is leading to are-assessment of monetary policy prospects in anumber of countries, with the possibility thatadditional central banks will soon follow theUS Fed and the Bank of Canada by beginning towithdraw exceptional stimulus.

Global momentum remains strong, despite occasionallyweak data in some countries. Growth is so solid, in fact,that the market’s focus is now on determining whichcentral banks will follow the Federal Reserve and tighteninterest rates next: the Bank of Canada raised itsovernight rate for the first time in nearly 7 years inJuly 2017. The European Central Bank (ECB) is likely tofollow with a tightening in its policy stance. Thewithdrawal of monetary stimulus, when it occurs, is likelyto be of material consequence to financial markets. Wehave already seen sharp movements in currencies andbond markets in the countries where central bankershave adopted more hawkish language. While there is, ofcourse, the possibility of increased volatility as marketsdigest the potential for reduced central bank support, weconsider this shift in stance from central bankers to bevery good news: it signals that the economic recovery isnow, at long last, self-sustaining, and far less reliant onexceptional policy support.

Other threats to the outlook are mixed. It now appearsclear that the United States (US) will seek to modernizeNAFTA instead of ripping it up. The US is, however, nowalso considering other tariffs with the potential to triggersignificant retaliatory actions that could develop into atrade war. Political developments also loom large in LatinAmerica and concerns about conflict in the KoreanPeninsula remain heightened. Economic risks are,meanwhile, diminishing as the increasingly broad-basednature of activity in most advanced economies reducesthe reliance on households and policy support to drivegrowth.

In Canada, GDP growth stormed ahead to anunexpectedly quick pace of 3.7% q/q in Q1. Economicactivity continued to be led in a lopsided fashion byconsumer demand and residential investment, but Q1also provided some tentative evidence of a strong

pick-up in business investment. This incipient broadeningof the sources of private-sector growth at the same timeas public infrastructure spending is set to move aheadunderpins another mark-up in our growth projections for2017 to 2.7%, roughly double the Bank of Canada’sestimate of Canada’s potential. If realized, this would bethe highest annual growth rate since 2011’s 3.1% and itwould make Canada one of the fastest-growingcountries in the industrialized world. Some of thisdemand is likely being pulled ahead from future periodsand we anticipate a marked deceleration to 1.9% nextyear which reflects our expectation that Canadianeconomic activity will continue its shift to a more durablemix of sources in the years ahead. The strength ofdemand, as well as much more positive commentaryfrom the Bank of Canada on the state of the economy,lead us to believe that the Bank of Canada will continueto raise interest rates, with other increases in the fourthquarter of the year and the first of next year.

As the US economy heads into the eighth year of what isnow its third-longest expansion, the fundamentals forcontinued solid growth remain in place, though any slackin the economy is rapidly closing with the economy at fullemployment. Our outlook is changed only modestly fromthree months ago. We have removed nearly all of thevery limited additional fiscal stimulus that we hadprogrammed in 2017 and 2018 based on our currentexpectation that virtually no meaningful tax reform orexpanded infrastructure spending is likely to beimplemented by the US federal government over the next18 months. At the same time, a variety of material risksto the US outlook have abated: the USD has weakened,bond yields are lower than expected, financial conditionshave materially eased, oil prices are lower than previouslyprojected, and trade policy risks are proving to be morebark than bite, thereby generating less of a drag thanexpected on investment. Taking all of these factors intoaccount, our projections for US growth have been shavedonly slightly to 2.1% in 2017 and 2.2% in 2018. Growthcontinues to be driven by support from a strong labourmarket, rising consumption, recovering capex, and aslightly better external picture, all of which shouldcompensate for a relatively soft Q1. Owing to the stillstrong recovery, and what we perceive to be a hawkishbias at the Fed, we project one more rate rise this year inDecember followed by two more in 2018.

1

In Latin America, economic performance is likely to beheavily affected by politics. In Mexico, progress on theNAFTA negotiations and the 2018 elections will togetherhave a disproportionate impact on economicdevelopments. The country has opened up importantinvestment opportunities through structural reforms, butif the President elected in July 2018 does not plan tofollow through on them then important opportunitiescould be lost and growth would suffer. In Chile, we haveseen a material slowdown in the economy in theaftermath of the copper price correction, but some of thedrag has been domestically generated. The country alsosaw investment decline owing to cost inflation, partiallydriven by regulation, a tax reform that increasedcorporate taxes by 25%, and the elimination of some taxbreaks that previously shielded investments. With thepresidential election scheduled for November 2017, wecould see both positive and negative changes to thecountry’s growth outlook: major electoral platformsremain in flux. In Colombia, presidential elections arescheduled for May 2018, and although it’s still not clearwho the candidates will be, it’s possible that the votecould have implications for the peace efforts betweenthe government and the guerrillas, as well as broadereffects on policy. In Peru, the government’s position inthe legislature is very weak, which has made reformdifficult and even complicated the more basicadministration of government and the execution ofinfrastructure projects. If the government cannot changethe country’s political dynamics, whether through acabinet reshuffle or another strategy, economic growth islikely to slow owing to weak execution of publicspending and low private-sector confidence. In Brazil,the fate of the current government’s reform campaign,including revisions to the pension system, will determinewhether the country is able to maintain investorconfidence in both its public debt and in newinvestments in real assets. Brazilian balance sheets, bothin the public and private sectors, remain stretched, somaintaining foreign support is important if the economicrebound is to gain steam.

In the Eurozone, survey indicators are extremely strong;they imply that GDP growth should continue toaccelerate throughout 2017 which could translate intoan annual average growth rate of 2.25 to 2.5%. Yet,both the consensus and the ECB expect growth of 2% y/y or lower. This cautious outlook may reflect scepticismthat the elevated survey readings will actually filterthrough into the hard activity data, particularly in thecontext of the stop-start nature of the eurozone recoverythus far. We are more glass-half-full and forecast anannual average growth rate of 2.2% y/y, twice thegrowth of potential output, marking an extremely strongperformance for the currency area.

The outlook for the UK has softened since earlier in theyear. In particular, Q1 GDP was much weaker thanexpected (at just 0.2% q/q) and forward-lookingindicators imply that growth is unlikely to be any betterover the remainder of the year. Indeed, the factors thatcaused GDP growth to slow by so much during Q1 areintensifying, which implies that the headwinds to growthwill build as the year progresses.

China’s economy is showing early signs that growth isdecelerating again after a period of stimulus-inducedstrength. Over the past few quarters, economic activityhas been underpinned by massive public outlays in fixedassets, particularly in infrastructure. The slowdown isbecoming evident in the industrial sector, as implied bysomewhat softer data on high-frequency indicators suchas steel output, electricity production, and businessconfidence. We expect that the Chinese government willcontinue its sizeable fiscal injections to keep theeconomy’s growth trajectory in line with requirementsfor social harmony. China is well positioned to meet theofficial growth target of “around 6.5%” in 2017; weexpect output to expand by 6.7% this year. In 2018, theeconomy will likely continue its transition toward a moresustainable growth trajectory, with real GDP expected toadvance by 6.3% y/y.

