Investing with IA Clarington OUR PHILOSOPHY PORTFOLIO MANAGERS FUNDS

Transcription

1 Investing with OUR PHILOSOPHY PORTFOLIO MANAGERS FUNDS

2 be invested 2 IA CLARINGTON FUND LINEUP

3 AT IA CLARINGTON, we believe that investing has changed. Shifting investor demand and unprecedented access to information and products have created new challenges and new opportunities. We believe that the best investor outcomes will be achieved by being invested not just in the markets, but in distinctive and outcome-based product solutions, and in active trust-based relationships with advisors. Our distinctive and outcome-based solutions include active management funds, portfolio solutions, socially responsible investments, target date funds with a guarantee 1 and Guaranteed Investment Funds. IA CLARINGTON FUND LINEUP 3

4 We believe in active management Our goal is to provide a broad range of products that are actively managed. Rather than focus on any particular investment approach or style, asset class or region, we believe that the best chance for success lies in hiring skilled portfolio managers who have their own particular take on how to achieve success for investors. When choosing portfolio managers, we focus on three key factors: SKILL Our portfolio managers have a history of skilled security selection that translates into a desired outcome over the long run, including the effective management of overall portfolio risk. Through the years or even decades of experience, they have developed their own process, and a unique understanding of where opportunity can be found and what it looks like. CONVICTION Our portfolio managers have the conviction to follow through on an idea, the courage to make choices that are different from the index and their peer group, and the humility to make portfolio course corrections when necessary. OPPORTUNITY Our portfolio managers have a very individual take on opportunity. They follow companies and markets constantly, using their own distinct process and discipline to identify prospects the market often overlooks. Opportunity also incorporates the portfolio manager s ability to be flexible. Managing fund size, limiting constraints, and having access to investment opportunities or tools that may not be widely available to retail investors are critical components Our portfolio managers use skill, conviction and opportunity in their attempts to deliver results. Those results include whatever investors need to achieve their goals, from higher returns, to a steady flow of income, to reduced risk. 4 IA CLARINGTON FUND LINEUP

5 We believe in active advice We firmly believe investors have the best chance of success when they work with a skilled financial advisor they can trust. In a study by The Investment Funds Institute of Canada (IFIC), people who worked with financial advisors had vastly more wealth 4.2 times in median assets more than people who didn t. That s why we work to develop strong relationships with advisors who share our views and want the best for their clients. Financial assets held by Advised and Non-Advised households Median current financial assets $120,000 $100,000 $80,000 $60, x Advised $101,000 $40,000 $20,000 $0 Non-Advised $24,000 Source: IFIC. New Evidence on the Value of Financial Advice, by Dr. Jon Cockerline, Ph.D., November IA CLARINGTON FUND LINEUP 5

6 Spotlight on our managers My funds don t reflect the index, and for good reason. To maximize returns, you have to minimize risk and try to preserve the client s original investment. To do that, you can t just follow the index. DAN BASTASIC BComm (finance), MBA, CFA Investments Inc. Strategic Equity Income Fund Strategic Income Fund Strategic U.S. Growth & Income Fund Strategic Corporate Bond Fund Tactical Income Fund GOAL: Seeks to provide investors with capital growth and income APPROACH: Follow an intense five-step process to find great equity and fixed-income opportunities through thorough research and analysis of each company s financial statements EXPERIENCE: 15+ years Monitor the economic environment with a 12-month market outlook as a way to identify tomorrow s risks and opportunities, to position the Funds to help provide superior risk-adjusted returns Independent viewpoint often shifts the Funds holdings away from those of the market index in the quest to enhance returns and protect capital EXPERTISE: Equity and equity-income (dividends), high-yield and corporate bonds I look for investment opportunities that are less broadly marketed and require more independent research. This is where I seek better risk-adjusted returns for my investors. JEFF SUJITNO HBA, CPA, CIM Investments Inc. Floating Rate Income Fund Core Plus Bond Fund Tactical Bond Fund GOAL: Generate consistent income streams with less exposure to economic and market conditions APPROACH: Look for companies with a long history of generating predictable and sustainable cash flow EXPERIENCE: 15+ years Assess strength of credit agreements and contracts, rather than focusing on price and yield only Construct a portfolio of high conviction names without over-diversifying EXPERTISE: Credit, senior loans, corporate and high-yield bonds. One of the few Canadian managers who specializes in senior secured loans. 6 IA CLARINGTON FUND LINEUP

