ci international balanced fund · 2004-04-05 · ci mutual funds inc. february 1, 2003 a message...

CI InternationalBalanced Fund

2002 Annual Report as at December 31

The past three years have been the most challenging on global

markets in 50 years. What makes this more unsettling is that these

conditions follow a decade of unprecedented market growth.

So, for many investors, these markets may be a new experience.

In times like these, it is tough to stay focused on the long term.

However, history tells us that the markets will turn around and

resume their long-term upward trend, reflecting the ongoing

growth of companies and the overall economy.

In spite of the current market conditions, CI has taken steps to

ensure we continue to provide you with the investment options

you need. Here is what CI offers:

• Experience – CI has been providing investment products and

services since 1965. We manage over $30 billion on behalf of

more than 1.4 million Canadians.

• Choice – Whether you’re looking for Canadian or global equity

funds, fixed-income or balanced funds, they are all available

from CI. Our varied investment options include mutual funds,

segregated funds, tax-advantaged funds, RSP-eligible foreign

funds and the CI Portfolio Series.

• Expertise – Our wide range of investment funds is combined

with world-class portfolio managers like Gerry Coleman (named

Fund Manager of the Year at the 2001 Canadian Mutual Fund

Awards and manager of Harbour Fund, named Best Canadian

Equity Fund in 2002), Eric Bushell (manager of Signature

Dividend Fund, which was selected Best Dividend Fund in

2001 and 2002, and of Signature Select Canadian Fund, named

Best Canadian Equity Fund in 2001), and Bill Miller (named

Fund Manager of the Decade for the 1990s by Morningstar).

• Service – CI’s Client Services team can be reached toll-free at

1-800-563-5181 or by e-mail at [email protected]. You can

also access your account through CI’s state-of-the-art website at

www.cifunds.com by clicking on My Account. In addition, our

site has a great deal of information about our funds and about

investing in general.

We know the markets are challenging, but our goals have never

changed – to provide you, through your adviser, with the products

and services you need to meet your financial goals.

Thank you for investing with CI Funds. We realize that it is a

privilege to manage your money. If you have any questions, please

contact your adviser or our Client Services Department.

Yours truly,

Peter W. Anderson

President,

CI Mutual Funds Inc.

February 1, 2003

A Message from the President

P E R F O R M A N C EFund Objective:To obtain maximum long-term totalreturn. It invests primarily in equities, equity-related securities and fixed-income securities of issuers locatedthroughout the world. The fund is notlimited to how much it invests in acountry or asset class or keeps investedin each asset class. This will varyaccording to market conditions.

Lead Manager:William Sterling and Robert Beckwitt

Adviser:CI Global Advisors LLP

Management Style:Top-down analysis of global macro-economic trends; bottom-up research toselect equity and fixed-income holdings.

Fund Assets: $1,140.9 million

NAV per Unit:Class A Cdn $13.84 US $8.80Class F Cdn $7.21 US $4.59Class I Cdn $9.62 N/A

Inception: September 1994

RSP/RIF Eligible: 30%(Also available as 100% RSP)

Distribution: Paid annually

Management Expense Ratio:Class A 2.52%Class F 1.45%Class I 0.03%

Fund Code: CIGFront End DSC

Class A Cdn 630 Cdn 830US 130 US 530

Class F Cdn 128 Cdn –US 528 US –

Class I Cdn 895 Cdn –US – US –

C I I n t e r n a t i o n a l B a l a n c e d F u n d 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

$30,000

$20,000

$10,000

$16,173

Sept. '94 '96 '98 '00 Dec. '02

South Africa 0.3 Utilities 3.0, Consumer Staples 3.0, Materials 2.7, Foreign EquityFutures 2.5, Short Term Investments 0.1

Top 10 Equity Holdings [%]Microsoft Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [United States, Information Technology] . . . . . . . . . . . . . . . . . . . 1.7Citigroup Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [United States, Financials] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2General Electric Co.. . . . . . . . . . . . . . . . . . . . . . . . . . [United States, Industrials] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1Pfizer Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [United States, Health Care] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9Pharmacia Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . [United States, Health Care] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8ChevronTexaco Corp. . . . . . . . . . . . . . . . . . . . . . . . . [United States, Energy] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8American International Group Inc. . . . . . . . . . . . . . [United States, Financials] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7Vodafone Airtouch PLC. . . . . . . . . . . . . . . . . . . . . . . [Britain, Telecommunication Services] . . . . . . . . . . . . . . . . . . . . 0.7Liberty Media Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . [United States, Consumer Discretionary] . . . . . . . . . . . . . . . . . . 0.6Bank of New York Company Inc.. . . . . . . . . . . . . . . [United States, Financials] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6

U.S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.1Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.2Developed Europe. . . . . . . . . . . . . . . . . . . . . . . . . . . 15.7Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2Asia Ex Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6Latin America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7Emerging Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7Bermuda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4Australia / New Zealand . . . . . . . . . . . . . . . . . . . . . 0.3Cash & Equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8

Government Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . 22.9Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.6Consumer Discretionary . . . . . . . . . . . . . . . . . . . . . 12.0Information Technology . . . . . . . . . . . . . . . . . . . . . . 8.9Health Care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7Industrials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9Index Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3Telecommunication Services . . . . . . . . . . . . . . . . . 3.4Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2Cash & Equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8

Country Allocation [%] Sector Allocation [%]

Current Value of $10,000 Investment in Class A units

Class A Class F Class I1 year -13.1 -12.1 -10.43 years -10.0 N/A N/A5 years 0.8 N/A N/ASince Inception 6.0 -12.7 -3.0

Class A Class F Class I2002 $ - $ - $ -

C$ NAV at December 31 each year:

Class A Class F Class I2002 $ x.xx $ x.xx $ x.xx

AT

A G

LAN

CE

H O L D I N G S & A L L O C AT I O N

Total Annual Distribution:Compound Annual Returns [%]

CI International Balanced Fund

Net asset value per unit, beginning of year

Distribution per unit:

From net income

From net realized gain

Net income (loss) per unit

Net realized and unrealized appreciation

(depreciation) of investments per unit

Surplus (deficiency) of capital transactions

over original cost per unit

Net asset value per unit, end of year

Ratios & Supplemental Data

Total return (%) (a)

Average net assets ($000’s) (b)

Management expense information (c)

Management and operating expenses (%)

Goods and services tax expenses (%)

Total management expense ratio (%)

Portfolio turnover rate (d)

Units Issued and Outstanding

Balance beginning of year

Units issued for cash including

re-invested distributions

Units issued on fund merger (Note 1)

Units redeemed

Balance end of year

Additional Fund Notes (in 000’s)

Brokerage Commissions

Net capital loss carried forward

Non-capital loss carried forward (e)

(a) Total return is the historical rate of return of an investment for the year, assuming reinvestment of all distributions at net asset value.(b) Average net assets are calculated based on the daily net assets outstanding.(c) Management expense information is calculated based on total amount of respective expenses and expressed as an annualized percentage of average net assets during the year. (d) Portfolio turnover rate equals the lesser of purchases or sales divided by the average value of the portfolio securities of the fund, excluding short-term securities.(e) Losses will expire within seven years.

Inception dates for all classes, please refer to note 1 in the Notes to the Financial Statements.

