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Experience Evolution
Investment realities
We are living in a world of uncertainties, volatility and opportunities
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Markets are unpredictable
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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 201810 Yr. Avg
10 Yr. Vol
Canadian Equity Large Cap
31.1% 62.4% 35.1% 9.7% 25.8% 48.1% 26.3% 21.6% 38.5% 28.7% 7.7% 14.3% 15.8%
Canadian Equity Small Cap
6.4% 57.5% 20.2% 8.3% 16.0% 41.3% 23.9% 20.0% 21.1% 17.4% 4.2% 13.1% 15.4%
U.S. Equity Large Cap -17.2% 52.0% 17.6% 4.6% 15.6% 31.6% 14.3% 19.5% 17.5% 13.8% 3.8% 11.6% 14.3%
U.S. Equity Small Cap -18.3% 35.1% 15.2% 4.4% 15.3% 17.2% 12.0% 16.1% 17.1% 9.1% 1.4% 11.0% 13.9%
International Equity -21.2% 17.4% 14.1% -0.4% 13.8% 13.0% 10.6% 14.6% 8.3% 8.5% -1.3% 9.5% 12.2%
Emerging Markets Equity
-26.4% 17.1% 13.0% -1.8% 13.4% 11.4% 9.7% 8.2% 8.1% 7.5% -2.3% 8.9% 10.8%
Global Real Estate -28.8% 12.5% 10.2% -3.5% 10.3% 7.6% 8.8% 3.5% 7.7% 7.1% -3.0% 7.9% 10.7%
Canadian Fixed Income -33.0% 8.0% 9.1% -8.7% 7.2% 7.4% 7.0% 2.4% 1.7% 4.1% -5.6% 7.9% 8.2%
Global Fixed Income -34.6% 7.4% 6.7% -9.5% 3.6% 4.3% 4.1% -4.6% 1.4% 2.8% -6.5% 6.6% 7.7%
High-Yield Fixed Income -41.4% 5.4% 2.6% -16.1% 2.0% 3.9% 2.5% -8.3% -1.4% 2.5% -8.9% 4.2% 6.7%
Balanced Portfolio -45.5% -9.2% 0.0% -16.4% -2.2% -1.2% -2.3% -13.3% -2.0% 0.3% -18.2% 3.5% 3.5%
Source: Morningstar. As at December 31, 2018. Balanced Portfolio is based on 18.5% Canadian Equity Large Cap (S&P/TSX Composite TR), 2.5% Canadian Equity Small Cap (S&P/TSX Small Cap TR), 17.9% U.S. Large Cap (S&P 500 TR CAD), 3.1% U.S. Equity Small Cap (Russell 2000 TR CAD), 2% Emerging Markets (MSCI EM GR CAD), 16% International Equity (MSCI EAFE GR CAD), 8% High-Yield Fixed Income (ICE BofAML U.S. High Yield TR USD), 18% Canadian Fixed Income (FTSE TMX Canada Universe Bond), 5% Global Real Estate (FTSE EPRA/NAREIT Developed TR), and 9% Global Fixed Income (BBgBarc Global Aggregate TR CAD).
Closing the behavior gap
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Source: behaviorgap.com
Investmentreturn
Investorreturn
Behaviorgap
Emotional investing
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Buying high
Selling low
Permanent losses
The investor dilemma
“Investor return is far more dependent on investor behavior than on performance. Investors who hold their investments are more
successful than those that time the market.”
“Actions driven by aversion to loss are the primary causes of loss among investors.”
– 2014 Quantitative Analysis of Investor Behavior, Dalbar Inc.
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The solution – A disciplined process
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Individual risk profile
Construct efficient
portfolios
Implement asset mix using various
managers
Risk management
A winning team of experts adds value
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You
Your Financial Advisor
CI Multi-Asset Management
Portfolio Managers
State Street Global
Advisors
In-house wealth
planners
Portfolio construction vs. market prediction
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A proven, disciplined investment process
One size does not fit all: every client has a different risk tolerance and time horizon.