2

Scotia T-Bill Fund (Unaudited)

STATEMENTS OF FINANCIAL POSITIONAs at

(in dollars)June 30,

2017December 31,

2016

ASSETSCurrent assetsInvestments

Non-derivative financial assets 37,180,793 40,552,568Cash 204,114 28,664Subscriptions receivable 11,864 53,437Accrued investment income and other 2,077 1,401

37,398,848 40,636,070

LIABILITIESCurrent liabilitiesManagement fee payable 19,802 –Redemptions payable 11,840 7,768Accrued expenses – 1,889Distributions payable 46 5

31,688 9,662

Net assets attributable to holders of redeemable units 37,367,160 40,626,408

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLEUNITS PER SERIES

Series A 37,367,160 40,626,408

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLEUNITS PER UNIT

Series A 10.00 10.00

STATEMENTS OF COMPREHENSIVE INCOMEFor the periods ended June 30 (note 1),

(in dollars except average units) 2017 2016

INCOMENet gain (loss) on investments

Interest for distribution purposes 128,370 140,369

Net gain (loss) on investments 128,370 140,369Securities lending (note 11) 1,786 328

Total income (loss), net 130,156 140,697

EXPENSESManagement fees (note 5) 193,623 229,870Independent Review Committee fees 576 563Audit fees 5,152 491Custodian fees 597 732Filing fees 9,415 9,501Legal fees 73 79Unitholder administration costs 38,450 43,715Unitholder reporting costs 7,003 8,187Other fund costs 4 8Harmonized Sales Tax/Goods and Services Tax 15,754 16,815

Total expenses 270,647 309,961Expenses absorbed by the Manager (161,759) (190,106)

Net expenses 108,888 119,855

Increase (decrease) in net assets attributable to holders of redeemableunits from operations 21,268 20,842

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS FROM OPERATIONS PER SERIES

Series A 21,268 20,842

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS FROM OPERATIONS PER UNIT†

Series A 0.01 0.00

WEIGHTED AVERAGE NUMBER OF UNITS PER SERIESSeries A 3,948,233 4,622,657

† The increase (decrease) in net assets attributable to holders of redeemable units fromoperations per unit is calculated by dividing the increase (decrease) in net assetsattributable to holders of redeemable units from operations per series by the weightedaverage number of units per series.

STATEMENTS OF CHANGES IN NET ASSETSATTRIBUTABLE TO HOLDERS OFREDEEMABLE UNITSFor the periods ended June 30 (note 1),

(in dollars) 2017 2016

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS,BEGINNING OF PERIOD

Series A 40,626,408 48,579,634

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS FROM OPERATIONS

Series A 21,268 20,842

DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITSFrom net investment income

Series A (21,268) (20,842)

REDEEMABLE UNIT TRANSACTIONSProceeds from issue

Series A 3,363,044 3,500,067Reinvested distributions

Series A 21,053 20,658Payments on redemption

Series A (6,643,345) (7,365,446)

(3,259,248) (3,844,721)

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS

Series A (3,259,248) (3,844,721)

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS,END OF PERIOD

Series A 37,367,160 44,734,913

STATEMENTS OF CASH FLOWSFor the periods ended June 30 (note 1),


CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in net assets attributable to holders of

redeemable units 21,268 20,842Adjustments for:

Purchases of portfolio investments (54,058,747) (52,302,021)Proceeds from sale of portfolio investments 57,430,522 56,164,030Accrued investment income and other (676) 1,456Accrued expenses and other payables 17,913 23,827

Net cash provided by (used in) operating activities 3,410,280 3,908,134CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 3,404,617 3,500,067Amounts paid on redemption of redeemable units (6,639,273) (7,365,446)Distributions to unitholders of redeemable units (174) (191)

Net cash provided by (used in) financing activities (3,234,830) (3,865,570)Net increase (decrease) in cash 175,450 42,564Cash (bank overdraft), beginning of period 28,664 85,433

CASH (BANK OVERDRAFT), END OF PERIOD 204,114 127,997

Interest received(1) 127,694 142,355

(1) Classified as operating items.

The accompanying notes are an integral part of the financial statements.

3

Scotia T-Bill Fund (Unaudited – Continued)

SCHEDULE OF INVESTMENT PORTFOLIOAs at June 30, 2017

IssuerFace

Value ($)AverageCost ($)

CarryingValue ($)

MONEY MARKET INSTRUMENTS – 99.5%Short Term Bonds – 47.0%Canada Housing Trust No. 1 (Floating Rate) 1.01% Sep 15, 2017 8,200,000 8,225,092 8,207,012Ontario Hydro Corporation Coupon Strip 0.00% Apr 15, 2018 500,000 496,020 496,074Province of Manitoba (Floating Rate) 1.14% Apr 02, 2018 1,000,000 1,002,940 1,003,946Province of Manitoba 4.70% Sep 22, 2017 1,690,000 1,745,314 1,726,686Province of Nova Scotia 1.12% Aug 15, 2018 3,200,000 3,208,928 3,212,307Province of Ontario (Floating Rate) 1.16% Nov 23, 2017 2,900,000 2,909,889 2,908,178

17,588,183 17,554,203

Treasury Bills – 52.5%Government of Canada 0.00% Aug 10, 2017 5,500,000 5,496,150 5,496,333Government of Canada 0.00% Feb 08, 2018 3,585,000 3,566,585 3,571,841Government of Canada 0.00% Jul 13, 2017 3,145,000 3,141,132 3,144,448Government of Canada 0.00% Jul 27, 2017 3,400,000 3,394,084 3,398,696Government of Canada 0.00% Sep 21, 2017 4,020,000 4,008,181 4,015,272

19,606,132 19,626,590

TOTAL INVESTMENT PORTFOLIO 37,194,315 37,180,793

OTHER ASSETS, LESS LIABILITIES – 0.5% 186,367

NET ASSETS – 100.0% 37,367,160

Instruments with a 0.00% stated interest rate are purchased at a discount to face value. Thediscount represents the implied effective interest.


4

Scotia T-Bill Fund (Unaudited – Continued)

FUND SPECIFIC NOTESFor the periods indicated in Note 1

The Fund (note 1)

The Fund’s objective is to provide income and liquidity, whilemaintaining a high level of safety. It invests primarily in Government ofCanada treasury bills and other short-term debt instrumentsguaranteed by the Government of Canada.

Risks associated with financial instruments (note 4)

Interest rate risk

The table below summarizes the Fund’s exposure to interest rate riskby the remaining term to maturity of the Fund’s portfolio, excludingcash and overdrafts, as applicable.

Interest rate exposureJune 30, 2017

($)December 31, 2016

($)

Less than 1 year 33,968,486 39,547,9561-3 years 3,212,307 1,004,6123-5 years – –5-10 years – –> 10 years – –

37,180,793 40,552,568

As at June 30, 2017, had the prevailing interest rates increased ordecreased by 0.25%, assuming a parallel shift in the yield curve and allother variables held constant, net assets attributable to holders ofredeemable units would have decreased or increased, respectively, by$18,617 or approximately 0.0% (December 31, 2016 – $19,937 orapproximately 0.0%).

Currency risk

The Fund did not have significant currency risk exposure as atJune 30, 2017 or December 31, 2016.

Price risk

The Fund did not have significant price risk exposure to equities,underlying funds, derivatives or commodities, if applicable, as atJune 30, 2017 and December 31, 2016.

Credit risk

The table below summarizes the credit ratings of bond and debenturesand money market instruments held by the Fund.

June 30, 2017 December 31, 2016

Credit ratings

Percentage of totalmoney market

instruments(%)

Percentageof netassets

(%)


instruments(%)


(%)

Short Term RatingA-1+ 52.8 52.5 48.7 48.7A-1 – – 7.5 7.4Bond Credit RatingAAA 22.1 22.0 22.2 22.2AA 8.6 8.6 8.0 8.0A 16.5 16.4 13.6 13.5

100.0 99.5 100.0 99.8

Concentration risk

Concentration risk arises as a result of the concentration of exposureswithin the same category, geographical location, asset type or industrysector, as applicable. The table below is a summary of the Fund’sconcentration risk:

Percentage of net assets (%)

June 30, 2017 December 31, 2016

Short Term Bonds 47.0 43.8Treasury Bills 52.5 56.0

Fair Value Classification (note 2)

The tables below illustrate the classification of the Fund’s financialinstruments within the fair value hierarchy.