Class A Class F Class I

2002 $ 2001 $ 2000 $ 1999 $ 1998 $ 2002 $ 2001 $ 2000 $ 2002 $ 2001 $

15.93 19.29 19.04 16.02 14.00 8.20 9.82 10.00 10.74 10.00

- - - (0.06) (0.13) - - - - -

- - (0.03) (0.09) (0.57) - - (0.01) - -

- - (0.03) (0.15) (0.70) - - (0.01) - -

(0.60) (0.58) (0.28) 0.14 0.20 (0.23) (0.30) (0.09) (0.16) 0.08

(1.44) (2.60) 0.90 5.17 2.53 (0.73) (1.33) (0.08) (0.96) 0.59

(2.04) (3.18) 0.62 5.31 2.73 (0.96) (1.63) (0.17) (1.12) 0.67

(0.05) (0.18) (0.34) (2.14) (0.01) (0.03) 0.01 - - 0.07

13.84 15.93 19.29 19.04 16.02 7.21 8.20 9.82 9.62 10.74

(13.12) (17.4) 1.5 19.8 19.5 (12.07) (16.5) (1.7) (10.43) 7.4

609,264 738,265 1,151,154 618,159 166,548 778,630 994,768 1,070,985 18,816 11,398

2.36 2.36 2.34 2.41 2.42 1.36 1.36 1.34 0.03 0.03

0.16 0.16 0.16 0.17 0.17 0.09 0.09 0.09 - -

2.52 2.52 2.50 2.58 2.59 1.45 1.45 1.43 0.03 0.03

0.85 1.21 1.20 1.12 1.39 0.85 1.21 1.20 0.85 1.21

41,798,669 38,053,668 114,522,177 112,893,310 1,188,482 -

262,068,561 129,124,121 22,604,057 22,875,947 1,737,663 1,199,717

2,209,986 - 1,166 - 929 -

(270,252,918) (125,379,120) (51,388,985) (21,247,080) (166,482) (11,235)

35,824,298 41,798,669 85,738,415 114,522,177 2,760,592 1,188,482

3,589 4,397

140,785

105,497

CI International Balanced FundStatements of Financial Highlights (for the years ended December 31)


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

U.S.A. (40.2%)33,300 Accreado Health Inc. 1,929,317 1,845,608

31,000 Adobe Systems Inc. 1,590,148 1,214,148

18,300 Affiliated Managers Group Inc. 1,396,301 1,447,289

36,300 AGCO Corp. 1,461,809 1,261,348

103,700 Alcoa Inc. 6,055,030 3,714,228

20,200 Ambac Financial Group Inc. 1,670,743 1,786,211

127,600 Amdocs Ltd. 2,682,426 1,970,145

23,900 Amerada Hess Corp. 2,156,121 2,068,670

74,600 American Express Co. 4,734,648 4,146,334

85,732 American International Group Inc. 10,183,294 7,797,985

107,000 AMR Corp. 2,434,326 1,110,360

36,800 Angiotech Pharmaceuticals Inc. 2,209,141 1,970,736

66,400 AOL Time Warner Inc. 4,812,111 1,367,651

24,400 Applera Corp. - Applied Biosystems Group 584,280 672,908

15,200 Arbitron Inc. 736,090 800,616

48,100 Ashland Inc. 2,587,877 2,157,659

33,660 AT&T Corp 3,751,319 1,381,838

233,870 AT&T Wireless Services Inc. 4,405,219 2,077,586

98,700 Autonation Inc. 1,733,887 1,949,139

3,400 Bank of America Corp. 320,531 371,909

185,930 Bank of New York Company Inc. 13,377,627 7,004,423

43,100 Biomet Inc. 1,846,132 1,942,180

54,100 BMC Software Inc. 1,235,738 1,455,403

61,300 Boeing Co. 5,413,868 3,179,647

197,800 Calpine Corp. 1,199,853 1,013,865

18,700 Cardinal Health Inc. 1,829,101 1,740,308

30,200 Career Education Corp. 1,925,678 1,899,341

179,600 Cendant Corp. 3,884,059 2,959,400

10,800 Cephalon Inc. 1,029,052 826,425

30,800 Charles River Laboratories Int'l Inc. 1,888,221 1,863,468

86,300 ChevronTexaco Corp. 10,757,529 9,020,651

83,600 Cisco Systems Inc. 1,382,172 1,721,923

239,859 Citigroup Inc. 16,991,771 13,271,235

78,800 Citrix Systems Inc. 1,130,373 1,526,416

42,700 Clear Channel Communications Inc. 2,151,218 2,503,550

38,000 Coach Inc. 1,952,693 1,966,887

17,200 Cognizant Technology Solutions Corp. 1,889,111 1,953,359

54,453 Comcast Corp. 2,216,594 2,017,983

27,100 Commerce Bancorp Inc. 1,872,356 1,840,300

37,100 ConocoPhillips 2,819,623 2,822,706

125,800 Continental Airlines, Inc. 1,717,473 1,434,018

33,700 Corinthian Colleges Inc 1,948,314 2,006,072

39,900 Costco Wholesale Corp. 1,776,350 1,760,340

48,400 CSX Corp. 2,371,530 2,154,375

162,400 CuraGen Corp. 1,804,569 1,187,340

51,900 CVS Corp. 4,223,863 2,037,614

43,000 Dollar Tree Stores Inc. 1,823,554 1,661,153

19,800 Dominion Resources Inc. 1,490,978 1,709,124

17,400 eBay Inc. 1,847,286 1,855,424

302,800 Edison International 5,484,572 5,641,704

No. of Shares/ Average MarketFace Amount Cost ($) Value ($)

U.S.A. (cont’d)202,100 El Paso Corp. 2,169,209 2,211,626

143,400 EMC Corp./Massachusetts 945,565 1,384,374

65,000 Emulex Corp. 2,055,323 1,895,804

23,600 Entercom Communications Corp. 1,832,137 1,741,029

106,800 Federated Department Stores Inc. 5,531,740 4,829,434

69,200 Federated Investors Inc. 3,078,000 2,760,340

32,800 First Tennessee National Corp. 1,863,948 1,853,480

12,200 Forest Laboratories Inc. 1,765,051 1,884,065

44,820 General Dynamics Corp. 5,093,057 5,593,251

321,560 General Electric Co. 22,244,339 12,311,105

38,600 Gentex Corp. 1,911,465 1,920,259

32,400 Genzyme Corp.-Genl Division 2,066,514 1,506,373

93,000 GlobalSantaFe Corp. 3,592,621 3,556,170

32,520 Goldman Sachs Group Inc. 3,897,767 3,482,040

43,300 Guidant Corp. 2,040,433 2,100,289

24,600 Harley-Davidson Inc. 1,618,169 1,786,953

41,500 Hartford Financial Services Group Inc. 3,050,876 2,964,332

54,200 Heartland Express Inc. 1,915,669 1,952,448

75,000 Hewlett-Packard Co. 1,435,496 2,047,138

6,000 Hindalco Industries Ltd. 101,394 116,508

51,200 Hollywood Entertainment Corp. 1,460,902 1,215,578

229,200 Hughes Electronics Corp. 3,859,849 3,855,977

32,800 IDEC Pharmaceuticals Corp. 2,065,459 1,710,627

38,300 Impath Inc. 839,434 1,187,522

69,690 Intel Corp. 2,147,411 1,706,063

45,500 International Rectifier Corp. 1,181,013 1,320,624

55,200 Investment Technology Group Inc. 1,990,803 1,940,649

52,200 ITT Education 1,829,974 1,932,847

43,800 IVAX Corp. 801,917 835,355

138,500 JC Penney Co. Inc. Holding Co. 4,095,721 5,010,747

359,100 JDS Uniphase Corp. 1,643,988 1,394,596

21,200 Johnson & Johnson 1,835,828 1,790,305

49,500 Jones Apparel Group Inc. 2,532,229 2,758,259

95,800 Kinder Morgan Inc. 6,567,720 6,366,985

81,000 King Pharmaceuticals Inc. 2,275,265 2,189,258

120,460 Kroger Co. 4,480,485 2,926,223

506,708 Liberty Media Corp. 10,999,624 7,122,482

35,800 Lincare Holdings Inc. 1,533,110 1,779,840

38,700 Macrovision Corp. 644,043 976,004

25,000 Marsh & McLennan Co., Inc. 1,834,906 1,816,402

27,800 MBIA Inc. 1,959,887 1,917,121

183,500 Medarex, Inc. 1,534,998 1,139,644

46,800 MedImmune Inc. 2,094,048 1,999,270

54,400 Mellon Financial Corp. 2,799,273 2,233,273

670 Merck & Co., Inc. 50,297 59,635

55,000 Merrill Lynch & Company Inc. 3,535,390 3,281,788

243,240 Microsoft Corp. 20,912,555 19,772,500

35,700 Mid-Atlantic Medical Services Inc. 1,891,866 1,818,651

471,800 Mirant Corp. 1,449,722 1,402,025

57,428 Monsanto Co. 1,975,747 1,738,163



CI International Balanced FundInvestment Portfolio (as at December 31, 2002)

The accompanying notes are an integral part of these financial statements. All common shares unless otherwise noted. Percentages shown in brackets relate investmentsat market value to total net assets of the fund.