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Investor Profile Questionnaire – It’s about you
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The Investor Profile Questionnaire helps us understand your:
• Financial situation• Investment goals• Time horizon• Risk tolerance
The Investment Policy Statement – Your road map
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“If you don’t know where you are going, any road will do”
The Investment Policy Statement:
• Identifies a tailored investment strategy that takes into account your goals and risk tolerances
• Sets out the asset allocation strategy• Includes a customized portfolio• Includes a range of portfolio returns
Portfolios built for you
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Multiple IP Groups can be linked to form a Family Group
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Family Group
Husband
IP Group 1
40i60e
Wife
IP Group 2
50i50e
Corporation
IP Group 3
60i40e
Child
& Spouse
IP Group 4
30i70e
Portfolios are constructed based on varying investment objectives and risk tolerances of each family member
Portfolio design expertise
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Take action with active management
▪ Focus on quality
▪ Reduce volatility
▪ Downside protection
▪ Valuations considered when deciding what to buy and sell
▪ Risk management strategies
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Using active management to seize market opportunities while minimizing risks
▪ Add value with active share - 84% for Evolution 40i60e Model Portfolio
▪ Optimize returns with higher upside capture and minimize losses with lower downside capture
Evolution 40i60e Model Portfolio* versus
40% FTSE TMX Canada Universe Bond Index / 60% S&P/TSX Composite Index
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Upside Capture Ratio Downside Capture Ratio
5-year 98% 61%
7-year 101% 69%
10-year 97% 87%
*Standard geographic asset allocation and blend of investment styles including alpha
As of December 31, 2018
International Equity Alpha Corporate Class
98.6%International Equity Alpha Corporate Class
vs.MSCI EAFE Total Return Index
Source: CI Investments
Active shareDecember 31, 2018
The percentage of a fund’s portfolio that differs from the index
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International Equity Alpha Corporate Class
Top 15 holdings = 64% of fund totalSame holdings = 1.6% of MSCI EAFE Total Return Index
Holdings are concentrated and different
Top 10 holdings as at March 31, 2018 Country % of Fund % of MSCI EAFE
HeidelbergCement Germany 5.1% 0.1%
ICICI Bank India 4.9% 0.0%
Tate & Lyle PLC United Kingdom 4.8% 0.0%
Royal Boskalis Westminster N.V. Netherlands 4.5% 0.0%
Kunlun Energy Bermuda 4.5% 0.0%
ASM International Netherlands 4.3% 0.0%
Carnival PLC United Kingdom 4.3% 0.1%
BAE Systems United Kingdom 4.2% 0.2%
Sinopharm Group China 4.1% 0.0%
Lloyds Banking Group United Kingdom 4.1% 0.4%
Assicurazioni Generali Italy 4.1% 0.2%
Dentsu Japan 4.1% 0.1%
Haier Electronics Group Co Hong Kong 3.9% 0.0%
Santander Mexico Financial Group Spain 3.7% 0.6%
Bharti Infratel Ltd India 3.5% 0.0%
Source: CI Investments
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Predictable range of returns
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Historic rolling one-year returns on a monthly basis from September 2008 to September 30, 2018.Source: CI Investments
4.0% 5.7% 6.3% 6.8% 7.4% 8.3% 8.9% 9.4% 10.4%
10.2%
17.9%19.6%
20.8%
23.5%
27.9%
30.4%32.0%
33.8%
-3.3% -2.7% -3.2% -3.9% -4.7% -5.7% -6.6%-7.3%
-8.4%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
100i 80i20e 70i30e 60i40e 50i50e 40i60e 30i70e 20i80e 100e
Average Best Worst
Sophisticated risk management
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Currency management
Portfolio rebalancing
Sector exposure
management
Market risk management
Portfolio manager oversight
$0.60
$0.70
$0.80
$0.90
$1.00
$1.10
Feb 2007 Feb 2009 Feb 2011 Feb 2013 Feb 2015 Feb 2017
CAD/USD
Ongoing risk managementCurrency management
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Source: Bloomberg, CI Investments. As at December 31, 2018.
30% hedge 30% hedge
50% hedge 50% hedge
70% hedge 70% hedge
10% hedge
90% hedge 90% hedge
Portfolio rebalancing
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Sector exposure/market risk – see the difference
Evolution 40i60e Model Portfolio with standard geographic asset allocation and blend of investment styles including alpha vs. S&P/TSX Composite Index
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Source: CI Investments, Bloomberg, as of December 31, 2018.
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
Other
Utilities
Materials
Telecommunication services
Consumer staples
Consumer discretionary
Energy
Health care
Information technology
Industrials
Real estate
Financial services
S&P/TSX Composite Index
Evolution 40i60e Model Portfolio
Portfolio manager oversight process
Daily/Weekly
•Compliance
•Bi-weekly team meeting
Semi-Annual/Annual
• Investment manager due diligence
Monthly
• Performance reporting
• Exposure reporting
Quarterly
• Performance attribution
• Factor and style analysis
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Tax efficiency
Evolution makes use of CI Corporate Class, which allows you to:
▪ Defer and minimize tax payments given the low dividend payout policy.
▪ Receive tax-efficient capital gains or Canadian dividends from all funds regardless of mandate.
In addition, when you are ready to draw income from your portfolio, Evolution allows you to create a fully customizable, tax-efficient monthly cash flow stream, even as your savings continue to grow.
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The importance of communication
▪ Investment Policy Statement
▪ Consolidated quarterly statement
▪ Consolidated tax package
▪ Wealth planning
▪ Quarterly portfolio review
▪ Monthly market commentaries
▪ Online access
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Consolidated reporting
▪ Portfolio overview
▪ Performance
▪ Transparency
The contents of this report are shown here for
illustrative purposes only and are not meant to
imply actual or expected performance of the
United pools and portfolios.