June 30, 2017Level 1

($)Level 2

($)Level 3

($)Total($)

Bonds and debentures – 17,554,203 – 17,554,203Money market instruments – 19,626,590 – 19,626,590

– 37,180,793 – 37,180,793

December 31, 2016Level 1

($)Level 2

($)Level 3

($)Total($)


– 40,552,568 – 40,552,568

Transfers between levels

During the periods ended June 30, 2017 and December 31, 2016, therewere no significant transfers between Level 1 and Level 2.

Offsetting of financial assets and liabilities (note 2)

As at June 30, 2017 and December 31, 2016, the Fund did not enter intoany agreement whereby the financial instruments were eligible foroffset.

Interest in Underlying Funds (note 2)

The Fund did not hold any interest in Underlying Funds as at June 30,2017 or December 31, 2016.

Comparison of net asset value per unit and net assets per unit(note 2)

As at June 30, 2017 or December 31, 2016, there were no differencesbetween the net asset value per unit and the net assets per unit for anyseries of the Fund.


5

Scotia Premium T-Bill Fund (Unaudited)



2017December 31,

2016


Non-derivative financial assets 153,590,773 171,620,152Cash 117,880 57,385Subscriptions receivable 13,194 4,000Accrued investment income and other 37,107 5,864Receivable for management fees rebate 127 36,496

153,759,081 171,723,897

LIABILITIESCurrent liabilitiesManagement fee payable 76,148 7,656Redemptions payable – 14,656Accrued expenses 4,529 445Distributions payable – 2,375

80,677 25,132



Series A 153,678,404 171,698,765


Series A 10.00 10.00





Net gain (loss) on investments 523,877 550,456Securities lending (note 11) 8,908 2,652


EXPENSESManagement fees (note 5) 249,872 275,295Independent Review Committee fees 576 563Audit fees 5,154 1,949Custodian fees 1,819 2,052Filing fees 9,446 9,039Legal fees 300 313Unitholder administration costs 12,047 17,310Unitholder reporting costs 2,243 2,762Other fund costs 13 31Harmonized Sales Tax/Goods and Services Tax 27,522 45,045


Net expenses 282,410 290,162

Increase (decrease) in net assets attributable to holders ofredeemable units from operations 250,375 262,946


Series A 250,375 262,946


Series A 0.02 0.01

WEIGHTED AVERAGE NUMBER OF UNITS PER SERIESSeries A 15,977,260 18,321,854




NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLEUNITS, BEGINNING OF PERIOD

Series A 171,698,765 191,138,128

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS FROM OPERATIONS

Series A 250,375 262,946


Series A (250,377) (262,947)


Series A 12,122,500 16,682,474Reinvested distributions

Series A 267,836 262,947Payments on redemption

Series A (30,410,695) (28,045,432)

(18,020,359) (11,100,011)

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS

Series A (18,020,361) (11,100,012)

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLEUNITS, END OF PERIOD

Series A 153,678,404 180,038,116





Purchases of portfolio investments (232,468,139) (227,802,594)Proceeds from sale of portfolio investments 250,497,518 238,946,635Accrued investment income and other (31,243) (25,199)Accrued expenses and other payables 72,576 94,819Receivable for management fees rebate 36,369 40,603

Net cash provided by (used in) operating activities 18,357,456 11,517,210CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 12,113,306 16,682,474Amounts paid on redemption of redeemable units (30,425,351) (28,045,432)Distributions to unitholders of redeemable units 15,084 (2,913)



Interest received(1) 492,634 552,070



6

Scotia Premium T-Bill Fund (Unaudited – Continued)


IssuerFace


CarryingValue ($)

BONDS AND DEBENTURES – 47.4%Short Term Bonds – 23.1%Ontario Hydro Corporation Coupon Strip 0.00% Apr 15, 2018 2,100,000 2,083,284 2,083,510Canada Housing Trust No. 1 (Floating Rate) 1.01% Sep 15, 2017 33,400,000 33,502,122 33,428,783

35,585,406 35,512,293

Provincial Bonds – 24.2%Province of Manitoba (Floating Rate) 1.14% Apr 02, 2018 4,100,000 4,112,054 4,116,177Province of Manitoba 4.70% Sep 22, 2017 7,250,000 7,487,293 7,407,382Province of Nova Scotia 1.12% Aug 15, 2018 13,500,000 13,537,665 13,551,920Province of Ontario (Floating Rate) 1.16% Nov 23, 2017 12,100,000 12,141,261 12,134,121

37,278,273 37,209,600

TOTAL BONDS AND DEBENTURES 72,863,679 72,721,893

MONEY MARKET INSTRUMENTS – 52.6%Treasury Bills – 52.6%Government of Canada 0.00% Aug 10, 2017 23,700,000 23,683,409 23,684,202Government of Canada 0.00% Feb 08, 2018 14,600,000 14,524,934 14,546,398Government of Canada 0.00% Jul 13, 2017 12,495,000 12,479,979 12,492,822Government of Canada 0.00% Jul 27, 2017 13,685,000 13,662,950 13,679,844Government of Canada 0.00% Sep 21, 2017 16,485,000 16,436,534 16,465,614

80,787,806 80,868,880



NET ASSETS – 100.0% 153,678,404



7

Scotia Premium T-Bill Fund (Unaudited – Continued)


The Fund (note 1)

The Fund’s objective is to provide income and liquidity, whilemaintaining a high level of safety. It invests primarily in Government ofCanada treasury bills and other short-term debt instrumentsguaranteed by the Government of Canada.


Interest rate risk




($)


153,590,773 171,620,152


Currency risk


Price risk


Credit risk


June 30, 2017 December 31, 2016

Credit ratings


instruments(%)


(%)


instruments(%)


(%)

Short Term RatingA-1+ 52.7 52.6 50.2 50.2A-1 – – 8.3 8.3Bond Credit RatingAAA 21.8 21.8 21.4 21.4AA 8.8 8.8 8.2 8.2A 16.7 16.7 11.9 11.9

100.0 99.9 100.0 100.0

Concentration risk



June 30, 2017 December 31, 2016

Provincial Bonds 24.2 20.0Short Term Bonds 23.1 21.4Treasury Bills 52.6 58.6




($)Level 2

($)Level 3

($)Total($)


– 153,590,773 – 153,590,773


($)Level 2

($)Level 3

($)Total($)


– 171,620,152 – 171,620,152










8

Scotia Money Market Fund (Unaudited)



2017December 31,

2016


Non-derivative financial assets 1,191,900,933 1,351,378,989Cash 101,716 3,567Subscriptions receivable 4,643,720 4,345,847Accrued investment income and other 87,778 84,174

1,196,734,147 1,355,812,577

LIABILITIESCurrent liabilitiesManagement fee payable 188,912 –Redemptions payable 9,150,337 2,861,427Accrued expenses 10,054 20,544Distributions payable 2,921 4,449

9,352,224 2,886,420

Net assets attributable to holders of redeemable units 1,187,381,923 1,352,926,157


Series A 209,718,508 218,470,612Advisor Series 288,202 450,468Series K 1,202,464 1,004Series M 898,834,709 1,038,195,157Premium Series 77,338,040 95,808,916


Series A 10.00 10.00Advisor Series 10.00 10.00Series K 10.00 10.00Series M 10.00 10.00Premium Series 10.00 10.00




Interest for distribution purposes 6,614,735 8,016,891

Net gain (loss) on investments 6,614,735 8,016,891Securities lending (note 11) 5,677 9,870

Total income (loss), net 6,620,412 8,026,761

EXPENSESManagement fees (note 5) 1,353,577 1,949,996Independent Review Committee fees 576 563Interest expense and bank overdraft charges 1,247 60Audit fees 5,059 16,913Custodian fees 16,680 15,648Filing fees 23,693 28,168Legal fees 2,454 2,731Unitholder administration costs 159,561 216,100Unitholder reporting costs 16,332 19,771Other fund costs 102 280Harmonized Sales Tax/Goods and Services Tax 110,872 153,807