U.S.A. (cont’d)55,500 Morgan Stanley 5,504,556 3,483,530

64,100 Navistar International Corp. 2,465,782 2,450,073

68,100 Network Appliance Inc. 1,049,299 1,070,738

31,300 Neuberger Berman Inc. 1,469,238 1,648,145

19,900 Nike Inc. 1,406,710 1,391,414

47,500 Nucor Corp. 3,295,296 3,084,464

134,600 NYFIX, Inc. 849,504 952,344

104,300 Office Depot Inc. 2,077,742 2,420,509

31,020 Omnicom Group Inc. 3,463,995 3,150,724

53,100 Oracle Corp. 801,033 901,684

34,900 Outback Steakhouse Inc. 1,895,776 1,889,838

51,700 Packaging Corp of America 1,581,547 1,482,694

41,200 Pepsi Bottling Group Inc. 1,818,757 1,664,817

27,200 PepsiCo Inc. 1,827,048 1,805,607

47,900 Petsmart Inc. 1,087,857 1,290,117

217,245 Pfizer Inc. 12,073,125 10,441,942

222,900 PG&E Corp. 4,376,071 4,871,480

137,811 Pharmacia Corp. 10,511,506 9,057,247

45,100 Phelps Dodge Corp. 2,198,654 2,244,328

68,100 Philip Morris Company Inc. 4,713,609 4,339,701

28,400 PMI Group Inc. 1,432,015 1,341,388

167,900 Protein Design Labs Inc. 2,522,922 2,243,911

26,600 Pulte Homes Inc. 1,869,445 2,002,079

24,400 QLogic Corp. 1,342,961 1,323,948

2,825,100 Qwest Capital Funding 5.875% 08/03/04 3,767,610 3,731,205

48,400 Raytheon Co. 2,409,859 2,340,058

12,000 Renal Care Group Inc. 591,933 596,972

26,700 Ryonier Inc. 2,244,762 1,899,616

62,000 Safeway Inc. 2,332,305 2,277,197

98,700 Sanmina-Sci Corp 1,485,737 696,786

101,220 SBC Communications Inc. 4,445,598 4,314,514

95,800 Schering-Plough Corp. 2,831,986 3,343,910

70,100 Scientific Atlanta Inc. 1,409,988 1,307,190

49,900 Scios Inc. 2,048,720 2,556,158

2,800 Sepracor Inc. 141,984 42,572

35,500 Serena Software, Inc. 800,591 881,346

72,900 Siebel Systems Inc. 1,858,341 848,194

175,700 Six Flags Inc. 3,686,085 1,577,408

18,300 SLM Corp. 2,001,036 2,988,378

55,900 Smith International Inc. 2,828,854 2,867,027

92,800 Smurfit-Stone Container Corp. 2,186,207 2,245,696

31,400 St. Jude Medical Inc. 1,747,132 1,960,988

37,500 Starwood Hotels & Resorts Worldwide Inc. 1,347,657 1,399,742

50,000 Steris Corp. 1,902,717 1,906,417

106,000 Storage Technology Corp. 2,818,214 3,569,944

81,800 Supervalu Inc. 2,087,816 2,123,423

194,500 Symbol Technologies Inc. 2,567,693 2,513,781

46,000 Talbots Inc. 2,023,365 1,991,132

56,500 Tollgrade Communications Inc. 1,129,842 1,042,036

90,600 Total System Services, Inc. 1,901,901 1,923,083


U.S.A. (cont’d)111,200 Toys R Us Inc. 2,134,839 1,748,400

97,407 Travelers Property Casualty Corp. 2,133,297 2,243,695

162,000 TXU Corp. 3,806,651 4,758,038

466,300 U.S. Treasury 5.875% 11/15/04 784,102 792,161

189,300 Unisys Corp. 3,015,132 2,946,605

17,680 United Technologies Corp. 2,054,442 1,721,827

14,500 UnitedHealth Group Incorporated 1,886,211 1,903,665

1,432,400 US Treasury Bond 6.25% 05/15/30 2,474,058 2,695,122

6,199,900 USA Treasury 4.25% Nts 15/01/10 11,355,979 11,943,127

24,300 Varian Medical Systems Inc. 1,877,929 1,895,065

114,000 Veritas Software Corp. 5,146,979 2,799,767

56,900 Verity Inc. 802,811 1,198,012

48,840 Verizon Communications Inc. 3,651,232 2,975,661

93,600 Vertex Pharmaceuticals Inc. 2,805,298 2,332,605

61,790 Viacom Inc. 3,334,450 3,959,938

26,400 Wachovia Corp. 1,442,516 1,512,580

51,610 Wal-Mart Stores Inc. 3,900,590 4,098,711

109,230 Washington Mutual Inc. 6,102,315 5,930,271

106,700 Waste Management Inc. 4,110,582 3,845,166

21,400 Weatherford International Ltd. 1,123,877 1,343,535

22,150 Wells Fargo & Co. 1,614,532 1,632,318

118,470 Wyeth 6,788,159 6,966,523

518,326,475 458,924,720 CANADA (17.2%)

45,200 Alcan Inc. 2,121,496 2,097,929

81,251,400 Canadian Gov't 5% 09/01/04 84,525,218 83,810,819

6,268,000 Canadian Gov't 5.1796% 12/01/21 8,149,558 8,676,252

21,040,000 Canadian Gov't 5.5% 06/01/09 20,348,484 22,346,584

30,836,500 Canadian Gov't 5.75% 06/01/29 32,418,293 32,517,089

33,425,500 Canadian Gov't 6% 06/01/11 35,221,304 36,367,278

63,300 Canadian National Railway Co. 3,955,579 4,131,591

185,500 Celestica Inc. 4,139,003 4,112,435

55,600 Inco Ltd. 1,275,446 1,855,670

192,154,381 195,915,647 JAPAN (9.0%)

