Synergy Global Corporate Class

Transcription

1 This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You can get a copy of the annual financial statements at your request, and at no cost, by calling , by writing to us at CI Investments Inc., 2 Queen Street East, Twentieth Floor, Toronto, ON, M5C 3G7 or by visiting our website at or SEDAR at Securityholders may also contact us using one of these methods to request a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure. INVESTMENT OBJECTIVE AND STRATEGIES The objective of the Synergy Global Corporate Class (the Fund ) is longterm capital growth by investing primarily in equity and equityrelated securities of global momentum companies situated in the developed markets represented in the MSCI World Index C, which currently includes 23 of the world s developed markets. Momentum managers invest in companies that are changing for the better and whose underlying fundamentals are improving more rapidly than the overall stock market. Momentum managers are usually willing to give up some of the initial price movement in a stock in order to obtain confirmation that the company s underlying fundamentals are actually improving. They typically have a much shorter investment horizon than other types of fund managers. They seek to be rewarded by significant upward movements in stock prices that can occur over shorter time periods. Since change is the catalyst, this style tends to generate relatively high portfolio turnover. A quantitative model assists in the search for global stocks that exhibit characteristics such as upward changes in analysts earnings forecasts for a company, positive earnings surprises, and strong relative stock price performance. Once a list of potential investments exhibiting these criteria is identified, the major fundamental aspects of each company are analyzed, including the quality of the company s earnings streams and how it s positioned to benefit from the current economic environment. The fund is broadly diversified on a regional, country and industry basis in order to minimize risk and boost returns. The portfolio advisors sell discipline is as strong as their buy discipline. They continually monitor the portfolio to identify companies with deteriorating fundamentals so they can be sold before their relative performance declines significantly. The Fund may use derivatives for nonhedging purposes, but only as permitted by securities regulations. In order to earn additional income, the Fund may enter into securities lending transactions, repurchase transactions and reverse repurchase transactions, to the extent permitted by securities regulations. RISK The risks associated with investing in this Fund remain as discussed in the prospectus. The Fund is suitable for investors who want to add global momentum to a diversified portfolio, are comfortable investing outside Canada, are investing for the medium and/or long term and can tolerate medium risk. RESULTS OF OPERATIONS The net asset value of the Fund decreased by 32.9 million to million from March 31, 215 to March 31, 216. The Fund had net redemptions of 13.7 million during the year. The portfolio s performance decreased assets by 9.6 million. The Fund paid distributions totalling 9.6 million. The oneyear return for Class A shares was 5.1%, Class AT5 shares was 5.2%, Class AT8 shares was 5.3%, Class F shares was 4.%, Class I shares was 2.7%, Class IT8 shares was 2.8%, Class O shares was 2.8%, Class Y shares was 4.% and Class Z shares was 5.1%, as compared to the return of its benchmark of.4%. The benchmark is the MSCI World Total Return Index. For much of the past 12 months, European stocks have been in favour as global investors embraced the European Central Bank s quantitative easing program and the resulting weaker euro, which drove earnings growth. While most investors focused on exporters, we concentrated our investments in domestic companies that would benefit disproportionately from various monetary/fiscal stimulus (one such theme was investing in property and property developers). Emerging markets sold off on the stronger U.S. dollar, weaker commodity prices, and a deteriorating macro backdrop in China. We limited our exposure in both energy and materials to companies that had better balance sheets and higher free cash flow generation. Our core holdings remain the secular growth stories in consumer discretionary, technology, and health care. Within the U.S., breadth in the markets has been dismal. There was significant crowding in secular growth names (i.e. FANG stocks : Facebook, Amazon, Netflix, Google) which seemed to mask the fact that the rest of the U.S. market was effectively in a bear market. The only way to outperform was to concentrate portfolios in those FANG stocks, but that required embracing a level of risk we were not willing to accept. Over the last few months we have seen swift reversals in the market conditions that have added to high levels of volatility in the S&P 5 Index so far in 216. During the 12month period ended March 31, 216, the portfolio underperformed the MSCI World Total Return Index. Our positioning in consumer staples and consumer discretionary provided the largest positive contribution to relative performance during the period. Top performing holdings were TakeTwo Interactive Software Inc. and Alphabet Inc. (Class A). Our positioning in financials and information technology detracted from relative performance. The largest individual detractors were Anadarko Petroleum Corp. and Microsoft Corp. CIG 69