7 I look for investment opportunities in less efficient areas of the market and follow a disciplined approach that I believe has the potential to generate greater risk-adjusted returns for investors. GOAL: Provide investors with a low interest-rate sensitive distribution and consistent risk-adjusted returns over the long run APPROACH: Invest in underfollowed, undervalued, stable, growing, cash-flow generative companies in North America EXPERIENCE: 10+ years Look to the more inefficient areas of the market for investment opportunities Use a disciplined process combined with thorough due diligence to assess investments Construct a concentrated portfolio of high-conviction names that have higher growth potential and are less expensive than the overall market EXPERTISE: North American small / mid-cap and high-yield equities TERRY THIB MESC, MBA, CFA Investments Inc. North American Opportunities Class Growth & Income Fund Our investment objective is to manage risk first and generate acceptable returns second. So we can t be passive, because then you get the return and associated risk of the underlying index, no better and no worse. GOAL: Buy quality companies with attractive valuations APPROACH: Undertake thorough, active, independent research to identify a diversified group of companies with enhanced return potential Focus on sustainable businesses run by strong management teams Independent viewpoint often shifts the Funds holdings away from those of the market index in the quest to protect capital EXPERIENCE: 70+ years combined EXPERTISE: North American large-cap, North American small-cap companies and fixed-income left to right: JOE JUGOVIC BA (economics), CFA WENDY BOOKER URBAN BA (economics) DARREN DANSEREAU BComm (finance), CFA IAN COOKE BComm (finance), CFA QV Investors Inc. Canadian Balanced Fund Canadian Small Cap Fund Global Equity Fund IA CLARINGTON FUND LINEUP 7

8 Spotlight on our managers continued Our investment and analysis teams work hand in hand to look at financial and environmental performance, corporate governance, diversity, labour relations and community relations issues. This helps us mitigate risks and points us to investments that are both profitable and responsible. left to right: ANDREW SIMPSON BA, CFA STEPHEN MACINNES BA, CFA Vancity Investment Management Ltd. Inhance Balanced SRI Portfolio Inhance Canadian Equity SRI Class Inhance Conservative SRI Portfolio Inhance Growth SRI Portfolio Inhance Monthly Income SRI Fund Inhance Global Equity SRI Class GOAL: Seeks to provide investors with competitive returns while minimizing risk by investing in responsible companies APPROACH: Analyze potential investments for their performance and policies regarding environmental, social and governance (ESG) issues. Monitor behaviour of existing investments Design portfolios to help meet a variety of investor needs. Focus on companies that take a proactive approach. Minimize risk by avoiding companies with exposure to both traditional business risks and risks stemming from ESG issues Collaborate with in-house ESG team to identify appropriate companies for investment and assess new and ongoing risks Engage and encourage companies to discuss their exposure to emerging ESG risks and how they plan to address them EXPERIENCE: 50+ years combined EXPERTISE: Responsible investments in North American and global markets We look beyond short-term market volatility to really understand what a company is worth. By doing so we believe we can generate strong absolute returns over the long-term. BRAD RADIN B.A., B.Sc. (biophysics), MBA, CFA Radin Capital Partners Inc. Global Opportunities Fund Global Growth & Income Fund GOAL: Strong absolute long-term returns APPROACH: Look for undervalued companies at bargain basement prices with a built-in level of safety EXPERIENCE: 20+ years Maintain full flexibility to invest in any region and across all market caps Buy and hold for the long term, three to five years on average EXPERTISE: Global equities 8 IA CLARINGTON FUND LINEUP

9 We leverage our deep global research platform with bottom-up security specific research to unearth compelling values and hidden gems that might otherwise be overlooked. GOAL: Pursue exceptional investment opportunities across a variety of asset classes to create consistent patterns of strong, risk-adjusted returns APPROACH: Asset allocation decisions are strategic in nature and built from the team s best bottom-up ideas Leverage investment research from 15 specialized teams of portfolio managers, research analysts and traders to help inform their decision-making Go anywhere approach allows the team to navigate through the changing global market conditions in its pursuit of strong total return EXPERIENCE: 110+ years combined EXPERTISE: Global equities and global fixed-income, both traditional and non-traditional left to right: DAVID W. ROLLEY CFA EILEEN N. RILEY CFA DANIEL J. FUSS CFA, CIC LEE M. ROSENBAUM BS, MBA Loomis, Sayles & Company, L.P. Global Tactical Income Fund We are contrarian investors who believe that capital markets are inefficient and we can achieve capital appreciation and outperform the market over time. GOAL: Deliver strong long-term results for investors APPROACH: Employ a research-intensive, risk-sensitive, fundamentals-based investment strategy EXPERIENCE: 25+ years Invest in quality businesses that are out of favour or overlooked and are trading at attractive valuations Add value by constructing portfolios that do not resemble the index EXPERTISE: North American equities DAVID TAYLOR MBA, CFA Taylor Asset Management Inc. Focused Balanced Fund Focused Canadian Equity Class Focused U.S. Equity Class IA CLARINGTON FUND LINEUP 9