84,800 Aeon Co., Ltd. 3,088,060 3,154,507

39,800 Aiful Corp. 4,780,765 2,349,888

119,000 Bank of Yokohama Ltd. 734,209 738,838

809,400 Bosch Automotive Systems 1,694,376 1,896,556

137,000 Brother Industries Ltd. 1,436,650 1,365,667

207,100 Calconic Corp. 1,648,247 1,598,372

92,900 Canon Inc. 4,555,289 5,497,339

19,700 Don Quijote Company Ltd. 2,704,407 2,840,033

269 East Japan Railway Co. 1,916,942 2,097,475

35,400 Fast Retailing Company Ltd. 3,903,447 1,958,884

259 Fuji Television Network Inc. 2,559,851 1,638,917

335,000 Hitachi Ltd. 2,069,835 2,017,834

104,000 Honda Motor Company Ltd. 5,972,147 6,044,037

10,100 Hoya Corp. 883,939 1,111,096

73,900 Ito-Yokado Company Ltd. 5,714,107 3,424,063





JAPAN (cont’d)590,033,000 Japan Govt 10-YR 1.8% 03/22/10 8,167,086 8,490,302

100 JGC Corp. 1,273 879

505,400 Kayaba Industry Co., Ltd. 1,659,917 1,364,881

71,900 Kyorin Pharmaceutical Co. Ltd. 1,640,014 1,666,650

43,400 Maruko Co. Ltd. 682,710 757,242

139,000 Matsushita Electric Industrial Co. Ltd. 2,415,441 2,152,930

257,000 Mitsubishi Estate Co. Ltd. 3,005,374 3,075,607

342 Mitsubishi Tokyo Financial Group Inc. 2,952,496 2,920,217

339,900 Mitsui Fudosan Company Ltd. 3,978,144 3,464,744

1,879 Mizuho Holdings Inc. 8,560,610 2,761,080

600,700 Nikko Cordial Corp. 3,725,137 3,180,877

291,000 Nippon Express Co. Ltd. 1,775,681 1,791,328

200 Nippon Mining Holdings Inc. 1,359 421

284,700 Nissan Motor Company Ltd. 3,028,943 3,490,019

208,800 Nomura Holdings Inc. 5,998,434 3,687,361

50,300 Shin-Etsu Chemical Company Ltd. 2,743,953 2,590,281

86,900 Shiseido Company Ltd. 1,565,965 1,775,068

14,450 Shohkoh Fund 2,034,821 1,645,112

39,000 Sony Corp. 3,126,626 2,560,799

1,151 Sumitomo Mitsui Financial Group Inc. 10,283,064 5,652,994

20,000 Tokyo Electron Ltd. 1,159,409 1,421,784

110,500 Tsumura & Co. 1,573,370 1,579,848

2,414 UFJ Holdings Inc. 6,992,352 3,834,845

34,200 Yamada Denki Co. Ltd. 1,132,912 1,134,131

74,200 Yamanouchi Pharmaceutical Company Ltd. 2,969,747 3,379,027

124,837,109 102,111,933 U.K. (3.8%)

140,100 3I Group 1,877,476 1,969,291

191,400 ARM Holdings PLC 622,287 232,682

214,017 BAE Systems PLC 1,652,195 672,123

313,200 BG Group PLC 1,887,913 2,125,864

178,000 Celltech Group PLC 2,271,340 1,555,314

292,600 Centrica PLC 1,474,706 1,267,212

763,300 Chubb PLC 1,788,147 1,696,373

2,596,800 Colt Telecom 12% 12/15/06 2,652,312 2,735,580

147,800 Compass Group PLC 1,502,134 1,235,285

120,900 Diageo PLC 2,063,041 2,066,850

623,300 Kingfisher PLC 3,548,199 3,512,416

459,100 Misys PLC 2,497,094 2,046,439

104,900 Next PLC 2,198,686 1,956,713

135,200 P&O Princess Cruises PLC 1,483,546 1,475,818

50,750 Royal Bank of Scotland Group PLC 2,296,598 1,912,572

222,700 Scottish & Newcastle PLC 2,573,992 2,614,260

276,100 Serco Group PLC 1,548,997 1,069,884

600,800 Spirent PLC 1,631,269 254,873

73,300 Tesco PLC 344,064 360,151

375,100 United Business Media PLC 2,855,234 2,755,015

627,200 United Kingdom Treasury 8.5% 12/07/05 1,584,920 1,786,259

2,637,651 Vodafone Group PLC 11,873,012 7,565,444

52,227,162 42,866,418

FRANCE (3.7%)54,200 Air France 1,456,916 826,239

247,300 Alcatel SA 2,031,349 1,705,433

44,880 Aventis SA 5,406,843 3,835,454

32,200 Dassault Systemes SA 2,176,733 1,091,165

446,100 France Government Bond 5.5% 04/25/29 665,352 801,630

1,307,600 French Treasury Note 4% 01/12/04 1,866,830 2,186,201

11,675,500 Government of France Index

Linked Bond 3% 07/25/12 16,527,526 20,566,700

6,100 Groupe Danone 1,230,127 1,290,185

40,500 Lagardere S.C.A. 2,643,366 2,586,500

27,800 Peugeot SA 2,223,058 1,782,304

23,800 Sanofi-Synthelabo S.A. 2,473,464 2,287,216

44,200 Suez S.A. 1,234,453 1,206,124

86,400 Vivendi Universal SA 2,224,189 2,193,747

42,160,206 42,358,898 GERMANY (2.0%)

30,000 BASF AG 1,864,584 1,785,756

40,100 Buderus AG 1,525,915 1,455,463

3,257,100 Bundesobligation 4.125% 08/27/04 4,825,970 5,498,267

2,951,100 Bundesobligation 4.5% 08/18/06 4,672,307 5,080,548

22,600 Deutsche Boerse AG 1,278,732 1,422,823

1,990,100 Deutsche Bundesrepublic 5.5% 01/04/31 3,125,720 3,607,678

71,500 Medion AG 3,927,827 3,962,327

21,221,055 22,812,862 NORWAY (1.7%)

51,100 Gjensidige NOR ASA 2,633,434 2,631,439

37,000 Norsk Hydro ASA 2,355,641 2,606,213

94,700 Norske Skogindustrier ASA 2,090,142 2,105,342

7,118,000 Norway(Kingdom Of) 5.75% Bds 11/30/04 1,443,091 1,626,374

5,735,800 Norway(Kingdom Of) 6.75% Bds 01/15/07 1,272,613 1,361,435

102,100 Statoil ASA 1,307,516 1,354,965

191,700 Tandberg ASA 1,980,922 1,739,517

960,200 Telenor ASA 5,650,346 5,772,370

18,733,705 19,197,655 HONG KONG (1.0%)

751,100 Bank Of East Asia, Ltd. 2,290,057 2,021,642

1,223,900 China Mobile (Hong Kong) Ltd. 7,656,382 4,577,361

579,700 China Sthn Airline'h'cny1 209,781 245,441

463,700 Sun Hung Kai Properties Ltd. 5,454,588 4,319,211

15,610,808 11,163,655 NETHERLANDS (0.9%)

150,200 Aegon N.V. 4,043,307 3,038,048

84,970 ING Groep N.V. 2,757,445 2,262,577

63,400 Koninklijke (Royal) Philips Electronics N.V. 1,893,716 1,746,787

89,300 TPG NV 2,374,330 2,276,220

66,200 Vedior N.V. 1,521,084 594,143

12,589,882 9,917,775 SOUTH KOREA (0.8%)

118,200 Hyundai Motor Company Ltd. 3,011,035 4,348,240

24,400 Samsung Electronics, GDR 3,692,645 5,112,027

6,703,680 9,460,267







SWITZERLAND (0.8%)26,700 Actelion Ltd. 1,447,171 1,853,365

81,700 Credit Suisse Group 2,911,377 2,789,094

10,800 Sulzer Medica AG 2,863,266 2,961,833

19,800 UBS AG 1,493,989 1,514,099

8,715,803 9,118,391 SPAIN (0.8%)

64,500 Altadis SA 2,181,943 2,313,415

2,166,209 Spain(Kingdom Of) 4.5% Bds 07/30/04 3,126,632 3,669,257

884,900 Spanish Govt 5.75% 07/30/32 1,290,557 1,646,057

91,200 Telefonica SA 1,489,046 1,283,447

8,088,178 8,912,176 INDIA (0.7%)

129,800 Bharat Petroleum Corp., Indian

Participating Certificates 797,866 910,397

145,700 Hero Honda Motors Ltd., IPC 1,426,430 1,276,000

192,700 Hindustan Petroleum Corp. 1,417,888 1,763,247

307,600 Housing Dev Fin Corp. 3,248,365 3,612,407

4,644 Infosys Technologies Ltd., ADR 543,614 507,838

7,434,163 8,069,889 SWEDEN (0.6%)

40,830 Atlas Copco AB 1,570,735 1,256,362

28,400 Getinge Industrier 895,620 915,008

85,200 Intrum Justitia 612,870 624,570

9,804,000 Sweden Government Bond 6.75% 05/05/14 1,687,037 2,068,991

150,200 Telefonaktiebolaget LM Ericsson, ADR 2,084,154 1,591,717

6,850,416 6,456,648 RUSSIA (0.6%)

28,900 LUKoil 2,265,413 2,802,711

560,800 Ministry Finance Russia

Unsub 10% 06/26/07 Ser Regs E 867,403 1,004,310

122,100 Unified Energy System 2,010,117 2,472,678

5,142,933 6,279,699 ITALY (0.5%)