2 RECENT DEVELOPMENTS While we prefer to err on the side of bullishness as we look out to the latter half of 216, we also prefer to be buyers of dips along the way and we do expect there will be dips to buy. Looking over the longterm, we expect low global growth and intertwined financial systems to form the new reality. Risk assets can work in a slow growth environment; however, it will be more difficult for the average company to succeed as there is no longer a rising tide to lift all boats. We expect positive and negative inflections will occur more frequently and that sentiment and flows will be more powerful forces in driving markets. RELATED PARTY TRANSACTIONS Manager, Portfolio Advisor and Registrar CI Investments Inc. is the Manager, Portfolio Advisor and Registrar of the Fund. CI Investments Inc. is a subsidiary of CI Financial Corp. The Manager, in consideration for management fees, provides management services required in the daytoday operations of the Fund. The Manager bears all of the operating expenses of the Fund (other than taxes, borrowing costs and new governmental fees) in return for a fixed administration fee. The Manager received 3.5 million in management fees and.4 million in fixed administrative fees for the year. Management Fees Approximately 27% of total management fees were used to pay for sales and trailing commissions. The remaining 73% of management fees were used for investment management and other general administration. Independent Review Committee The Fund received standing instructions from the Board of Governors ( BoG ) in its capacity as the Independent Review Committee ( IRC ) with respect to the following Related Party Transactions: a) trades in securities of CI Financial Corp.; b) purchases or sales of securities of an issuer from or to another investment fund managed by the Manager (referred to as InterFund Trades ); and c) mergers of funds with another fund that is subject to National Instrument 812 ( Fund Mergers ). Management fee and fixed administration fee rates as at March 31, 216, for each of the classes are shown below: Annual management fee rate (%) Annual fixed administration fee rate (%) A Shares AT5 Shares AT8 Shares E Shares EF Shares EFT5 Shares The applicable standing instructions require that Related Party Transactions be conducted in accordance with the Manager s policies and procedures. The Manager is required to advise the BoG of any material breach of a condition of the standing instructions. The standing instructions require, among other things, that the investment decision in respect to Related Party Transactions (a) are made by the Manager free from any influence by any entities related to the Manager and without taking into account any consideration to any affiliate of the Manager; (b) represent the business judgment of the Manager uninfluenced by considerations other than the best interests of the Fund; and (c) are made in compliance with the Manager s policies and procedures. Transactions made by the Manager under the standing instructions are subsequently reviewed by the BoG on a quarterly basis to monitor compliance. The Fund relied on the BoG s standing instructions regarding Related Party Transactions during this reporting year. EFT8 Shares ET5 Shares ET8 Shares F Shares I Shares Paid directly by investor IT8 Shares Paid directly by investor O Shares Paid directly by investor.15 OT5 Shares Paid directly by investor.15 OT8 Shares Paid directly by investor.15 Y Shares Z Shares 2..22

3 FINANCIAL HIGHLIGHTS The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the past five years, as applicable. Net Assets per Share () (1) (2) (8) * A Shares Commencement of operations March 3, 1999 Year Ended Year Ended Year Ended Year Ended Year Ended Mar. 31, 216 Mar. 31, 215 Mar. 31, 214 Mar. 31, 213^ Mar. 31, 212^ (.18) (.16) (.14) (.) (.) (.7) (1.16) (.3) (.36) (.11) (.4) (.4) (.7) (.2) (.1) (.3) (.19) (.34) (.23) (.7) (.2) (.1) ,44 124, ,321 2, ,563 16,553 17,364 18,925 2,931 25, AT5 Shares Commencement of operations October 26, 27 Year Ended Year Ended Year Ended Year Ended Year Ended Mar. 31, 216 Mar. 31, 215 Mar. 31, 214 Mar. 31, 213^ Mar. 31, 212^ (.22) (.22) (.19) (.16) (.16) (.) (1.52) (.65) (.11) (.4) (.5) (.) (.3) (.2) (.37) (.25) (.44) (.42) (.34) (.3) (.33) (.85) (.72) (.44) (.33) (.35) ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7.

