the changing landscape of asset management derek j. green president, ci investments january 2014...
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The Changing Landscape of Asset Management
DEREK J. GREENPresident, CI Investments
January 2014
Canada’s Investment Company
CI Financial: record success
CIX +4,486%
Financial Services +1,365%
TSX +410%
21% CAGR
December 2013
June 1994
Total return to December 31, 2013
100
22% CAGR
Industry highlights
* Annualized returns
Sales and Assets
Total industry assets of $986.4B, up 17.8% year over year.
Shift to managed money continues; Mutual Fund of Funds account for 26.6% of AUM, and 81.3% of 2013 YTD net sales.
YTD total industry flow of $39B; equity fund net inflow of $5.4B.
Source: IFIC, as at November 30, 2013
December 31, 2013 ($C) 3 month 1 year 2 years* 3 years* 5 years*
TSX 203.7696936 7.3% 13.0% 10.0% 3.4% 11.9%
Dow Jones 127.9733836 13.7% 38.5% 22.2% 18.3% 13.6%
Nasdaq 65.23796923 14.7% 49.7% 31.3% 20.5% 19.7%
S&P 500 101.8473849 14.1% 41.4% 26.7% 18.8% 14.8%
MSCI World 104.1174703 11.6% 36.2% 24.7% 14.8% 12.7%
Sales & assets by product: YTD
* Managed Solutions is Portfolio Series, Portfolio Select Series, Private Client, Evolution, Optima Strategy and G5/20.
January 1 – December 31, 2013
Managed solutions continue to deliver strong results, consistent with overall industry trends.
Traditional funds continue to see significant flows, along with solid growth in PIM offering.
$M % $M % $M % $M %Managed Solutions 3,187.47 23.00% 1,224.47 12.04% 1,963.00 53.26% 18,313.56 20.14%Traditional Funds 6,949.00 50.15% 5,294.55 52.05% 1,654.45 44.88% 43,785.03 48.15%PIM 1,049.60 7.57% 157.81 1.55% 891.79 24.19% 2,495.31 2.74%Institutional 2,284.57 16.49% 2,507.71 24.65% (223.15) -6.05% 13,115.90 14.42%Segregated Funds 387.01 2.79% 987.10 9.70% (600.09) -16.28% 13,230.29 14.55%Total 13,857.64 100.00% 10,171.64 100.00% 3,686.00 100.00% 90,940.09 100.00%
Purchases Redemptions Net SalesProduct AUM
Maintaining market share is winning
Source: Investor Economics, CI
Independents are getting squeezed out
Banks 17%Banks 23%
Banks 46%
Independents 79% Independents 69%
Independents 44%
CI 4%CI 8% CI 10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1994 2002 2012
Maintaining is winning
Source: Company websites, IFIC, Morningstar
CI Mackenzie Templeton AGF Bridgehouse-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
40%
4%
-2%
-20%
-40%
CI’s AUM versus other independentsChange in AUM over 5 years ending September 30, 2013
“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”
- Charles Darwin
A new client relationship model: NI-103
PreparationRunway
Requirements Implementation Date
Now
• Regular quarterly account statements or monthly if requested• 60 days notice of new or increased operating charges• RDI must contain a complete description of operating and transaction charges
July 15th, 2013
2013• Pre-trade disclosure of all charges• Enhanced content of trade confirmations• Additional Benchmark Information
July 15th, 2014
2014• More thorough account statements• Position cost information July 15th, 2015
2015• DSC information on trade confirmation• Report summary on charges and other compensation• Performance Reporting: money-weighted basis
July 15th, 2016
How to prepare right now
Demonstrate your value Inform your clients
• Re-visit your Value Proposition
• Ensure you are providing a full Wealth Advisory service to your top clients
• Conduct the Value Test on your existing clients
• Prepare a Value Map for each of your clients
• Prepare for a conversation about the changes ahead
• Make clients aware of changes sooner rather than later (face to face, telephone or letter)
• Prioritize your top clients, customize an approach tailored to their communication style
N31-103 / CRM 2 – How to prepare
N31-103 / CRM 2 – What is CI doing?
• CI’s Professional Development team is educating advisors about the challenges they face – See upcoming N31-103 / Client Relationship Model Presentation– N31-103 Article in May issue of CI Monthly Review– Participating Spring Roadshow– Webinars
• During the next 6 to 8 months the CI Sales and Marketing Team will be delivering content to help advisors with this transition
Remember…this is a tremendous opportunity for strong advisors that deliver value to their clients
CI Investments
• Experience – Managing money since 1965.