157,700 Enel S.p.A. 1,229,884 1,290,469

789,000 IntesaBci S.p.A. 2,029,679 2,616,419

75,500 Luxottica Group S.p.A., ADR 1,728,198 1,620,375

4,987,761 5,527,263 INDONESIA (0.4%)

5,215,200 HM Sampoerna 2,374,885 3,389,891

3,781,500 PT Bank Central Asia Tbk 1,440,928 1,660,799

3,815,813 5,050,690 BERMUDA (0.4%)

39,000 Ace Ltd. 2,057,166 1,799,123

92,000 Marvell Technology Group Ltd. 3,381,674 2,728,133

1,650 Tyco International Ltd. 35,719 44,311

5,474,559 4,571,567 BRAZIL (0.4%)

41,900 Aracruz Celulose S.A., ADR 966,403 1,222,723

48,200 Brasil Telecom Participacoes S.A., ADR 1,989,348 1,913,571

53,300 Cia de Bebidas das Americas 964,639 1,303,986

3,920,390 4,440,280


LUXUMBERG (0.4%)726,400 Salomon Smith Barnptg Cert. 05/01/2004 4,876,731 4,324,639

DENMARK (0.3%)30,900 Danisco A/S 1,551,793 1,652,193

19,200 ISS A/S 1,489,059 1,088,501

3,385,100 Kingdom Of Denmark 5% 11/15/03 713,111 765,761

1,335,300 Kingdom of Denmark 7% 11/10/24 345,425 381,122

4,099,388 3,887,577 SINGAPORE (0.3%)

275,300 Flextronics International Ltd. 4,142,826 3,545,081

TAIWAN (0.3%)1,220,300 Taishin Financial Holdings Co. Ltd,

Equity Linked Note 790,709 998,395

476,800 Taiwan Semiconductor Ltd.,

Taiwan Participating Certificates 1,034,708 923,009

42,282 Taiwan Semiconductor Manufacturing Co. Ltd. 816,990 468,685

214,938 United Microelectronics Corp., ADR 2,395,428 1,135,504

5,037,835 3,525,593 SOUTH AFRICA (0.3%)

116,400 Sappi Ltd. 1,862,904 2,445,055

3,379,000 Sth Africa(Rep Of) 13% 08/31/10 588,969 698,932

2,451,873 3,143,987 AUSTRALIA (0.3%)

1,295,200 New South Wales Treasury 7%, 04/01/2004 1,099,423 1,175,325

45,500 News Corporation Ltd., ADR 1,426,413 1,877,919

2,525,836 3,053,244 MALAYSIA (0.2%)

305,000 Hong Leong Bank Berhad 584,000 567,890

4 Malaysian Large Cap Basket Market

Participation Certificates 1,569,117 1,327,602

585,000 Public Bank BHD 572,080 629,334

2,725,197 2,524,826 THAILAND (0.2%)

2,416,500 Siam Commercial Bank PCL 2,381,058 2,532,686

MEXICO (0.2%)721,700 Telefonos de Mexico SA de CV Ser. L 1,862,408 1,821,917

FINLAND (0.2%)69,000 Nokia Corp., ADR 1,676,487 1,681,577

VENEZUELA (0.2%)86,400 Cia Anonima Nacional Telefonos

de Venezuela - CANTV 1,469,274 1,711,671

AUSTRIA (0.1%)15,300 Erste Bank der oesterreichischen

Sparkassen AG 1,486,797 1,619,281





HUNGARY (0.1%)91,775,000 Hungary Gov't 6.25% 06/12/07 518,410 619,718

42,700 OTP Bank Rt. 540,857 660,127

1,059,267 1,279,845 TURKEY (0.1%)

89,601,900 Akbank 579,572 466,775

70,900 Republic Of Turkey 11.875% 01/15/30 106,363 117,050

685,935 583,825 PHILIPPINES (0.1%)

2,760,368 SM Prime Holdings Inc. 547,646 386,169

IRELAND (0.1%)7,743 CRH PLC 155,605 150,739

Total Bonds & Equities (88.9%) 1,096,178,642 1,008,929,090

DERIVATIVE INSTRUMENTS (Capital)

Foreign Currency Forward Contracts(Capital) (0.2%) (see Schedule 1) 1,985,188

Total Investments (Capital) (89.1%) 1,096,178,642 1,010,914,278

DERIVATIVE INSTRUMENTS (Income)

Futures Contracts(Income) (-0.1%) (see Schedule 2) (861,156)

Interest Rate Swap Contracts(Income) (0.1%) (see Schedule 3) 1,159,393

Total Investments (89.1%) 1,011,212,515

Other Assets (net) (10.9%) 129,704,506

Total Net Assets (100.0%) 1,140,917,021


Schedule 1Foreign Currency Forward Contracts (Capital) (0.2%)

Due Credit MarketContracts Pay Receive Date Rating Value $

3 (8,162,137) US$ 14,602,162 Australian$ 20-Mar-03 A-1+ (45,192)*1 (240,750,000) Japanese Yen 3,108,457 Canadian$ 20-Mar-03 A-1+ (98,089)*1 (7,518,186) US$ 11,724,611 Canadian$ 20-Mar-03 A-1+ (132,473)*2 (61,569,244) US$ 60,154,824 Euro 20-Mar-03 A-1+ 2,113,044 * 1 (34,062,373) US$ 21,417,892 British Pound 20-Mar-03 A-1+ 388,872 * 1 (1,846,558) Euro 227,425,776 Japanese Yen 20-Mar-03 A-1+ (16,704)*1 (1,524,032) US$ 1,841,029,700 Korean Wan 20-Mar-03 A-1+ 27,327 *1 (6,209,144) US$ 44,780,344 Norwegian Krone 20-Mar-03 A-1+ 288,910 *1 (6,745,612) US$ 60,073,051 Swedish Krone 20-Mar-03 A-1+ 209,846 *1 (1,430,730) US$ 49,746,474 Taiwanese$ 20-Mar-03 A-1+ 27,173 *1 (1,400,000) Euro 1,432,918 US$ 20-Mar-03 A-1+ (49,177)*1 (2,778,988,441) Japanese Yen 23,004,872 US$ 20-Mar-03 A-1+ (728,349)*

Total Foreign Currency Forward Contracts Value 1,985,188

Schedule 2Futures Contracts (Income) (-0.1%)

Expiry Exercise Market Futures Contracts Date Country Price $ Value $

Hang Seng Stock Index 27 29 Jan 2003 Hong Kong 2,586,375 2,527,746 Tse Topix Stock Index 15 13 Mar 2003 Japan 1,710,235 1,657,091 Korean Kospi 200 Index 35 13 Mar 2003 South Korea 2,108,624 1,844,379 S&P 500 Stock Index 57 20 Mar 2003 USA 20,081,229 19,689,755 Sgx Nikkei 225 Dow Index 27 13 Mar 2003 Japan 1,558,298 1,512,828 Sgx Msci Taiwan Index 58 30 Jan 2003 Taiwan 1,752,599 1,704,405

29,797,360 28,936,204 Exercise Price 29,797,360 Total Futures Contracts Value (861,156)

Schedule 3Interest Rate Swap Contracts (Income) (0.1%)

Due Credit MarketContracts Notional Pay Receive Date Rating Value $

1 10,000,000 1 Month USD LIBOR Bear Stearns U.S.High Yield Index 1-Aug-03 A-1 562,316

1 10,000,000 1 Month USD LIBOR Bear Stearns U.S.High Yield Index 1-Aug-03 A-1 124,280

1 7,500,000 1 Month USD LIBOR Bear Stearns U.S.High Yield Index 1-Sep-03 A-1 90,262