4 Net Assets per Share () (1) (2) (8) * AT8 Shares Commencement of operations October 22, 27 Year Ended Year Ended Year Ended Year Ended Year Ended Mar. 31, 216 Mar. 31, 215 Mar. 31, 214 Mar. 31, 213^ Mar. 31, 212^ (.18) (.17) (.16) (.13) (.14) (.8) (1.15) (.2) (.41) (.12) (.3) (.4) (.8) (.2) (.2) (.28) (.2) (.56) (.55) (.46) (.41) (.47) (.87) (.79) (.54) (.43) (.49) E Shares Commencement of operations July 29, 215 Mar. 31, (.13) (.4) (.38) (.45) (.5) (.39) (.44) ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7.

5 Net Assets per Share () (1) (2) (8) * EF Shares Commencement of operations July 29, 215 Mar. 31, (.8).51 (1.5) (.98) (.5) (.4) (.45) EFT5 Shares Commencement of operations July 29, 215 Mar. 31, (.8).5 (1.48) (.97) (.5) (.38) (.33) (.76)

6 Net Assets per Share () (1) (2) (8) * EFT8 Shares Commencement of operations July 29, 215 Mar. 31, (.7).5 (1.46) (.94) (.4) (.37) (.52) (.93) ET5 Shares Commencement of operations July 29, 215 Mar. 31, (.14).5 (1.47) (1.2) (.4) (.38) (.33) (.75)

7 Net Assets per Share () (1) (2) (8) * ET8 Shares Commencement of operations July 29, 215 Mar. 31, (.14).5 (1.46) (1.1) (.4) (.37) (.52) (.93) F Shares Commencement of operations November 13, 2 Year Ended Year Ended Year Ended Year Ended Year Ended Mar. 31, 216 Mar. 31, 215 Mar. 31, 214 Mar. 31, 213^ Mar. 31, 212^ (.11) (.) (.9) (.7) (.6) (.8) (1.19) (.3) (.13) (.7) (.4) (.4) (.8) (.2) (.1) (.35) (.23) (.39) (.27) (.8) (.2) (.1) ,658,738 8,695 5,332 5, ,274 1, , ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7. 7

8 Net Assets per Share () (1) (2) (8) * I Shares Commencement of operations September 2, 24 Year Ended Year Ended Year Ended Year Ended Year Ended Mar. 31, 216 Mar. 31, 215 Mar. 31, 214 Mar. 31, 213^ Mar. 31, 212^ (.31) (4.1) (.64) (.12) (.12) (.23) (.6) (.4) (1.4) (.66) (1.16) (.78) (.23) (.6) (.4) ,883 35,52 29,169 19,66 22,447 1,48 1,432 1,416 1,241 1, IT8 Shares Commencement of operations February 17, 212 Year Ended Year Ended Year Ended Year Ended Mar. 31, 216 Mar. 31, 215 Mar. 31, 214 Mar. 31, 213^ Mar. 31, 212^ (3.11) (.32) (1.35) (.57) (.7) (.7) (.15) (.4) (.57) (.38) (1.9) (1.4) (.84) (.8) (.13) (1.73) (1.49) (.99) (.84) (.13) ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7.

9 Net Assets per Share () (1) (2) (8) * O Shares Commencement of operations July 26, 213 Year Ended Year Ended Mar. 31, 216 Mar. 31, 215 Mar. 31, (.2) (.2) (.1) (3.) 1.34 (1.95) (1.5) (.7) (.7) (.13) (.6) (.38) (.67) (.45) (.13) , OT5 Shares Commencement of operations July 29, 215 Mar. 31, (.1).5 (1.48) (.9) (.5) (.38) (.33) (.76)

10 Net Assets per Share () (1) (2) (8) * OT8 Shares Commencement of operations July 29, 215 Mar. 31, (.1).31 (.91) (.52) (.4) (.38) (.53) (.95) Y Shares Commencement of operations August 14, 29 Year Ended Year Ended Year Ended Year Ended Year Ended Mar. 31, 216 Mar. 31, 215 Mar. 31, 214 Mar. 31, 213^ Mar. 31, 212^ (.28) (.25) (.21) (.16) (.15) (.14) (3.18) (.21) (.64) (.25) (.) (.) (.19) (.5) (.3) (.85) (.54) (.95) (.64) (.19) (.5) (.3) ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7.