Total expenses 1,690,153 2,404,037Expenses absorbed by the Manager (535,004) (713,309)

Net expenses 1,155,149 1,690,728

Increase (decrease) in net assets attributable to holders ofredeemable units from operations 5,465,263 6,336,033

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS FROM OPERATIONS PERSERIES

Series A 323,798 439,399Advisor Series 527 908Series K 2,967 –Series M 4,850,788 5,150,399Premium Series 287,183 745,327

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS FROM OPERATIONS PERUNIT†

Series A 0.01 0.02Advisor Series 0.01 0.01Series K 0.05 –Series M 0.05 0.05Premium Series 0.03 0.03

WEIGHTED AVERAGE NUMBER OF UNITS PER SERIESSeries A 21,658,871 29,258,999Advisor Series 35,453 61,074Series K 59,031 –Series M 100,485,422 107,845,975Premium Series 8,564,484 22,176,356



9

Scotia Money Market Fund (Unaudited – Continued)




Series A 218,470,612 311,337,658Advisor Series 450,468 676,361Series K 1,004Series M 1,038,195,157 1,038,899,571Premium Series 95,808,916 202,043,990

1,352,926,157 1,552,957,580


Series A 323,798 439,399Advisor Series 527 908Series K 2,967 –Series M 4,850,788 5,150,399Premium Series 287,183 745,327

5,465,263 6,336,033


Series A (323,798) (439,385)Advisor Series (527) (908)Series K (2,967) –Series M (4,850,786) (5,150,410)Premium Series (287,182) (745,323)

(5,465,260) (6,336,026)


Series A 67,588,396 69,272,789Series K 1,209,454 –Series M 1,012,628,323 1,092,855,556Premium Series 13,067 92,339,255

Reinvested distributionsSeries A 317,956 432,646Advisor Series 527 908Series K 2,967 –Series M 4,810,210 5,099,371Premium Series 278,394 731,873

Payments on redemptionSeries A (76,658,456) (103,366,221)Advisor Series (162,793) (126,854)Series K (10,961) –Series M (1,156,798,983) (1,218,242,987)Premium Series (18,762,338) (68,555,889)

(165,544,237) (129,559,553)


Series A (8,752,104) (33,660,772)Advisor Series (162,266) (125,946)Series K 1,201,460 –Series M (139,360,448) (120,288,071)Premium Series (18,470,876) 24,515,243

(165,544,234) (129,559,546)


Series A 209,718,508 277,676,886Advisor Series 288,202 550,415Series K 1,202,464 –Series M 898,834,709 918,611,500Premium Series 77,338,040 226,559,233

1,187,381,923 1,423,398,034




redeemable units 5,465,263 6,336,033Adjustments for:

Purchases of portfolio investments (3,442,092,064) (5,810,663,622)Proceeds from sale of portfolio investments 3,601,570,120 5,939,933,493Accrued investment income and other (3,604) 37,381Accrued expenses and other payables 178,422 303,726

Net cash provided by (used in) operating activities 165,118,137 135,947,011CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 1,081,141,367 1,254,467,601Amounts paid on redemption of redeemable units (1,246,104,620) (1,390,291,951)Distributions to unitholders of redeemable units (56,735) (69,098)



Interest paid(1) 1,247 60Interest received(1) 6,611,131 8,779,216



10



IssuerFace


CarryingValue ($)

MONEY MARKET INSTRUMENTS – 100.5%Short-Term Bonds – 59.1%Bank of Montreal (Floating Rate) 1.33% Dec 21, 2017 30,700,000 30,767,305 30,755,766Bank of Montreal (Floating Rate) 1.47% Mar 29, 2018 27,393,000 27,516,854 27,486,866Bank of Nova Scotia, The (Floating Rate) 1.13% Oct 11, 2017 8,000,000 8,006,560 8,006,820Bank of Nova Scotia, The (Floating Rate) 1.52% Apr 20, 2018 22,958,000 23,054,839 23,075,174Bank of Nova Scotia, The 2.24% Mar 22, 2018 7,000,000 7,065,520 7,103,127Bank of Nova Scotia, The 2.37% Jan 11, 2018 20,000,000 20,231,800 20,349,989BMW Canada Inc. 2.39% Nov 27, 2017 24,217,000 24,496,542 24,407,001Caisse Centrale Desjardins 3.50% Oct 05, 2017 32,805,000 33,578,350 33,285,260Canadian Imperial Bank of Commerce (Floating Rate) 1.56%Feb 08, 2018 59,300,000 59,300,000 59,433,232City of Toronto 4.95% Jun 27, 2018 10,000,000 10,386,200 10,386,025City of Toronto 5.05% Jul 18, 2017 21,761,000 22,008,425 22,299,951City of Toronto 6.10% Dec 12, 2017 1,411,000 1,460,470 1,448,344City of Vancouver 4.70% Dec 01, 2017 12,314,000 12,672,158 12,553,497GE Capital Canada Funding Company 5.53% Aug 17, 2017 34,000,000 35,255,760 34,891,100Greater Toronto Airports Authority 5.26% Apr 17, 2018 25,418,000 26,445,034 26,546,353Honda Canada Finance Inc. 2.28% Dec 11, 2017 22,111,000 22,354,365 22,257,796HSBC Bank of Canada 3.56% Oct 04, 2017 13,673,000 13,918,022 13,877,018John Deere Canada Funding Inc. 2.25% Oct 18, 2017 24,838,000 25,075,303 25,041,486John Deere Canada Funding Inc. 2.30% Jan 17, 2018 8,507,000 8,605,290 8,658,447Lower Mattagami Energy LP 2.23% Oct 23, 2017 35,157,000 35,533,679 35,436,078Manulife Bank of Canada (Floating Rate) 1.51% Jun 01, 2018 35,000,000 35,012,023 35,047,999National Bank of Canada (Floating Rate) 1.39% Jun 14, 2018 24,797,000 24,878,037 24,872,474National Bank of Canada 2.69% Aug 21, 2017 14,449,000 14,665,913 14,620,148NAV Canada 1.95% Apr 19, 2018 31,796,767 32,096,518 32,165,171Royal Bank of Canada (Floating Rate) 1.02% Jul 30, 2018 57,000,000 57,000,000 57,014,266Toronto Hydro Corporation 5.15% Nov 14, 2017 27,349,000 28,455,297 27,945,664Toronto-Dominion Bank, The (Floating Rate) 1.49% Mar 28, 2018 57,000,000 56,999,998 57,005,040Toronto-Dominion Bank, The 2.43% Aug 15, 2017 2,300,000 2,329,256 2,324,817Toyota Credit Canada Inc. 2.20% Oct 19, 2017 2,870,000 2,892,192 2,892,932

702,061,710 701,187,841

Bankers’ Acceptances – 2.3%HSBC Bank of Canada 0.00% Aug 08, 2017 2,460,000 2,454,982 2,457,928HSBC Bank of Canada 0.00% Aug 25, 2017 350,000 348,499 349,512HSBC Bank of Canada 0.00% Sep 13, 2017 2,600,000 2,595,138 2,595,957HSBC Bank of Canada 0.00% Sep 29, 2017 2,000,000 1,995,160 1,996,111National Bank of Canada 0.00% Aug 14, 2017 9,400,000 9,382,422 9,391,501National Bank of Canada 0.00% Aug 15, 2017 10,350,000 10,330,439 10,340,432

27,106,640 27,131,441

Bearers’ Deposit Notes – 0.7%HSBC Bank of Canada 0.00% Sep 08, 2017 8,000,000 7,985,200 7,988,395