1 1,240,000 1 Month USD LIBOR Lehman U.S.High Yield Index 1-Apr-03 A-1 23,358

1 2,065,000 1 Month USD LIBOR Lehman U.S.High Yield Index 1-Mar-03 A-1 39,846

1 8,660,000 1 Month USD LIBOR Lehman U.S.High Yield Index 1-Aug-03 A-1 168,237

1 2,400,000 1 Month USD LIBOR Lehman U.S.High Yield Index 1-Sep-03 A-1 44,266

1 1,580,000 1 Month USD LIBOR Lehman U.S.High Yield Index 31-Mar-03 A-1 30,798

1 4,000,000 1 Month USD LIBOR Lehman U.S.High Yield Index 30-May-03 A-1 76,030

Total Interest Rate Swap Contracts Value 1,159,393



The accompanying notes are an integral part of these financial statements. All common shares unless otherwise noted. Percentages shown in brackets relate investmentsat market value to total net assets of the fund. *Hedge


CI International Balanced FundFinancial Statements

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

Assets

Investments at market value (Note 2)

Cash

Income taxes recoverable

Daily variation margin

Receivable for unit subscriptions

Receivable for securities sold

Dividends and accrued interest receivable

Liabilities

Payable for securities purchased

Payable for unit redemptions

Distributions payable

Net assets and unitholders’ equity

Net asset value per unit:

Class A

Class F

Class I

Number of units outstanding

Class A

Class F

Class I

Securities Lending (Note 5)

Loaned

Collateral

Income

Approved on behalf of the Board of Directors:

G. Raymond ChangDirector

William T. HollandDirector

Income

Dividends

Interest

Gain (loss) on derivative investments

Less foreign withholding taxes

Expenses

Management fees (Note 4)

Administrative (Note 4)

Custody

Legal

Audit

Goods and services tax

Net income (loss) for the year

Realized and unrealized

gain (loss) on investments

Realized gain (loss) on investments (a)

Change in unrealized appreciation

(depreciation) of investments

Net gain (loss) on investments

Increase (decrease) in net assets

from operations

(a) Realized gain (loss) on investments

Proceeds from sale of investments including

foreign exchange gain (loss) (b) (c)

Investments at cost, beginning of year

Investments purchased

Change in cost of short-term notes held

Investments at cost, end of year

Cost of investments sold

Realized gain (loss) on investments

(b) Proceeds on sales of short-term

notes sold during the year

not included above

(c) Foreign exchange gain (loss)

included above

Statements of Operations for the years ended December 31 (000’s)

2002 $ 2001 $

1,011,213 1,427,101

125,544 156,497

21 21

12,171 25,116

322 2,837

4,532 654

4,327 6,573

1,158,130 1,618,799

16,091 352

1,047 1,378

75 75

17,213 1,805

1,140,917 1,616,994

13.84 15.93

7.21 8.20

9.62 10.74

35,824,298 41,798,669

85,738,415 114,522,177

2,760,592 1,188,482

43,221 281,231

46,230 298,390

434 109

Statements of Net Assets as at December 31 (in 000’s except forper unit amounts and units outstanding)

Net assets, beginning of year

Capital Transactions

Proceeds from units issued

(including reinvested distributions)

Amounts paid for units redeemed

Distributions to investors

Distribution from net realized gains

Distribution from net income

Acquisition of net assets on

fund merger (Note 1)

Increase (decrease) in net assets

from operations

Net assets, end of year

2002 $ 2001 $

1,616,994 1,842,743

4,004,145 2,356,183

(4,325,289) (2,252,182)

(321,144) 104,001

- -

- -

- -

28,857 -

(183,790) (329,750)

1,140,917 1,616,994

Statements of Changes in Net Assets for the years ended December 31 (000’s)

2002 $ 2001 $

14,502 10,775

26,090 38,143

(60,779) (74,412)

(1,409) (1,478)

(21,596) (26,972)

19,938 24,795

4,845 5,688

88 201

27 49

39 39

1,727 2,149

26,664 32,921

(48,260) (59,893)

(56,452) (124,270)

(79,078) (145,587)

(135,530) (269,857)

(183,790) (329,750)

1,269,683 1,610,281

1,431,843 1,084,915

990,471 2,081,479

- -

2,422,314 3,166,394

1,096,179 1,431,843

1,326,135 1,734,551

(56,452) (124,270)

- -

(2,680) -

N o t e s t o t h e F i n a n c i a l S t a t e m e n t s 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

Notes to the Financial Statements

1. THE FUNDS

The following funds are open-ended mutual fund trusts created under the laws

of Ontario by declarations of trust:

Fund Names Dated

CI American Managers RSP Fund July 17, 2000

CI American Small Companies Fund September 9, 1985

CI American Small Companies RSP Fund July 17, 2000

CI American Value RSP Fund July 31, 2001

CI Canadian Bond Fund January 20, 1993

CI Emerging Markets Fund September 10, 1991

CI Emerging Markets RSP Fund February 24, 2000

CI European Fund September 10, 1991

CI European RSP Fund July 31, 2001

CI Explorer Fund September 24, 1987

CI Global Biotechnology RSP Fund February 24, 2000

CI Global Bond Fund August 31, 1992

CI Global Bond RSP Fund August 16, 1993

CI Global Boomernomics® RSP Fund October 29, 1998

CI Global Consumer Products RSP Fund February 24, 2000

CI Global Energy RSP Fund February 24, 2000

CI Global Financial Services RSP Fund August 5, 1999

CI Global Fund February 28, 1986

CI Global Health Sciences RSP Fund August 5, 1999

CI Global Managers RSP Fund February 24, 2000

CI Global RSP Fund August 16, 1993

CI Global Small Companies Fund April 7, 1993

CI Global Small Companies RSP Fund July 17, 2000

CI Global Technology RSP Fund August 5, 1999

CI Global Telecommunications RSP Fund August 5, 1999

CI Global Value Fund June 12, 1996

CI Global Value RSP Fund July 31, 2001

CI International Balanced Fund September 29, 1994

CI International Balanced RSP Fund October 14, 1994

CI International Fund August 5, 1999

CI International RSP Fund February 24, 2000

CI International Value Fund June 12, 1996

CI International Value RSP Fund July 31, 2001

CI Japanese RSP Fund February 24, 2000

CI Money Market Fund October 1, 1990

CI Pacific Fund October 31, 1981

CI Pacific RSP Fund February 24, 2000

CI US Money Market Fund January 30, 1995

CI Value Trust RSP Fund December 31, 2001

Sometimes referred to herein individually as “Fund”, and collectively as

the “Funds”.

CI Mutual Funds Inc. is the manager of each Fund.

Class A units were offered to investors on the date of the formation of the Funds.

Class F units were offered to investors commencing on July 17, 2000, except for

the following funds of which Class F units were offered to investors commencing

on July 31, 2001.

Fund Names

CI Global Energy RSP Fund

CI Money Market Fund

CI European Fund

CI International Value Fund

CI Global Bond RSP Fund

Class I units were offered to investors for the following Funds.

Fund Names Dated

CI American Small Companies Fund July 31, 2001

CI Canadian Bond Fund July 31, 2001

CI Emerging Markets Fund July 31, 2001

CI Global Fund July 31, 2001

CI Global RSP Fund July 31, 2001

CI Global Bond Fund July 31, 2001

CI Global Boomernomics RSP Fund July 31, 2001

CI Global Small Companies Fund July 31, 2001

CI Global Value Fund July 31, 2001

CI International Balanced Fund July 31, 2001

CI International Balanced RSP Fund July 31, 2001

CI International Value Fund July 31, 2001

CI Money Market Fund July 31, 2001

CI Pacific Fund July 31, 2001

CI Pacific RSP Fund July 31, 2001

CI Value Trust RSP Fund December 31, 2001

Class A units are available to all investors.

Class F units are available to certain investors including those who participate

in fee-based programs through their financial advisers or who are members of

certain groups.

Class I units are available to institutional clients and investors who have entered

into Class I Account Agreement with CI Mutual Fund Inc.



Effective as of the close of business on October 11, 2002 the following funds

were merged.