11 Net Assets per Share () (1) (2) (8) Z Shares Commencement of operations August 14, 29 Year Ended Year Ended Year Ended Year Ended Year Ended Mar. 31, 216 Mar. 31, 215 Mar. 31, 214 Mar. 31, 213^ Mar. 31, 212^ (.47) (.42) (.36) (.28) (.26) (.2) (3.3) (.6) (.84) (.28) (.9) (.) (.18) (.5) (.3) (.79) (.51) (.88) (.61) (.18) (.5) (.3) ,983 54,577 58,733 52,437 53,152 2,342 2,886 3,61 4,78 4, ^Historical figures are based on Canadian GAAP, for more details refer to footnote 7. (1) This information is derived from the Fund s audited annual financial statements. (2) Net assets per share and dividends per share are based on the actual number of shares outstanding for the relevant class at the relevant time. The increase (decrease) in net assets attributable to holders of redeemable shares per share is based on the weighted average number of shares outstanding for the relevant class over the fiscal year. (3) Dividends are automatically reinvested in additional shares of the Fund. (4) Management expense ratio is calculated based on expenses charged to the Fund (excluding commissions and other portfolio transaction costs) and is expressed as an annualized percentage of daily average net assets for the year. As of July 1, 2, Ontario combined the federal goods and services tax ( GST 5%) with the provincial retail sales tax ( PST 8%). The combination resulted in a Harmonized sales tax ( HST ) rate of 13%. The Effective HST tax rate is calculated using the attribution percentage for each province based on shareholder residency and can be different from 13%. (5) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of % is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the fiscal year. The higher a Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a higher turnover rate and the performance of a Fund. Portfolio turnover rate is calculated by dividing the lesser of the cost of purchases and the proceeds of sales of portfolio securities for the year, and excluding cash and shortterm investments maturing in less than one year, and before assets acquired from a merger, if applicable, by the average of the monthly fair value of investments during the year. (6) The trading expense ratio represents total commissions and other portfolio transaction costs disclosed in the statements of comprehensive income expressed as an annualized percentage of daily average net assets of the Fund during the year. (7) For financial years beginning on or after April 1, 213 the financial highlights are derived from the financial statements prepared in accordance with International Financial Reporting Standards ( IFRS ). IFRS allows net assets to be calculated based on the last traded market price for financial assets and financial liabilities where the last traded price falls within the day s bidask spread. There are no differences between the net assets calculated for purpose of processing shareholders transactions and the net assets attributable to holders of redeemable shares used for financial statement reporting purposes. For financial years before April 1, 213, the financial highlights are derived from the financial statements prepared in accordance with Canadian GAAP. Under Canadian GAAP net assets for financial statement purposes were calculated based on bid/ask price while for purpose of processing shareholder transactions net assets were calculated based on the closing market price. (8) This information is provided as at March 31 of the years shown.

12 PAST PERFORMANCE This section describes how the Fund has performed in the past. Remember, past returns do not indicate how the Fund will perform in the future. The information shown assumes that distributions made by the Fund in the years shown were reinvested in additional shares of the relevant classes of the Fund. In addition, the information does not take into account sales, redemption, distribution or other optional charges that would have reduced returns or performance. YearbyYear Returns The following charts show the Fund s annual performance for each of the years shown and illustrate how the Fund s performance has changed from year to year. In percentage terms, the charts show how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year, except where noted. A Shares AT5 Shares AT8 Shares F Shares Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar. 214 Mar. 215 Mar. 216 Mar. 27 Mar. 28 Mar. 29 Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar. 214 Mar. 215 Mar. 216 Mar. 212 Mar. 213 Mar. 214 Mar. 215 Mar. 216 Mar. 214 Mar. 215 Mar. 216 Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar. 214 Mar. 215 Mar. 216 Mar. 27 Mar. 28 Mar. 29 Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar. 214 Mar. 215 Mar. 216 Mar. 28 Mar. 29 Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar. 214 Mar. 215 Mar. 216 Mar. 28 Mar. 29 Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar. 214 Mar Mar. 216 Mar. 27 Mar. 28 Mar. 29 Mar. 2 Mar. 211 Mar. 212 Mar. 213 Mar. 214 Mar Mar I Shares IT8 Shares O Shares Y Shares Z Shares This figure is for the period from October 22, 27 to March 31, This figure is for the period from October 26, 27 to March 31, This figure is for the period from August 14, 29 to March 31, 2. 4 This figure is for the period from February 17, 212 to March 31, This figure is for the period from July 26, 213 to March 31, 214.