Commercial Paper – 33.4%Canadian Utilities Limited 0.00% Aug 02, 2017 30,000,000 29,970,000 29,977,143Enbridge Gas Distribution Inc. 0.00% Jul 12, 2017 7,600,000 7,596,048 7,598,110Enbridge Gas Distribution Inc. 0.00% Jul 19, 2017 15,000,000 14,989,950 14,993,970Enbridge Gas Distribution Inc. 0.00% Jul 21, 2017 5,000,000 4,996,510 4,997,679Enbridge Gas Distribution Inc. 0.00% Jul 25, 2017 4,410,000 4,406,957 4,407,295Enbridge Pipelines Inc. 0.00% Jul 12, 2017 11,530,000 11,526,772 11,527,041Enbridge Pipelines Inc. 0.00% Jul 19, 2017 3,295,000 3,293,272 3,293,616Enbridge Pipelines Inc. 0.00% Jul 20, 2017 4,950,000 4,947,173 4,947,808FortisBC Energy Inc. 0.00% Aug 01, 2017 10,000,000 9,992,100 9,992,579FortisBC Energy Inc. 0.00% Aug 02, 2017 4,900,000 4,890,268 4,896,629FortisBC Energy Inc. 0.00% Aug 31, 2017 4,450,000 4,442,880 4,443,106FortisBC Energy Inc. 0.00% Jul 26, 2017 4,000,000 3,992,400 3,997,865Greater Toronto Airports Authority 0.00% Jul 19, 2017 7,500,000 7,494,675 7,497,181Honda Canada Finance Inc. 0.00% Apr 03, 2018 11,000,000 10,883,730 10,911,107Husky Energy Inc. 0.00% Aug 03, 2017 5,800,000 5,787,704 5,795,282Husky Energy Inc. 0.00% Sep 01, 2017 4,300,000 4,290,884 4,293,428Husky Energy Inc. 0.00% Sep 15, 2017 23,000,000 22,950,090 22,956,896Imperial Oil Ltd. 0.00% Jul 13, 2017 27,000,000 26,992,170 26,993,289Inter Pipeline Ltd. 0.00% Jul 13, 2017 2,000,000 1,996,840 1,999,417Inter Pipeline Ltd. 0.00% Sep 07, 2017 3,350,000 3,342,597 3,344,468Inter Pipeline Ltd. 0.00% Sep 12, 2017 5,000,000 4,988,800 4,991,113

IssuerFace


CarryingValue ($)

MONEY MARKET INSTRUMENTS (cont'd)Commercial Paper (cont'd)Inter Pipeline Ltd. 0.00% Sep 14, 2017 8,500,000 8,481,385 8,483,953Inter Pipeline Ltd. 0.00% Sep 19, 2017 13,500,000 13,469,085 13,472,822Nestle Capital Canada Ltd. 0.00% Aug 01, 2017 4,000,000 3,996,520 3,997,965Nestle Capital Canada Ltd. 0.00% Aug 03, 2017 5,000,000 4,995,850 4,997,205Nova Scotia Power Inc. 0.00% Jul 11, 2017 2,300,000 2,298,298 2,299,484Nova Scotia Power Inc. 0.00% Jul 12, 2017 4,000,000 3,997,040 3,999,013Nova Scotia Power Inc. 0.00% Jul 17, 2017 6,500,000 6,495,190 6,497,668Nova Scotia Power Inc. 0.00% Jul 26, 2017 10,300,000 10,292,584 10,293,820Nova Scotia Power Inc. 0.00% Jul 27, 2017 8,700,000 8,693,475 8,694,527Omers Finance Trust 0.00% Aug 01, 2017 3,000,000 2,993,880 2,997,938Omers Finance Trust 0.00% Sep 01, 2017 4,000,000 3,992,320 3,994,767Omers Finance Trust 0.00% Sep 05, 2017 15,700,000 15,669,542 15,678,150Omers Finance Trust 0.00% Sep 06, 2017 19,800,000 19,762,380 19,771,994Omers Finance Trust 0.00% Sep 18, 2017 16,900,000 16,867,214 16,871,537Ontario Teachers Financial Trust 0.00% Aug 25, 2017 100,000 99,615 99,875Ontario Teachers Financial Trust 0.00% Dec 08, 2017 3,000,000 2,988,540 2,989,925Ontario Teachers Financial Trust 0.00% Nov 29, 2017 10,100,000 10,061,317 10,067,549Ontario Teachers Financial Trust 0.00% Sep 01, 2017 41,000,000 40,828,210 40,941,798Ontario Teachers Financial Trust 0.00% Sep 05, 2017 4,700,000 4,681,803 4,693,061Toyota Credit Canada Inc. 0.00% Dec 15, 2017 9,175,000 9,114,170 9,136,227Toyota Credit Canada Inc. 0.00% Jan 04, 2018 13,000,000 12,911,300 12,937,152

396,461,538 396,771,452

Promissory Notes – 2.8%Province of Alberta 0.00% Jul 17, 2017 26,190,000 26,177,953 26,183,968Province of Alberta 0.00% Jul 26, 2017 5,000,000 4,997,250 4,998,090Province of Saskatchewan 0.00% Aug 04, 2017 2,100,000 2,098,572 2,098,921

33,273,775 33,280,979

Treasury Bills – 2.2%Province of New Brunswick 0.00% Jul 18, 2017 1,075,000 1,074,484 1,074,726Province of Newfoundland and Labrador 0.00% Aug 03, 2017 11,000,000 10,992,740 10,994,555Province of Newfoundland and Labrador 0.00% Jul 20, 2017 10,745,000 10,739,672 10,741,995Province of Ontario 0.00% Jul 12, 2017 2,730,000 2,728,853 2,729,549

25,535,749 25,540,825

TOTAL INVESTMENT PORTFOLIO 1,192,424,612 1,191,900,933

OTHER ASSETS, LESS LIABILITIES – (0.5%) (4,519,010)

NET ASSETS – 100.0% 1,187,381,923



11



The Fund (note 1)

The Fund’s objective is to provide income and liquidity, whilemaintaining a high level of safety. It invests primarily in high quality,short-term fixed income securities issued by Canadian federal,provincial and municipal governments, Canadian chartered banks andtrust companies, and corporations.


Interest rate risk




($)

Less than 1 year 1,134,886,667 1,154,939,6021-3 years 57,014,266 196,439,3873-5 years – –5-10 years – –> 10 years – –

1,191,900,933 1,351,378,989


Currency risk


Price risk


Credit risk


June 30, 2017 December 31, 2016

Credit ratings


instruments(%)


(%)


instruments(%)


(%)

Short Term RatingA-1+ 19.1 19.2 15.5 15.5A-1 22.0 22.0 18.5 18.5Bond Credit RatingAAA 1.1 1.1 9.8 9.8AA 35.9 36.3 32.8 32.8A 21.9 21.9 23.4 23.3

100.0 100.5 100.0 99.9

Concentration risk



June 30, 2017 December 31, 2016

Bankers’ Acceptances 2.3 2.9Bearers’ Deposit Notes 0.7 0.1Commercial Paper 33.4 29.4Promissory Notes 2.8 –Short Term Bonds 59.1 66.3Treasury Bills 2.2 1.2




($)Level 2

($)Level 3

($)Total($)


– 1,191,900,933 – 1,191,900,933


($)Level 2

($)Level 3

($)Total($)


– 1,351,378,989 – 1,351,378,989










12

Scotia U.S. $ Money Market Fund (Unaudited)



2017December 31,

2016U.S. $ U.S. $


Non-derivative financial assets 48,105,889 42,977,908Cash 101,545 71,255Subscriptions receivable 260,126 –Accrued investment income and other 178,986 177,732