Non-taxable Mergers

Terminated Funds Continuing Funds

Spectrum RRSP Global Growth Fund CI Global Small Companies

RSP Fund

Spectrum RRSP World

Growth Managers Fund CI Global Managers RSP

Spectrum Global Bond Fund CI Global Bond Fund

Spectrum Canadian Money Market Fund CI Money Market Fund

Spectrum Savings Fund CI Money Market Fund

Spectrum U.S. Dollar Money Market Fund CI US Money Market Fund

CI Latin American RSP Fund CI Emerging Markets RSP Fund

Spectrum RRSP Global Financial CI Global Financial Services

Services Fund RSP Fund

Spectrum RRSP Global Health CI Global Health Sciences

Sciences Fund RSP Fund

Spectrum RRSP Global CI Global Telecommunications

Telecommunications Fund RSP Fund

CI Global Business-to-Business (B2B) CI Global Technology RSP Fund

RSP Fund

CI Global Focus Value Fund CI Global Value Fund

Taxable Mergers

Terminated Funds Continuing Funds

Spectrum Global Growth Fund CI Global Small Companies Fund

Spectrum Global Diversified Fund CI International Balanced Fund

Spectrum Emerging Markets Fund CI Emerging Markets Fund

CI Latin American Fund CI Emerging Markets Fund

The mergers were effected by transferring the net assets of the terminated funds

in exchange for units of the continuing funds. The value of the units of the

continuing funds issued in connection with these mergers was equal to the

market value of the net assets transferred from the terminated funds.

With respect to the non-taxable mergers, each of the terminated and continuing

funds were deemed to have a taxation year end as at October 11, 2002. In

accordance with the Income Tax Act, all unrealized losses and certain unrealized

gains of those funds’ investment portfolios were deemed to be realized at

October 11, 2002. All tax losses available to those funds as at October 11, 2002

expired on that date.

These financial statements do not include the operating results of the terminated

funds prior to the merger date.

The Investment Portfolios for each of the Funds are as at December 31, 2002

and the Statements of Net Assets are as at December 31, 2002 and 2001, if the

Fund was in existence at that time. The Statements of Operations and Changes

in Net Assets for each Fund are for the years ended December 31, 2002 and

2001, except for Funds established during either period, in which case the

information provided is for the period from inception to December 31. The

Statements of Financial Highlights for each Fund are for each of the most

recent five years ended December 31, except where the inception date of a

Fund, or date of first sale of a Class of a Fund, was after January 1, 1998, in

which case the information is provided for the period from inception or date of

first sale, as applicable, to December 31 of that period, if applicable, and for

each year ended December 31 thereafter. The date of inception of each Fund

is shown above.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies of the Funds:

(a) Valuation of Investments

Listed securities are valued on each business day at their latest available sale

price. In the absence of recorded sales on that day, they are valued at the

average of the last recorded bid and ask prices where appropriate. Unlisted

securities are valued on each business day based on price quotations from

recognized investment dealers, or failing that, management’s best estimate.

Short-term fixed income securities are valued at cost which, together with

accrued interest, approximates market value. Mutual Funds are valued on

each business day at their closing net asset value.

(b) Foreign Exchange

Foreign currency amounts are translated into Canadian dollars as follows:

market value of investments, forward currency contracts, other assets and

liabilities at the closing rate of exchange on each business day; income,

expenses and, purchases, sales and settlements of investments at the rate

of exchange prevailing on the respective dates of such transactions.

(c) Investment Transactions and Income Recognition

Investment transactions are accounted for on trade date and any realized

gains and losses from such transactions are calculated on an average cost

basis. Dividend income is recognized on the ex-dividend date and interest

income on the accrual basis. Stock dividends are recorded as dividend

income determined by reference to market value.

(d) Net Asset Value Per Unit

Net asset value per unit for each class is calculated at the end of each day

on which the Fund’s manager is open for business by dividing the net

assets of each class by its outstanding units.

The net asset value of each class is computed by calculating the value of

that class’s proportionate share of the Fund’s assets less that class’s

proportionate share of the Fund’s common liabilities and less class specific

liabilities. Expenses directly attributable to a class are charged to that class.

Other income and expenses are allocated to each class proportionately

based upon the relative net asset value of each class.

(e) Futures, Forward and Option Contracts

Futures, forward and option contracts are valued on each business day

according to the gain or loss that would be realized if the contracts were

closed out, unless daily limits are in effect in which case they are valued

based on the current market value of the underlying interest. Any payments

made to satisfy initial and variation margin are reflected as a receivable

balance in daily variation margin on the Statement of Net Assets. Margin

consisting of assets other than cash is noted in the Statement of Investment

Portfolio. Gains or losses arising from futures, forward and option contracts

which are held as hedges for capital investments are recorded as unrealized

gains (losses) on investments until the contracts are closed or expire. Gains

or losses arising from futures, forward and option contracts not held as

hedges for capital investments are recorded as income (loss) on a daily basis.

3. INCOME TAXES

The Funds qualify as mutual fund trusts under the provisions of the Income Tax

Act (Canada) and, accordingly, are not subject to tax on net income, including net

realized capital gains for the taxation year, which is paid or payable to unitholders

at the end of the taxation year. However, such part of each Fund’s taxable income

and net realized capital gains that is not so paid or payable will be taxable to that

Fund. Income tax on net realized capital gains not paid or payable will be

generally recoverable by virtue of refunding provisions contained in the Income

Tax Act (Canada) and provincial income tax legislation, as redemptions occur.

It is the intention of each Fund to pay all net taxable income and sufficient net

realized capital gains so that the Fund will not be subject to income tax.

Occasionally, a Fund may distribute more than it earns. This excess distribution is

a return of capital and is not taxable to unitholders. Derivative investments are

recorded in the same manner for tax purposes as for accounting purposes.

Net capital losses may be carried forward indefinitely to reduce future net realized

capital gains. Net capital loss amounts appear under “Additional Fund Notes” on

the Statements of Financial Highlights.

4. MANAGEMENT FEES AND OTHER EXPENSES

CI Mutual Funds Inc. is the manager of each Fund and, in consideration of

management fees received, provides management services required in the

day-to-day operations of the Funds including management of the investment

portfolio of the Funds.

The management fee is calculated on the net assets of each Fund at the end of

each business day and is paid daily.

Each Fund also bears all operating and administrative expenses including audit

and legal fees, registry and transfer agency fees, custody fees, expenses relating to

reporting and making distributions to unitholders, all other costs and fees imposed

by statute or regulation and expenses of all communications with unitholders.

To encourage large purchases in the Funds, the manager may reduce the

management fee that it would otherwise be entitled to receive from a Fund

with respect to an investment in a Fund provided that the amount of the

management fee reduction is distributed to the investor for whose benefit the

fees were reduced.

5. SECURITIES LENDING

Certain Funds have entered into a securities lending program with their custo-

dian, Royal Trust Company of Canada ("Royal Trust"). The aggregate market

value of all securities loaned by a Fund cannot exceed 50% of the assets of the

Fund. A Fund will receive collateral of at least 102% of the value of securities

on loan. Collateral will generally be comprised of cash and obligations of or

guaranteed by the Government of Canada or a province thereof, or by the

United States government or its agencies, but may include obligations of other

governments with appropriate credit ratings. Royal Trust has indemnified the

Funds against the credit risk of the borrowers. For those Funds participating in

the program, amounts for securities loaned, the collateral received, and the

income collected appear on the Statement of Net Assets and income from secu-

rities lending is included in "Interest Income" in the Statement of Operations.

6 . RELATED PARTY TRANSACTIONS

Sun Life Financial Services of Canada Inc. (“Sun Life”) owns a significant

interest in CI Mutual Funds Inc. and is therefore considered a related party to the

Funds. The following is a summary of the investments by Sun Life in the Funds

at December 31, 2002.

Fund Names Net Asset Value (ooo’s)

CI Global Bond Fund (Class F) 7,433

CI Global Financial Services RSP Fund (Class A) 411

CI Global Financial Services RSP Fund (Class F) 404

CI Global Health Services RSP Fund (Class A) 354

CI Global Health Services RSP Fund (Class F) 348

7 . PORTFOLIO TRANSACTIONS

A copy of the Statement of Portfolio Transactions (unaudited) for any Fund

for the year ended December 31, 2002 is available without charge upon written

request to the manager, CI Mutual Funds Inc., CI Place, 151 Yonge Street,

Eleventh Floor, Toronto, Ontario M5C 2W7.



