Portfolio Review – Second Quarter 2018

Q2

Portfolio Review – xxx Quarter 20xx

Evolution 30i70e Model Portfolio

21

Portfolio Review – Second Quarter 2018 as at June 30, 2018

Evolution 30i70e Model PortfolioStandard geographic asset allocation and blend of investment styles including alpha

OverviewDiversified portfolios capture gains from asset classes and security types that are performing well, while limiting exposure to those that are underperforming. Evolution’s portfolios are diversified not only across asset classes such as equities, bonds and real estate, but also by country, market capitalization, industry sector and investment style. CI Multi-Asset Management combines its portfolio construction expertise with ongoing comprehensive research and recommendations from State Street Global Advisors, one of the world’s largest investment management companies, to create portfolios designed to capture evolving opportunities in the various asset classes. Each Evolution portfolio consists of a number of United and CI mutual funds. The information in the Portfolio Performance and Activity sections below is an aggregate of the underlying funds that make up the portfolio.

Portfolio PerformanceBased on net returns and representative of Class E shares of the underlying United Funds and Class A shares of the underlying Cambridge Canadian Equity Corporate Class, Synergy American Corporate Class and Signature Emerging Markets Corporate Class funds. Returns are rounded to one decimal place.

1 Month 3 Months 6 Months 1 Year 3 Years 5 Years Since Inception (September 2008)

0.6% 1.8% 0.4% 4.2% 4.9% 7.9% 7.1%

ActivityThis report is designed to provide you with an up-to-date look at the Evolution 30i70e Model Portfolio, including the allocations by type of underlying investment and geographic region.

28.9%19.7%14.0%13.5%6.1%5.9%5.2%3.9%2.8%

— — — — — — — — —

79.0%13.7%7.3%

— — —

33.6%32.7%14.8%4.3%3.7%3.7%2.0%1.9%1.6%1.6%

— — — — — — — — — —

— — — — — — — — — — ——

Equity Market Cap

Underlying Investments

Equity Industry Sector

Geographic Regions

Capitalisation boursière

Placements sous-jacents

Pondération des actions par secteur

Régions géographiques

28,5 %18,1 %13,2 %13,0 %8,2 %6,8 %5,4 %4,0 %2,8 %

— — — — — — — — —

79,4 %19,2 %1,4 %

— — —

33,0 %31,1 %18,2 %4,5 %3,9 %3,5 %1.6 %1.5 %1.4 %1.2 %

— — — — — — — — — —

— — — — — — — — — — ——

18.9%13.2%11.1%11.0%

9.4%9.2%8.4%6.7%6.3%3.6%1.4%0.8%

19,2 %13,7 %11,6 %11,1 %

9,5 %9,1 %7,5 %6,5 %6,0 %4,0 %1,6 %0,2 %

U.S. equityCanadian equityCanadian bondEuropean equityCashForeign bondAsian equityEmerging markets equityOther equity

CanadaU.S.Cash and other countriesEmerging marketsJapanU.K.GermanyFranceSwitzerlandCayman Islands

Financial servicesInformation technologyIndustrialsReal estateEnergyConsumer discretionaryHealth careMaterialsConsumer staplesUtilitiesTelecommunication servicesOther

Large-capMid-capSmall-cap

22

Portfolio Review – Second Quarter 2018 as at June 30, 2018

Evolution 30i70e Model PortfolioStandard geographic asset allocation and blend of investment styles including alpha

Portfolio Target Allocations

Income and Real Estate 30%

Canadian Fixed Income Corporate Class 17%

Real Estate Investment Corporate Class 7%

Enhanced Income Corporate Class 4%

Global Fixed Income Corporate Class 2%

Canadian Equity 26%

Cambridge Canadian Equity Corporate Class 8%

Canadian Equity Alpha Corporate Class 7%

Canadian Equity Value Corporate Class 6%

Canadian Equity Small Cap Corporate Class 5%

U.S. Equity 22%

Synergy American Corporate Class 8%

US Equity Value Corporate Class 5%

US Equity Small Cap Corporate Class 5%

US Equity Alpha Corporate Class 4%

International Equity 22%

International Equity Growth Corporate Class 6%

Signature Emerging Markets Corporate Class 6%

International Equity Value Corporate Class 5%

International Equity Alpha Corporate Class 5%

Top Ten Holdings

Canada Gov't Bond 1.25% 01Feb20 0.9%

Microsoft Corp. 0.8%

Apple Inc. 0.8%

Ontario Province 3.5% 02Jun24 0.7%

Canada Gov't Bond 1.75% 01May20 0.7%

SNC-Lavalin Group Inc. 0.7%

Atco Ltd. 0.6%

Gilead Sciences 0.6%

Canada Gov't Bond 23Aug18 Tbill 0.6%

Ontario Province 2.6% 02Jun25 0.5%

23

Portfolio Review – Second Quarter 2018 as at June 30, 2018

Evolution 30i70e Model PortfolioStandard geographic asset allocation and blend of investment styles including alpha

Performance Summary• The portfolio gained 1.8% during the second quarter of 2018,

underperforming its blended benchmark (30% FTSE TMX Universe Bond Index, 35% S&P/TSX Index and 35% MSCI World Index), which rose 3.8%.