48,646,546 43,226,895

LIABILITIESCurrent liabilitiesManagement fee payable 34,454 –Redemptions payable 76,015 84,715Accrued expenses – 3,440Distributions payable 133 52

110,602 88,207



Series A 34,460,057 39,293,860Series M 14,075,887 3,844,828


Series A 10.00 10.00Series M 10.00 10.00


(in dollars except average units) 2017 2016U.S. $ U.S. $



Net gain (loss) on investments 244,718 196,002Securities lending (note 11) 97 6


EXPENSESManagement fees (note 5) 184,405 310,499Independent Review Committee fees 576 563Interest expense and bank overdraft charges 28 –Audit fees 5,151 662Custodian fees 1,563 1,874Filing fees 1,186 9,468Legal fees 88 107Unitholder administration costs 10,322 12,276Unitholder reporting costs 2,408 2,944Other fund costs 4 14Harmonized Sales Tax/Goods and Services Tax 16,562 16,276


Net expenses 181,128 180,250

Increase (decrease) in net assets attributable to holders of redeemableunits from operations 63,687 15,758


Series A 10,533 15,758Series M 53,154 –


Series A 0.00 0.00Series M 0.05 –

WEIGHTED AVERAGE NUMBER OF UNITS PER SERIESSeries A 3,687,275 6,244,116Series M 1,036,145 –



13

Scotia U.S. $ Money Market Fund (Unaudited – Continued)


(in dollars) 2017 2016U.S. $ U.S. $

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS,BEGINNING OF PERIOD

Series A 39,293,860 61,769,026Series M 3,844,828 –

43,138,688 61,769,026


Series A 10,533 15,758Series M 53,154 –

63,687 15,758


Series A (10,532) (15,759)Series M (53,154) –

(63,686) (15,759)


Series A 3,020,109 21,505,051Series M 18,922,719 –

Reinvested distributionsSeries A 10,014 15,457Series M 52,821 –

Payments on redemptionSeries A (7,863,927) (25,025,621)Series M (8,744,481) –

5,397,255 (3,505,113)


Series A (4,833,803) (3,505,114)Series M 10,231,059 –

5,397,256 (3,505,114)

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS,END OF PERIOD

Series A 34,460,057 58,263,912Series M 14,075,887 –

48,535,944 58,263,912


(in dollars) 2017 2016U.S. $ U.S. $



Purchases of portfolio investments (153,679,762) (153,526,707)Proceeds from sale of portfolio investments 148,551,781 157,020,478Accrued investment income and other (1,254) (1,245)Accrued expenses and other payables 31,014 33,455

Net cash provided by (used in) operating activities (5,034,534) 3,541,739CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 21,682,702 21,505,051Amounts paid on redemption of redeemable units (16,617,108) (25,025,621)Distributions to unitholders of redeemable units (770) (316)

Net cash provided by (used in) financing activities 5,064,824 (3,520,886)Net increase (decrease) in cash 30,290 20,853Cash (bank overdraft), beginning of period 71,255 80,449


Interest paid(1) 28 –Interest received(1) 243,464 132,270



14



IssuerFace


CarryingValue ($)

U.S.$ U.S.$ U.S.$

BONDS AND DEBENTURES – 52.1%Short-Term Bonds – 39.4%American Honda Finance Corporation (Floating Rate) 1.05%Jul 14, 2017 202,000 202,159 202,575American Honda Finance Corporation (Floating Rate) 1.16%Dec 11, 2017 255,000 255,709 255,480American Honda Finance Corporation 1.20% Jul 14, 2017 435,000 435,555 437,433Bank of Montreal (Floating Rate) 0.88% Jul 14, 2017 300,000 299,103 300,869Bank of Montreal (Floating Rate) 1.50% Dec 08, 2017 1,600,000 1,605,504 1,604,725Bank of Nova Scotia (Floating Rate) 1.38% Nov 09, 2018 500,000 500,175 501,157Bank of Nova Scotia (Floating Rate) 1.54% Jul 18, 2018 1,400,000 1,404,662 1,408,480Caisse Centrale Desjardins 1.58% Sep 12, 2017 140,000 140,076 140,182Canadian Imperial Bank of Commerce (Floating Rate) 0.89%Aug 04, 2017 900,000 895,864 901,724Canadian Imperial Bank of Commerce (Floating Rate) 1.23%Feb 27, 2018 900,000 900,000 901,070Canadian Imperial Bank of Commerce (Floating Rate) 1.41%Jul 13, 2018 500,000 500,970 502,395Canadian National Railway Company (Floating Rate) 0.99%Nov 14, 2017 930,000 931,171 932,037Fédération des caisses Desjardins du Québec (Floating Rate) 1.70%Jan 29, 2018 1,400,000 1,405,460 1,408,547International Business Machines Corporation (Floating Rate) 1.25%Aug 18, 2017 950,000 953,844 952,371International Business Machines Corporation (Floating Rate) 1.37%Feb 06, 2018 200,000 200,414 200,731John Deere Capital Corporation (Floating Rate) 1.18% Dec 15, 2017 410,000 410,380 410,427John Deere Capital Corporation (Floating Rate) 1.33% Jul 11, 2017 630,000 631,442 632,328National Australia Bank Ltd. (Floating Rate) 1.79% Jul 23, 2018 440,000 442,552 443,925National Bank of Canada (Callable) 1.45% Nov 07, 2017 440,000 440,176 441,071National Bank of Canada (Floating Rate) 2.08% Dec 14, 2018 800,000 807,852 808,321Royal Bank of Canada (Floating Rate) 0.89% Oct 13, 2017 480,000 478,214 481,158Royal Bank of Canada (Floating Rate) 1.58% Jul 30, 2018 460,000 462,185 462,958Royal Bank of Canada (Floating Rate) 1.66% Mar 15, 2019 660,000 663,663 663,648Royal Bank of Canada (Floating Rate) 1.70% Mar 22, 2018 500,000 502,760 502,154Toronto-Dominion Bank, The (Floating Rate) 1.30% Aug 15, 2017 695,000 695,732 696,651Toronto-Dominion Bank, The (Floating Rate) 1.44% Apr 30, 2018 700,000 702,849 703,731Toronto-Dominion Bank, The (Floating Rate) 1.99% Jan 22, 2019 400,000 404,383 405,513Toyota Motor Credit Corporation (Floating Rate) 1.19% Jan 12, 2018 699,000 700,341 701,851Wells Fargo & Company (Floating Rate) 1.89% Jan 22, 2018 305,000 306,513 307,254Wells Fargo & Company 1.40% Sep 08, 2017 400,000 400,044 401,784Wells Fargo Bank NA (Floating Rate) 1.23% Sep 07, 2017 400,000 401,240 400,672

19,080,992 19,113,222

Provincial Bonds – 12.7%Province of Ontario 1.20% Feb 14, 2018 5,000,000 4,995,850 5,019,720Province of Ontario Canada 3.15% Dec 15, 2017 1,140,000 1,160,098 1,150,871

6,155,948 6,170,591

TOTAL BONDS AND DEBENTURES 25,236,940 25,283,813

MONEY MARKET INSTRUMENTS – 47.0%Commercial Paper – 39.5%Enbridge Pipelines Inc. 0.00% Jul 07, 2017 1,100,000 1,099,076 1,099,809Farm Credit Canada 0.00% Jul 31, 2017 15,470,000 15,449,867 15,456,593Hydro-Quebec 0.00% Jul 10, 2017 1,635,000 1,633,659 1,634,610Omers Finance Trust 0.00% Jul 18, 2017 1,000,000 997,100 999,464

19,179,702 19,190,476

IssuerFace


CarryingValue ($)

U.S.$ U.S.$ U.S.$

MONEY MARKET INSTRUMENTS (cont'd)Promissory Notes – 7.5%Province of British Columbia 0.00% Aug 11, 2017 2,835,000 2,830,379 2,831,842Province of British Columbia 0.00% Jul 12, 2017 800,000 799,736 799,758

3,630,115 3,631,600

TOTAL MONEY MARKET INSTRUMENTS 22,809,817 22,822,076



NET ASSETS – 100.0% 48,535,944



15



The Fund (note 1)

The Fund’s objective is to provide income and liquidity, whilemaintaining a high level of safety. It invests primarily in treasury billsand other money market instruments that are denominated in U.S.dollars and are issued by Canadian federal, provincial and municipalgovernments and corporations, and by supranational entities, such asthe World Bank.