MANAGEMENT’S RESPONSIBILITY

FOR FINANCIAL REPORTING

The accompanying financial statements have been prepared by CI Mutual

Funds Inc., the manager of the Fund, and approved by the Board of

Directors of the manager. The Fund’s manager is responsible for the

information and representations contained in these financial statements

and other sections of the Annual Report.

CI Mutual Funds Inc. maintains appropriate processes to ensure that

relevant and reliable financial information is produced. The financial

statements have been prepared in accordance with accounting principles

generally accepted in Canada and include certain amounts that are based

on estimates and judgments. The significant accounting policies which

management believes are appropriate for the Fund are described in Note 2

to the financial statements.

PricewaterhouseCoopers LLP are the external auditors of the Fund,

appointed by the unitholders. They have audited the financial statements

in accordance with Canadian generally accepted auditing standards to

enable them to express to the unitholders their opinion on the financial

statements. Their report is set out at the right.

President Chief Financial Officer

CI MUTUAL FUNDS INC. CI MUTUAL FUNDS INC.

AUDITORS’ REPORT

To the unitholders of the CI Funds listed in note 1 to the financial statements

(the "Funds")

We have audited the Investment Portfolios of each of the Funds as at

December 31, 2002 and the Statements of Net Assets, Operations, Changes

in Net Assets and Financial Highlights as at and for the periods indicated

in note 1. These financial statements are the responsibility of the Funds'

management. Our responsibility is to express an opinion on these financial

statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted

auditing standards. Those standards require that we plan and perform an

audit to obtain reasonable assurance whether the financial statements are

free of material misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used

and significant estimates made by management, as well as evaluating the

overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material

respects, the financial position of each of the Funds, the results of each of

their operations, the changes in each of their net assets and each of their

financial highlights as at and for the periods indicated in note 1 in

accordance with generally accepted accounting principles.

Toronto, Ontario PRICEWATERHOUSECOOPERS LLP

January 31, 2003 Chartered Accountants

M a n a g e m e n t a n d A u d i t R e p o r t s 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

Management and Audit Reports

NOTICE: Should you require additional copies of this Annual Report or havereceived more than one copy, please contact CI Mutual Funds Inc. (the“Manager”) or your financial adviser.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus beforeinvesting. 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 perform-ance data assume reinvestment of all distributions or dividends and do not takeinto account sales, redemption, distribution or optional charges or income taxespayable by any securityholder that would have reduced returns. Mutual fundsare not guaranteed, their values change frequently and past performance maynot be repeated. Mutual fund securities are not covered by the Canada DepositInsurance Corporation or by any other government deposit insurer.

The commentaries contained herein are provided as a general source of information and should not be considered personal investment advice or anoffer or solicitation to buy or sell securities. Every effort has been made toensure that the material contained in these commentaries is accurate at thetime of publication. However, the Manager cannot guarantee its accuracy orcompleteness and accepts no responsibility for any loss arising from any use ofor reliance on the information contained herein.

SIMPLIFIED PROSPECTUS: The Simplified Prospectus and AnnualInformation Form of a Fund are renewed annually. The Manager would bepleased to provide, without charge, the most recent Simplified Prospectus uponrequest to its Toronto office.

DISTRIBUTION OR DIVIDEND REINVESTMENT: Distributions or dividends from the Funds are automatically reinvested, free of any sales commissions or charges, in additional securities of the relevant Fund, unlessyou otherwise direct. You may withdraw from participation in the reinvestmentplan at any time by delivering a written request to your financial adviser or tothe Manager.

REDEMPTION OF SECURITIES: Securities may be redeemed by security-holders on any business day by delivering to your financial adviser or the Managera redemption request in writing, or in such other form as permitted by yourfinancial adviser. If your redemption request is received by the Manager on anyValuation Date prior to 4:00 p.m. (Eastern time), then your securities beingredeemed will be priced at the next valuation time following receipt by theManager of the redemption request. If the proceeds of redemption exceed$10,000 or are to be paid to someone other than the registered owner, your signature must be guaranteed by a bank, trust company, investment dealer, orbroker. If certificates representing the securities to be redeemed have beenissued, the redemption request must be accompanied by the certificates, properly endorsed for redemption with the signature guaranteed in the mannerdescribed above. If the registered owner is a corporation, partnership, agent,fiduciary or surviving joint owner, additional documentation may be required.

®Boomernomics, Harbour Funds, CI Funds, the CI Funds logo design, BPIFunds, CI Sector Funds and Global Managers are registered trade marks of CI Mutual Funds Inc. ™Landmark Funds, Signature Funds and AmericanManagers are trademarks of CI Mutual Funds Inc.

Board of Governors’ Letter

Legal Notice

Your CI Funds’ Board of Governors is pleased to report on its activities inrespect of the year ended December 31, 2002. The Governors are appointedpursuant to the Declarations of Trust governing the Funds that are trusts, andconstitute the board of directors of CI Sector Fund Limited.

The Governors’ mandate is to consult with CI Mutual Funds Inc. (the “Manager”) and any investment advisers (referred to as “Subadvisers”) in matters pertaining to investment policy; receive and review periodic reports concerning the investment of the Funds’ assets, the issue and redemption of securities and distributions to securityholders; and to review and advise or consent, if appropriate, with respect to any other matter required by theDeclarations of Trust and by applicable securities laws, regulations and rules. The Governors met quarterly.

The Governors have reviewed, commented on and approved the CI Code ofEthics and Conduct, which establishes rules of conduct designed to ensure fairtreatment of the Funds’ securityholders and that, at all times, the interests of thethe Funds and their securityholders are placed above personal interests of employees, officers and directors of the Manager and each of its subsidiaries and affiliates, the Subadvisers, and the Governors, through the application ofthe highest standards of integrity and ethical business conduct. The objectiveis not only to remove any potential for real conflict of interest but to avoid any perception of conflict.

The independent Governors report that management has been open and cooperative, permitting the Governors to meet with Subadvisers, to meet withindividual department heads and personnel to review control mechanisms andcompliance procedures, including those relating to the personal securities

trading activity of employees, and to consider other matters that affect theFunds, such as customer complaints. The personal trading rules under the CI Code of Ethics and Conduct require prior clearance of personal trades andrestrict the ability of staff to trade any securities held by the Funds. The three independent Governors comprise the Audit Committee of the Boardof Governors. The Audit Committee independently reviewed, with the Fund’s auditors, the planning, scope and results of the audit of the financial statementsof the Funds for the year 2002, and reported to the Board of Governors. The Board of Governors has received and accepted the 2002 Annual Reports of the Funds.

The Manager's year 2002 report on compliance with the CI Code of Ethics andConduct has been provided to the Governors in a timely and satisfactory manner.

Stephen T. MooreCHAIR, CI FUNDS BOARD OF GOVERNORS

March 6, 2003

Members of the Board of GovernorsStephen T. Moore, ChairJasmine HerltThomas L. JarmaiPeter W. Anderson, President, CI Mutual Funds Inc. (commencing February 2003)

Head OfficeCI Place, 151 Yonge Street, Eleventh FloorToronto, Ontario M5C 2W7Tel: 416-364-1145Toll Free: 1-800-268-9374Client Services Team: 1-888-771-2999

Sales OfficesCalgary Tel: 403-205-4396 Toll Free: 1-800-776-9027Halifax Tel: 902-422-2444 Toll Free: 1-888-246-8887Montreal Tel: 514-875-0090 Toll Free: 1-800-268-1602Vancouver Tel: 604-681-3346 Toll Free: 1-800-665-6994CI Teleservice: 1-800-275-3672 Automated account informationE-mail: [email protected] • www.cifunds.com

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