Contributors to Performance• Real Estate Investment Corporate Class and our overall

allocations to Canadian and U.S. equities made the biggest contributions to relative performance.

• International Equity Growth Corporate Class outperformed the MSCI EAFE Index due to strong stock selection in financials and its underweight position in that sector.

Detractors from Performance• Global Fixed Income Corporate Class detracted from relative

performance as most major currencies depreciated against the Canadian dollar.

• Cambridge Canadian Equity Corporate Class underperformed the broader Canadian equity market due to its holdings in financials and energy, as well as to underweight exposure to energy.

• U.S. Equity Alpha Corporate Class detracted from relative value due to its holdings in in consumer discretionary and an underweight allocation to energy.

• International Equity Alpha Corporate Class detracted due to its holdings in health care and consumer staples.

Portfolio Activity• The portfolio’s asset allocation at the end of the quarter was

19.9% fixed income, 65.8% equity, 8.2% REITs and 6.1% cash.

• During the quarter, we decreased our high-yield bond allocation due to tight credit spreads and our overall defensive positioning. We increased our exposure to Canadian equities due to favourable relative valuations to the U.S. market.

Market Outlook• The global economy has improved consistently since 2009, albeit

at slow rate, and was one of the longest recoveries in history. Investors have become accustomed to long-term market stability and low interest rates, and appear to have become complacent while some fundamentals begin to shift. New tariffs introduced by the United States – and the resulting retaliatory measures taken by affected countries – are changing the face of global trade. Meantime, interest rates are rising, credit conditions are tightening and growth in emerging markets is slowing. Some equity markets, notably China, have entered a bear market. Nonetheless, global stock and credit-market valuations continue to be elevated, an indication that investors are basing their decisions on the past, not the future.

• We are concerned this late cycle could be extended and defensive strategies may cause short-term underperformance. We are satisfied with the current equity weightings in our portfolios, which are relatively neutral to their benchmarks. Our defensive positioning is generally expressed through derivatives that provide a favourable, asymmetric payoff. Within equities, value stocks and the Canadian market have been out of favour and thus offer attractive value. Sovereign bonds appear to have found support at current yields, despite rising interest rates. We are benefiting from market growth, but we anticipate significant additional growth when we begin to deploy cash once selected securities become even more attractively valued.

Portfolio management teamsIn the Evolution Private Managed Accounts program

Evolution Private Managed Accounts is a program that provides strategic asset allocation across a series of portfolios comprised of United and CI mutual funds and is managed by CI Investments Inc. (“CII”). Evolution Private Managed Accounts is not a mutual fund. CII provides portfolio management and investment advisory services as a registered advisor under applicable securities legislation.

Evolution Private Managed Accounts is available through Assante Financial Management Ltd. and Assante Capital Management Ltd., affiliates of CII. The principal business of CII is the management, marketing, distribution and administration of mutual funds, segregated funds and other fee-earning investment products for Canadian investors. If you invest in CII products, CII will earn ongoing asset management fees in accordance with applicable prospectus or other offering documents.

All commentaries are published by CII, the manager of all the funds described herein. They are provided as a general source of information and should not be considered personal investment advice or an offer or solicitation to buy or sell securities. Every effort has been made to ensure that the material contained in the commentaries is accurate at the time of publication. However, CII cannot guarantee their accuracy or completeness and accepts no responsibility for any loss arising from any use of or reliance on the information contained herein.

This report may contain forward-looking statements about the funds, future performance, strategies or prospects, and possible future fund action. These statements reflect the portfolio managers’ current beliefs and are based on information currently available to them. Forward-looking statements are not guarantees of future performance. We caution you not to place undue reliance on these statements as a number of factors could cause actual events or results to differ materially from those expressed in any forward-looking statement, including economic, political and market changes and other developments.

All indexes quoted in this document are reported on a total return basis, which assumes the reinvestment of all dividends and other cash distributions.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments and the use of an asset allocation service. Please read the prospectus of the mutual funds in which investment may be made under the asset allocation service before investing. The indicated rates of return are the historical annual compounded total returns assuming the investment strategy recommended by the asset allocation service is used and after deduction of the fees and charges in respect of the service. The returns are based on the historical annual compounded total returns of the participating funds including changes in share unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder in respect of a participating fund that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ™Signature Global Asset Management, Signature Funds and CI Multi-Asset Management are trademarks of CII.® Evolution, Cambridge, CI Investments, the CI Investments design, Harbour Advisors and Harbour Funds are registered trademarks of CII. Cambridge Global Asset Management is a division of CII. Certain funds associated with Cambridge Global Asset Management are sub-advised by CI Global Investments Inc., a firm registered with the U.S. Securities and Exchange Commission and an affiliate of CII. ™1832 Asset Management L.P. and the 1832 Asset Management design are trademarks of The Bank of Nova Scotia, used under licence. All trademarks used under licence. Published August 2018.

1807-1408_E (08/18)

For more information on Evolution Private Managed Accounts, please contact your advisor or visit www.assante.com