Interest rate risk




($)


48,105,889 42,977,908


Currency risk


Price risk


Credit risk


June 30, 2017 December 31, 2016

Credit ratings


instruments(%)


(%)


instruments(%)


(%)

Short Term RatingA-1+ 45.3 44.8 43.5 43.3A-1 5.6 5.6 2.5 2.5

Bond Credit RatingAA 12.4 12.3 24.6 24.5A 29.4 29.2 29.4 29.3NOT RATED 7.3 7.2 – –

100.0 99.1 100.0 99.6

Concentration risk



June 30, 2017 December 31, 2016

Commercial Paper 39.5 25.0Promissory Notes 7.5 3.7Provincial Bonds 12.7 12.7Short Term Bonds 39.4 49.6Treasury Bills – 8.6




($)Level 2

($)Level 3

($)Total($)


– 48,105,889 – 48,105,889


($)Level 2

($)Level 3

($)Total($)


– 42,977,908 – 42,977,908










16

Scotia Short Term Bond Fund (Unaudited)



2017December

31, 2016


Non-derivative financial assets 375,038,142 390,125,243Cash 470,872 3,010,606Subscriptions receivable 886,648 822,506Accrued investment income and other 1,019,354 1,175,607

377,415,016 395,133,962

LIABILITIESCurrent liabilitiesManagement fee payable 23,493 –Redemptions payable 1,014,736 947,429Accrued expenses 11,830 1,197Distributions payable 32,952 –

1,083,011 948,626



Series I 1,395,379 1,514,068Series K 11,962,219 4,502,047Series M 362,974,407 388,169,221


Series I 9.75 9.83Series K 9.79 9.90Series M 9.70 9.77




Interest for distribution purposes 4,331,781 3,674,016Net realized gain (loss) on non-derivative financial assets 352,265 274,182Change in unrealized gain (loss) on non-derivative financial

assets (3,129,096) 946,480



EXPENSESManagement fees (note 5) 130,995 131,150Fixed administration fees (note 6) 60,821 56,456Independent Review Committee fees 576 563Other fund costs – 67Harmonized Sales Tax/Goods and Services Tax 21,662 21,226

Total expenses 214,054 209,462



Series I 5,211 21,666Series K (48,787) –Series M 1,398,103 4,670,833


Series I 0.04 0.13Series K (0.06) –Series M 0.04 0.12

WEIGHTED AVERAGE NUMBER OF UNITS PER SERIESSeries I 147,790 168,403Series K 830,023 –Series M 38,571,149 38,261,504



17

Scotia Short Term Bond Fund (Unaudited – Continued)




Series I 1,514,068 1,567,103Series K 4,502,047 –Series M 388,169,221 350,726,382

394,185,336 352,293,485


Series I 5,211 21,666Series K (48,787) –Series M 1,398,103 4,670,833

1,354,527 4,692,499


Series I (16,743) (17,146)Series K (96,075) –Series M (4,218,424) (3,777,113)

(4,331,242) (3,794,259)


Series I 68,000 271,675Series K 7,874,653 –Series M 36,037,376 76,747,308

Reinvested distributionsSeries I 16,743 17,146Series K 96,075 –Series M 4,026,285 3,632,426

Payments on redemptionSeries I (191,900) (256,325)Series K (365,694) –Series M (62,438,154) (36,033,820)

(14,876,616) 44,378,410


Series I (118,689) 37,016Series K 7,460,172 –Series M (25,194,814) 45,239,634

(17,853,331) 45,276,650



376,332,005 397,570,135





Net realized (gain) loss on non-derivative financial assets (352,265) (274,182)Change in unrealized (gain) loss on non-derivative financial

assets 3,129,096 (946,480)Purchases of portfolio investments (329,944,404) (690,079,312)Proceeds from sale of portfolio investments 342,254,674 639,519,573Accrued investment income and other 156,253 (56,435)Accrued expenses and other payables 34,126 35,654

Net cash provided by (used in) operating activities 16,632,007 (47,108,683)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 43,915,887 75,219,921Amounts paid on redemption of redeemable units (62,928,441) (35,891,509)Distributions to unitholders of redeemable units (159,187) (123,433)

Net cash provided by (used in) financing activities (19,171,741) 39,204,979Net increase (decrease) in cash (2,539,734) (7,903,704)Cash (bank overdraft), beginning of period 3,010,606 11,453,528

CASH (BANK OVERDRAFT), END OF PERIOD 470,872 3,549,824

Interest received(1) 4,488,035 3,617,581



18



IssuerFace


CarryingValue ($)

BONDS AND DEBENTURES – 99.7%Corporate Bonds – 38.4%AltaGas Ltd. 4.07% Jun 01, 2020 3,000,000 3,219,960 3,156,410Bank of Montreal 1.88% Mar 31, 2021 10,000,000 9,999,500 9,972,382bcIMC Realty Corporation 2.79% Aug 02, 2018 7,500,000 7,745,400 7,605,585Bell Canada 3.25% Jun 17, 2020 5,000,000 5,220,150 5,182,020Canadian Imperial Bank of Commerce 1.90% Apr 26, 2021 10,100,000 10,094,748 10,081,585Daimler Canada Finance Inc. 2.27% Mar 26, 2018 5,000,000 5,078,550 5,030,432Enbridge Gas Distribution Inc. 4.04% Nov 23, 2020 5,000,000 5,449,800 5,354,718Ford Credit Canada Ltd. 2.58% May 10, 2021 5,000,000 5,000,000 4,995,104Fortified Trust 1.67% Jul 23, 2021 7,000,000 7,000,000 6,911,903Genesis Trust II 1.68% Sep 17, 2018 2,900,000 2,900,000 2,906,332Hydro One Inc. 4.40% Jun 01, 2020 5,000,000 5,619,400 5,374,116John Deere Canada Funding Inc. 2.05% Sep 17, 2020 5,000,000 4,996,700 5,018,238Manulife Bank of Canada 2.08% May 26, 2022 8,500,000 8,500,000 8,400,700Master Credit Card Trust II 2.72% Nov 21, 2018 3,040,000 3,040,000 3,090,807National Bank of Canada 2.40% Oct 28, 2019 4,810,000 4,866,125 4,885,563NAV Canada 5.30% Apr 17, 2019 3,571,000 4,051,050 3,798,865Nissan Canada Financial Services Inc. 1.58% Oct 07, 2019 5,000,000 5,000,000 4,972,479Rogers Communications Inc. 2.80% Mar 13, 2019 4,750,000 4,825,140 4,837,150Royal Bank of Canada 2.03% Mar 15, 2021 8,000,000 7,996,960 8,016,484Royal Bank of Canada 2.36% Sep 21, 2017 2,920,000 2,925,888 2,928,316Royal Bank of Canada 2.89% Oct 11, 2018 8,000,000 8,271,600 8,140,821Shaw Communications Inc. 5.50% Dec 07, 2020 5,000,000 5,658,750 5,525,988Toronto-Dominion Bank, The 1.99% Mar 23, 2022 10,000,000 10,000,000 9,957,740Toronto-Dominion Bank, The 2.43% Aug 15, 2017 5,000,000 5,100,450 5,008,741VW Credit Canada Inc. 2.45% Nov 14, 2017 3,330,000 3,324,073 3,342,928