• Size and scale – Resources to invest in top-quality investment management, service and innovative products.
• Financial strength – Parent company CI Financial Corp. (TSX:CIX) is the third-largest investment fund company in Canada.
• Reputation – Well-known brand: “Canada’s Investment Company”.
The industry’s widest selection of investment funds on a variety of platforms
Managed Solutions
Tax-effective Solutions
Guaranteed Solutions
Introducing…
CI’s Corporate Class: An excellent tax-efficient solution
CI Corporate Class:
• Oldest and largest structure in the industry• Over $30 billion in AUM • Over 50 funds offered• Available in T-Class for monthly, tax-efficient cash flow• A strong and diverse lineup of award-winning management teams
Top portfolio management teams lead to best-in-class solutions
Strong fund performance
Consistent outperformance on a risk-adjusted basis relative to index and industry peers
Returns (%) Globefund quartiles
YTD 1y 3y 5y 10y 3y 5y 10y
CANADIAN EQUITY
Cambridge Canadian Equity Corporate Class 24.9 27.3 14.7 15.3 7.5* 1 1 -
Signature Select Canadian Fund 17.4 19.1 7.0 10.6 8.4 2 2 1
CI Canadian Investment Fund 23.7 26.6 6.6 10.7 7.7 2 2 1
Signature Dividend Fund 14.9 16.9 8.9 13.3 6.5 1 1 2
CANADIAN BALANCED
Cambridge Canadian Asset Allocation Corp Cl 17.5 18.7 8.0 11.3 5.2* 1 1 -
Signature Income & Growth Fund 12.7 14.1 7.3 11.2 7.6 2 1 1
Signature Canadian Balanced Fund 11.3 12.3 5.9 8.9 7.5 2 2 1
DIVERSIFIED INCOME
Signature High Income Fund 7.4 9.1 8.3 13.8 8.9 1 1 1
Cambridge High Income Fund 10.2 12.2 8.5 13.5 10.5* 1 1 -
CI Portfolio Series Income Fund 7.9 8.4 6.4 8.8 5.4 1 2 1
GLOBAL EQUITY
Cambridge Global Equity Corporate Class 32.1 33.9 12.0 12.9 6.5* 2 1 -
Black Creek Global Leaders Fund 36.8 42.0 14.1 16.0 4.9* 1 1 -
Black Creek International Equity Fund 35.0 41.9 16.9 17.6 15.1* 1 1 -
GLOBAL BALANCED
Signature Global Income & Growth Fund 16.6 18.5 8.6 12.0 2.8* 1 1 -
Black Creek Global Balanced Fund 23.2 28.5 12.3 13.2 5.3* 1 1 -
CI Portfolio Series Balanced Growth Fund 18.0 19.5 8.3 10.0 5.3 2 2 2
SPECIALTY
CI Global Health Sciences Corp Class 57.9 59.1 29.4 24.5 9.8 1 1 2
Globefund, as at November 30, 2013
*since inception return was used when 10-year was unavailable
CI’s marketing strategy and new initiatives
Brand Marketing
Continue to increase brand awareness for CI Investments and G520
• RSP Media Plan targeting 30 million viewers through CBC, TSN, RDS, BNN, Global and CTV Networks.
• Golf Media Plan targeting 66 million viewers through the four majors, Ryder Cup and 20 PGA tournaments throughout the year on TSN, RDS, Global and regional stations.
Event Marketing
• Digital Roadshow featuring 12 webcasts over three days• CI Leadership Forum in Las Vegas on October 7-10• National Spring Roadshow featuring Signature• Professional Development focused events
Product Highlights
• G520 enhancements: added F, O and LL class, exploring immediate payout option and annual resets
• Launching 3 new mandates with Marret Asset Management– Global High Yield, Short Duration, Strategic Yield
• New Cambridge U.S. Dividend and Canadian Dividend• Private Client 2014 enhancements
Thank you
All charts and illustrations in this guide are for illustrative purposes only. They are not intended to predict or project investment results.
®CI Investments, the CI Investments design and Harbour Advisors are registered trademarks of CI Investments Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise indicated and except for returns for periods less than one year, the indicated rates of return are the historical annual compounded total returns including changes in security value. All performance data assume reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
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