CI Investment ConsultingNeal Kerr, Senior Vice-President

Alfred Lam, Vice-President & Portfolio ManagerYoonjai Shin, Director

Agenda

• Industry trends, CI’s multi-manager excellence• Advantages of CI’s managed solutions• Challenges in the markets and how to navigate

Destination investing

Average advisors

Focus:Outperformance

Value propositions:Fund selectionTactical shifts

Risk:Underperformance

Successful advisors

Focus: Relationship

Value propositions:Planning

Asset locationBehavioural coaching

Risk: Capacity

CI’s income & balanced (wealth accumulation) solutions

Investment Consulting

Signature Harbour Cambridge Black Creek

DiversifiedIncome

Portfolio Series High Income

Portfolio Select Series

Diversified Yield High Income

Balanced Portfolio Series Canadian Balanced

Growth & Income Canadian Asset Allocation

Global Balanced

Portfolio Select Series

Income & Growth Global Growth & Income

G5|20 Series Global Income & Growth

Assets ($ billion)*(Total = $61.3)

$27.7 $23.8 $5.9 $2.9 $1.0

*As of August 2014

Managed solution landscapeFund company Assets ($ billion) 3-year CAGR (%)

RBC 49 23CIBC 41 19TD 37 22CI Investments 24 34Scotia 24 22BMO 20 29Investors Group 20 8Great-West Life 17 5Desjardins 15 17National Bank 11 20Top 10 258 (77%) 20

Source: Investor Economics, Dec. 2013

Multi-manager excellence

CI Investment Consulting

“We create investment solutions for investors and build

relationships with advisors.” – CI Investment Consulting

What do we manage?

$28 billion in assets under management

CI Investment Consulting

Name Title CredentialsYears of industry

experience

Alfred Lam VP & Portfolio Manager CFA, MBA, BComm 14Yoonjai Shin Director CFA, BA Economics 11Lewis Harkes Senior Analyst CFA, BA Economics 10Marchello Holditch Senior Analyst CFA, BMath (Honours) 5Andrew Ashworth Analyst Level II CFA, BMOS Finance 4

ResponsibilitiesPortfolio management Alfred, YoonjaiTrading/operations Yoonjai, Nick Asnani, AndrewManager selection Alfred, YoonjaiDue diligence Yoonjai, Alfred, Marchello, Lewis, AndrewPerformance analysis & reporting Lewis, AndrewCommunications Alfred, Yoonjai, Marchello

Organizational structure

Total return = Asset mix + Alpha + Market beta + Currency – Tax – Fees

Optimize

Maximize Manage

Manage/reduce Minimize

Reduce

Total return equation

Portfolio Series, Best Fund of Funds Award – 2011

Portfolio Series, Best Fund of Funds Award – 2012

Portfolio Select Series, Best Fund of Funds Award – 2013

Industry recognition

Stock market valuations

Source: TD Securities

Price-Earnings MultiplesBased on 12 Month Forward Operating Earnings

Bottom Up Earnings Based on CPMS (TSE) and IBES (S&P) ConsensusM84 JUL 2014

26 26

24 24

22 22

20 20

18 18

16 16

14 14

12 12

10 10

8 886 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16

TSXS&P 500

15.615.6

Suppressed volatility

0

10

20

30

40

50

60

70

80

90

8/31/2004 8/31/2005 8/31/2006 8/31/2007 8/31/2008 8/31/2009 8/31/2010 8/31/2011 8/31/2012 8/31/2013 8/31/2014

VIX Index: August 31, 2004 - August 31, 2014

Equity market return expectations

Equity return = Risk-free return + Risk premium

Historical Today

Risk-free 2-4% 0-1%

Risk premium 4-6% 4-6%

Total return 6-10% 4-7%

Dividends 2-3% 2-4%

Earnings growth 4-8% 2-5%

Implications

• As long as rates stay low:

• Incentive for business to grow is less

• Incentive for business to hire is less

• Low wage inflation

• Market volatility is low

When will interest rates change?

• Two years later?!

• When household and sovereign debts return to normal

Extreme volatility in the bond markets

16X p/E

22X p/E

Government of Canada benchmark bond yields – 5 YearAugust 29, 2013 - August 29, 2014

8/31/2

012

9/19/2

012

10/8/2

012

10/27/2

012

11/15/2

012

12/4/2

012

12/23/2

012

1/11/2

013

1/30/2

013

2/18/2

013

3/9/2

013

3/28/2

013

4/16/2

013

5/5/2

013

5/24/2

013

6/12/2

013

7/1/2

013

7/20/2

013

8/8/2

013

8/27/2

013

9/15/2

013

10/4/2

013

10/23/2

013

11/11/2

013

11/30/2

013

12/19/2

013

1/7/2

014

1/26/2

014

2/14/2

014

3/5/2

014

3/24/2

014

4/12/2

014

5/1/2

014

5/20/2

014

6/8/2

014

6/27/2

014

7/16/2

014

8/4/2

014

8/23/2

0141

1.2

1.4

1.6

1.8

2

2.2

2.4

Are you compensated for the risks?

Yield* Term premium

(annualized) (cumulative)

3 month (risk-free) 0.94%

1 Year 1.01% 0.07% 0.07%

3 Years 1.13% 0.19% 0.57%

5 Years 1.52% 0.58% 2.93%

7 Years 1.64% 0.70% 5.00%

10 Years 1.99% 1.05% 11.01%

*As of August 29, 2014

Source: CI Investments

Weighting (%) 2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

2014Q1

2014Q2 Target

Cash 21 27 34 24 21 22 25 18 0%

Government & IG corporate 41 36 31 44 48 44 40 47 60%

High-yield bonds 18 15 13 12 11 14 15 15 20%

High-dividend Stocks 20 22 22 20 20 20 20 20 20%

Duration (years) 4.1 4.1 3.3 3.7 4.0 3.7 3.4 3.4

Historical asset allocations

Select Income Managed Corporate Class

Tracking 105 months; from inception to August 2014

Higher consistency; lower downside

Stability first

>2% 1 to 2% 0 to 1% -1 to 0% <-1%0

10

20

30

40

50

60

70

3

19

61

16

67

21

41

30

6

Monthly return distribution

The income portion of PSS portfolios (Class A) DEX Universe Bond Index

Recap of capital market outlook

• Record government and household debt levels put a lid on

interest rates

• Low interest rates lead to sub-par growth

• Equity volatility is suppressed

• Bond volatility is unusually high with unusually low expected

returns

Positioning

• Income allocation to drive alpha

• Safety is not limited to cash and government bonds

• Take advantage of low equity market volatility

• Watch whether growth driven by P/E or earnings

• Watching emerging market bonds and stocks

Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ®CI Investments, the CI Investments design, Cambridge, Harbour Advisors, and Harbour Funds are registered trademarks of CI Investments Inc. ™Portfolio Select Series, Portfolio Series, Signature Funds, G5|20 Series, and the G5|20 Series design are trademarks of CI Investments Inc.Morningstar Awards © Morningstar Inc. All Rights Reserved.

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