145,884,244 144,495,407

Federal Bonds – 48.3%Canada Housing Trust No. 1 1.15% Dec 15, 2021 26,500,000 26,339,675 25,874,194Canada Housing Trust No. 1 1.75% Jun 15, 2018 78,850,000 79,758,328 79,392,824Canada Housing Trust No. 1 1.95% Jun 15, 2019 20,000,000 20,437,000 20,275,050Canada Housing Trust No. 1 2.35% Dec 15, 2018 30,000,000 30,830,700 30,514,325Government of Canada 3.25% Jun 01, 2021 23,800,000 26,027,680 25,556,583

183,393,383 181,612,976

Provincial Bonds – 13.0%Province of Ontario 4.20% Jun 02, 2020 30,000,000 32,915,550 32,282,459Province of Ontario Generic Coupon Strip 0.00% Jun 02, 2021 18,000,000 16,901,640 16,647,300

49,817,190 48,929,759


OTHER ASSETS, LESS LIABILITIES – 0.3% 1,293,863

NET ASSETS – 100.0% 376,332,005


19



The Fund (note 1)

The Fund’s objective is to provide regular interest income and modestcapital gains. It invests primarily in:

• bonds and treasury bills issued or guaranteed by Canadianfederal, provincial and municipal governments, any agency ofsuch governments and Canadian corporations

• money market instruments of Canadian issuers. These includecommercial paper, bankers’ acceptances, asset-backed ormortgage-backed securities and guaranteed investmentcertificates.


Interest rate risk

The table below summarizes the Fund’s exposure to interest rate riskby the remaining term to maturity of the Fund’s portfolio, excludingunderlying funds, preferred shares, cash and overdrafts, as applicable.



($)

Less than 1 year 95,703,241 13,596,1881-3 years 137,021,981 147,033,2663-5 years 142,312,920 229,495,7895-10 years – –> 10 years – –

375,038,142 390,125,243

As at June 30, 2017, had the prevailing interest rates increased ordecreased by 0.25%, assuming a parallel shift in the yield curve and allother variables held constant, net assets attributable to holders ofredeemable units would have decreased or increased, respectively, by$2,259,569 or approximately 0.6% (December 31, 2016 – $2,826,295 orapproximately 0.7%).

Currency risk


Price risk


Credit risk

The table below summarizes the credit ratings of bonds anddebentures, money market instruments and preferred shares held bythe Fund, as applicable.

June 30, 2017 December 31, 2016

Percentage oftotal credit rated

instruments(%)

Percentage ofnet assets

(%)

Percentage oftotal credit rated

instruments(%)

Percentage ofnet assets

(%)

Credit ratingsAAA 51.9 51.7 40.7 40.2AA 21.9 21.8 21.8 21.5A 17.5 17.5 29.2 29.0BBB 8.7 8.7 8.3 8.3

100.0 99.7 100.0 99.0

Concentration risk



June 30, 2017 December 31, 2016

Corporate Bonds 38.4 41.1Federal Bonds 48.3 37.0Provincial Bonds 13.0 20.9




($)Level 2

($)Level 3

($)Total($)

Bonds and debentures – 375,038,142 – 375,038,142

– 375,038,142 – 375,038,142


($)Level 2

($)Level 3

($)Total($)

Bonds and debentures – 390,125,243 – 390,125,243

– 390,125,243 – 390,125,243










20

Scotia Private Short-Mid Government Bond Pool (Unaudited)



2017December 31,

2016


Non-derivative financial assets 933,757,857 1,246,757,201Unrealized gain on futures contracts – 957,600

Cash 18,344,978 27,709,343Margin deposited on derivatives – 4,997,428Subscriptions receivable 4,362,325 1,347,788Accrued investment income and other 2,092,716 2,937,062

958,557,876 1,284,706,422

LIABILITIESCurrent liabilitiesManagement fee payable 28,755 –Redemptions payable 1,268,683 1,247,254Accrued expenses 20,471 2,546Distributions payable 548,847 –

1,866,756 1,249,800

Net assets attributable to holders of redeemable units 956,691,120 1,283,456,622


Series I 484,535,240 454,425,468Series K 31,310,388 11,900,030Series M 440,845,492 817,131,124


Series I 10.37 10.45Series K 9.66 9.76Series M 10.37 10.45




Interest for distribution purposes 11,046,445 16,912,688Net realized gain (loss) on non-derivative financial assets (4,237,800) 13,078,125Net realized gain (loss) on futures contracts (1,041,988) (1,426,244)Change in unrealized gain (loss) on non-derivative financial

assets 663,855 (1,057,032)Change in unrealized gain (loss) on futures contracts (957,600) (1,481,978)



EXPENSESManagement fees (note 5) 193,426 291,426Fixed administration fees (note 6) 113,371 125,906Independent Review Committee fees 576 563Other fund costs – 221Harmonized Sales Tax/Goods and Services Tax 33,915 45,511Transaction costs 3,511 3,649

Total expenses 344,799 467,276



Series I 2,188,831 8,912,002Series K (83,932) –Series M 3,075,855 16,699,132


Series I 0.05 0.22Series K (0.04) –Series M 0.06 0.21

WEIGHTED AVERAGE NUMBER OF UNITS PER SERIESSeries I 45,124,441 40,298,581Series K 2,102,725 –Series M 52,970,722 78,687,322



21

Scotia Private Short-Mid Government Bond Pool (Unaudited – Continued)





1,283,456,622 1,257,028,471


Series I 2,188,831 8,912,002Series K (83,932) –Series M 3,075,855 16,699,132

5,180,754 25,611,134


Series I (6,178,508) (5,811,689)Series K (273,074) –Series M (6,790,785) (11,007,060)

(13,242,367) (16,818,749)



Reinvested distributionsSeries I 5,695,183 5,808,927Series K 273,074 –Series M 6,228,975 9,918,046

Payments on redemptionSeries I (4,555,822) (18,703,129)Series K (629,359) –Series M (420,452,295) (98,640,776)

(318,703,889) 18,210,936


Series I 30,109,772 4,370,811Series K 19,410,358 –Series M (376,285,632) 22,632,510

(326,765,502) 27,003,321



956,691,120 1,284,031,792





Net realized (gain) loss on non-derivative financial assets 4,237,800 (13,078,125)Change in unrealized (gain) loss on non-derivative

financial assets (663,855) 1,057,032Change in unrealized (gain) loss on futures contracts 957,600 1,481,978Purchases of portfolio investments (837,359,197) (1,293,724,499)Proceeds from sale of portfolio investments 1,146,784,595 1,285,045,495Margin deposited on derivatives 4,997,428 (2,039,298)Accrued investment income and other 844,346 (55,600)Accrued expenses and other payables 46,680 76,784

Net cash provided by (used in) operating activities 325,026,151 4,374,901CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 91,721,819 119,498,498Amounts paid on redemption of redeemable units (425,616,047) (117,652,980)Distributions to unitholders of redeemable units (496,288) (944,529)

Net cash provided by (used in) financing activities (334,390,516) 900,989Net increase (decrease) in cash (9,364,365) 5,275,890Cash (bank overdraft), beginning of period 27,709,343 11,388,938

CASH (BANK OVERDRAFT), END OF PERIOD 18,344,978 16,664,828

Interest received(1) 11,890,790 16,857,088



22

Scotia Private Short-Mid Government Bond Pool (Unaudite

Documents

ScotiaFunds Interim Reportdr.scotiabank.com/ca/en/files/17/08/ScotiaFunds_FS_2017...1 Economic & Financial Market Outlook Financial Statements Cash Equivalent Funds 3 Scotia T-Bill