Quarterly Statement
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Consolidated reporting
▪ Detailed capital gain/loss report
▪ T3 / T5 slips
▪ Adjusted cost base
▪ Statement of fees paid
▪ Personal and corporate
▪ Non-calendar year-end
Tax Package
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Professional advice matters
Research shows that the longer you get financial advice, the more your assets grow. 1.58x
4-6 years
1.99x7-14 years
2.73x15+ years
Source: An econometric analysis of the value of advice in Canada, by Claude Montmarquette, CIRANO, 2012
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Wealth planning – It’s about more than just your investments
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Financial planning
(with optional insurance component)
Estate planning
Financial Planning
We help you answer the following questions:
▪ What do you have today?
▪ Will it be enough to meet your needs?
▪ What happens if things change?
▪ Is your family protected?
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Estate Planning
The estate planning process involves several key components, including:
▪ Understanding your current circumstances and intentions
▪ Distribution of your assets
▪ Preparing a will or reviewing an existing will
▪ Beneficiary designations
▪ Powers of attorney
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Active management, active advice
Estate PlanFinancial
Plan
WealthPlanning
Client
Client’s Professional Advisors
(lawyers, accountants)Assante Advisor
Practice Advisory Resources
Investment Management
Portfolio Construction
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The Evolution Advantage
▪ Personalized solution: IPQ and IPS, linking of multiple IP groups
▪ Tax-effective investing
▪ Separately Managed Accounts for short-term income needs
▪ Tax-free monthly cash flow through optional T-Class platform
▪ Consolidated statement and tax packages
▪ Extended family grouping
▪ Wealth planning
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Returns for Evolution model portfolios
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Returns (in %) 1 Year 3 Years 5 Years 10 Years
100i -0.9 0.4 2.0 3.6
80i20e -2.0 1.0 3.2 5.0
70i30e -2.8 1.2 3.4 5.5
60i40e -3.4 1.6 3.8 5.9
50i50e -4.4 1.9 3.9 6.4
40i60e -5.4 2.2 4.1 7.1
30i70e -6.2 2.6 4.3 7.5
20i80e -7.0 2.8 4.4 7.8
100e -8.4 3.2 4.7 8.5
Returns for Evolution model portfolios with standard geographic asset allocation and a blend of investment styles including alpha
As at December 31, 2018
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Thank youEvolution Private Managed Accounts is a program that provides strategic asset allocation across a series of portfolios comprised of United and CI mutual funds and ismanaged by CI Investments Inc. (“CII”). Evolution Private Managed Accounts is not a mutual fund. CII provides portfolio management and investment advisory servicesas a registered advisor under applicable securities legislation. Evolution Private Managed Accounts is available through Assante Capital Management Ltd. (a member ofCanadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada) and Assante Financial Management Ltd., (a member of the MutualFund Industry of Canada), both wholly owned subsidiaries of CI Financial Corp. (“CI”). The principal business of CI is the management, marketing, distribution andadministration of mutual funds, segregated funds and other fee-earning investment products for Canadian investors through its wholly owned subsidiary CII. If youinvest in CI products, CI will, through its ownership of subsidiaries, earn ongoing asset management fees in accordance with applicable prospectus or other offeringdocuments. Evolution Private Managed Accounts are managed by CI Investments Inc. under the United Financial brand.
Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments or investments in Evolution Private ManagedAccounts. Please read the United Pools and CI Funds prospectus and consult your advisor before investing. Unless otherwise indicated and except for returns for periodsless than one year, the indicated rates of return are the historical annual compounded total returns including changes in security value. All performance data assumereinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by anysecurityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Anyreference to an Evolution portfolio’s performance refers to a model portfolio with a standard geographic asset allocation and blend of investment styles including alpha.Assumptions for the model portfolio include: performance of the model portfolio is based on net returns and is representative of the Class E securities of the underlyingUnited Funds, or Class A shares in the case of the underlying Cambridge Canadian Equity Corporate Class and Synergy American Corporate Class; the portfolios arerebalanced monthly (actual client portfolios are rebalanced when the asset allocation exceeds the thresholds identified in the prospectus); and no tax implications aretriggered on rebalancing. The returns of the model portfolios are not indicative of returns for clients.
The contents of this piece are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. Certainstatements contained in this communication are based in whole or in part on information provided by third parties and CI Investments Inc. has taken reasonable steps toensure their accuracy.
CI Multi-Asset Management, Cambridge Global Asset Management, Signature Global Asset Management and Harbour Advisors are divisions of CI Investments Inc.Certain funds associated with Cambridge Global Asset Management or Harbour Advisors are sub-advised by CI Global Investments Inc., a firm registered with the U.S.Securities and Exchange Commission and an affiliate of CI Investments Inc. Certain portfolio managers of CI Global Investments Inc. are associated with CambridgeGlobal Asset Management or Harbour Advisors. ®CI Investments, the CI Investments design, Cambridge, Harbour Advisors, Harbour Funds and Evolution are registeredtrademarks of CI Investments Inc. ™Signature Global Asset Management and Signature Funds are trademarks of CI Investments Inc. Published February 2019.