13 Annual Compound Returns The following table shows the Fund s annual compound returns for each year indicated, compared to the MSCI World Total Return Index. The MSCI World Total Return Index is a free floatadjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The Index consists of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States of America. A discussion of the performance of the Fund as compared to the benchmark is found in the Results of Operations section of this report. One Year (%) Three Years (%) Five Years (%) Ten Years (%) Since Inception (%) A Shares (5.1) n/a MSCI World Total Return Index (.4) n/a AT5 Shares (5.2) n/a 3.7 MSCI World Total Return Index (.4) n/a 6.4 AT8 Shares (5.3) n/a 3.8 MSCI World Total Return Index (.4) n/a 6.4 F Shares (4.) n/a MSCI World Total Return Index (.4) n/a I Shares (2.7) n/a MSCI World Total Return Index (.4) n/a IT8 Shares (2.8) 16.2 n/a n/a.4 MSCI World Total Return Index (.4) 16.6 n/a n/a 6.4 O Shares (2.8) n/a n/a n/a 14.8 MSCI World Total Return Index (.4) n/a n/a n/a 16.1 Y Shares (4.) n/a 11.3 MSCI World Total Return Index (.4) n/a 12.2 Z Shares (5.1) n/a.1 MSCI World Total Return Index (.4) n/a

14 Summary of Investment Portfolio as at March 31, 216 Portfolio Breakdown Percentage of Portfolio Breakdown (cont d) Percentage of Top 25 Holdings Percentage of Category Net Assets (%) Category Net Assets (%) Security Name Net Assets (%) Country allocation U.S.A Japan Cash & Equivalents U.K Switzerland France South Korea Cayman Islands Jersey Island Spain Italy Netherlands Germany Australia Ireland Sweden....8 Panama....7 Foreign Currency Forward Contracts....6 Denmark....6 Singapore....6 Israel....4 Luxembourg....3 Other Net Assets (Liabilities)....3 Canada....3 Bermuda....3 Mexico....3 Portugal....2 Philippines....2 Malaysia....2 Belgium....2 Finland....2 Brazil....1 Norway....1 Sector allocation Financials Information Technology Industrials Consumer Discretionary Health Care Consumer Staples....8 Cash & Equivalents Energy Utilities Materials Telecommunication Services Foreign Currency Forward Contracts....6 Other Net Assets (Liabilities)....3 ExchangeTraded Funds....1 Cash & Equivalents Apple Inc Thermo Fisher Scientific Inc Wells Fargo & Co Synchrony Financial Alphabet Inc., Class A Honeywell International Inc UnitedHealth Group Inc Arch Capital Group Ltd Edwards Lifesciences Corp Microsoft Corp CK Hutchinson Holdings Ltd Goodyear Tire & Rubber Co Newfield Exploration Co Procter & Gamble Co Dollar General Corp CVS Health Corp Stanley Black & Decker Inc ACE Ltd....9 Facebook Inc....9 Northrop Grumman Corp....9 SBA Communications Corp....9 ConAgra Foods Inc....9 Zoetis Inc....9 Sumitomo Mitsui Financial Group Inc....9 Total Net Assets (in s) 194,423 The summary of investment portfolio may change due to ongoing portfolio transactions of the Fund and updates will be available on a quarterly basis. A NOTE ON FORWARDLOOKING STATEMENTS This report may contain forwardlooking statements about the Fund, its future performance, strategies or prospects, and possible future Fund action. The words may, could, should, would, suspect, outlook, believe, plan, anticipate, estimate, expect, intend, forecast, objective, and similar expressions are intended to identify forwardlooking statements. Forwardlooking statements are not guarantees of future performance. Forwardlooking statements involve inherent risks and uncertainties, both about the Fund and general economic factors, so it is possible that predictions, forecasts, projections and other forwardlooking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forwardlooking statement made by the Fund. These factors include, but are not limited to, general economic, political and market factors in Canada, the United States and internationally, interest and foreign exchanges rates, global equity and capital markets, business competition, technological changes, changes in laws and regulations, judicial or regulatory judgments, legal proceedings and catastrophic events. The above list of important factors that may affect future results is not exhaustive. Before making any investment decisions, we encourage you to consider these and other factors carefully. All opinions contained in forwardlooking statements are subject to change without notice and are provided in good faith but without legal responsibility.