10 Spotlight on our managers continued Our asset allocation decisions are guided by a strong conviction in our economic outlook. CLEMENT GIGNAC M. E. SC Industrial Alliance Investment Management Monthly Income Balanced Fund Yield Opportunities Fund GOAL: To generate a consistent stream of income with the focus on downside protection while maintaining the potential for long term capital growth APPROACH: Combines top down with bottom up research EXPERIENCE: 30+ years Tactically manages asset allocation strategy based on deep macro-economic outlook, diversified across all major asset classes EXPERTISE: Asset allocation, global economic forecast, top down research. Access to the Chief Economist at ia Financial Group and Chair of its Asset Mix Committee I focus on companies that have the potential for high upside over a 12 to 18 month time horizon, with low downside potential. PIERRE TROTTIER MBA, CFA Industrial Alliance Investment Management Global Value Fund U.S. Dividend Growth Fund U.S. Dividend Growth Registered Fund GOAL: To deliver income and growth by investing in a diversified portfolio of large cap U.S. equities, with the focus on dividend growth APPROACH: Employs a mix of bottom-up and top-down analysis Looks for companies with demonstrated dividend payment history and growth May employ a covered call strategy to enhance income and protect on the downside EXPERIENCE: 15+ years of experience EXPERTISE: U.S. equities, fundamental research, bottom up security selection. 10 IA CLARINGTON FUND LINEUP

11 We believe a positive rate of return can be achieved by following a disciplined investment strategy that emphasizes good quality, dividend-paying companies. GOAL: Generate consistent income streams with less exposure to economic and market conditions APPROACH: Look for quality companies at attractive prices Rigorously review candidates to find those with strong earnings and cash flow, as well as patterns of increasing dividends Invest in companies that make up the backbone of the Canadian economy (pipelines, utilities, telecoms and financial services) EXPERIENCE: 40+ years combined EXPERTISE: Canadian dividend-paying equities left to right: RYAN BUSHELL BMOS, CIM, CFA DOUGLAS KEE CIM, CFA Leon Frazer & Associates Inc. Canadian Conservative Equity Fund I m from the Warren Buffett school of investing. It s all about protecting the investors capital. That s what I ve been focusing on for the last 25 years as an investment manager. GOAL: Preserve and grow investors savings APPROACH: Buy businesses not stocks that are set up to do well irrespective of market conditions EXPERIENCE: 25+ years Look for a select few companies that have a sustainable advantage in their market segment and buy at deeply discounted valuations Adopt a long-term approach to investing EXPERTISE: U.S. stocks and activist-investing opportunities LARRY SARBIT MA (Geography) Sarbit Advisory Services Inc. Sarbit U.S. Equity Fund Sarbit U.S. Equity Class (Unhedged) Sarbit Activist Opportunities Class IA CLARINGTON FUND LINEUP 11

12 Additional distinctive solutions INDUSTRIAL ALLIANCE INVESTMENT MANAGEMENT INC. A subsidiary of Industrial Alliance Insurance and Financial Services Inc., Industrial Alliance Investment Management Inc. manages general portfolios and segregated and mutual funds for the Industrial Alliance group. offers a variety of mutual funds managed by Industrial Alliance Investment Management Inc., including fixed-income, balanced, Canadian, U.S. and global equity funds. Marc Gagnon Monthly Income Balanced Fund Canadian Leaders Class Canadian Growth Class Sevgi Ipek/Pierre Trottier/ Pierre Chapdelaine Global Value Fund François Lalande Bond Fund Real Return Bond Fund Short-Term Bond Fund Gil Lamothe Canadian Dividend Fund Dividend Growth Class Donny Moss Canadian Dividend Fund Dividend Growth Class Christian Pouliot Money Market Fund Short-Term Income Class PORTFOLIO SOLUTIONS Distinction Portfolios provide an all-in-one investment solution for a range of investment needs. From Prudent to Bold, each portfolio provides a powerful combination of benefits and features. Distinction Prudent Class Distinction Conservative Class Distinction Balanced Class Distinction Growth Class Distinction Bold Class Distinction Portfolios are managed by Industrial Alliance Investment Management Inc. 12 IA CLARINGTON FUND LINEUP

13 Outcome-based solutions GUARANTEED TARGET DATE FUNDS 1 Target Click Funds take the worry out of investing by automatically locking in month-end highs and lowering risk as they approach their maturity date. As a result, they capture growth and provide protection in rough markets. Target Click 2020 Target Click 2025 Target Click 2030 Target Click Funds are managed by Industrial Alliance Investment Management Inc. GUARANTEED INVESTMENT FUNDS (GIFS) 3 GIFs offer the performance potential of mutual funds with the security of principal protection in a well-diversified line-up of segregated funds. TAX STRATEGIES TO HELP YOU REACH YOUR GOALS 2 Many of the Funds provide options for tax efficiency to help investors reach their goals: Income solutions (Series T) Investors who rely on their investments for cash flow can benefit from minimizing or deferring taxes wherever possible. An Fund offered through Series T can provide investors with cash flow without triggering a taxable disposition. Corporate class Several of the Funds are available within a corporate class structure, which can provide a tax-efficient investing option. The main difference between corporate class and regular mutual fund trusts is that all corporate classes are held within a single corporation. This provides an advantage. Investors can switch between corporate class funds without triggering capital gains or losses, because taxable income is only realized when investors redeem from the corporation. IA CLARINGTON FUND LINEUP 13

14 fund lineup Our products include active management funds, portfolio solutions, socially responsible investments (SRI), target date funds with a guarantee 1 and Guaranteed Investment Funds (GIFs). Money Market/ Short-Term Fixed-Income Specialty Fixed-Income Diversified Income Canadian Balanced Canadian Equity or Dividend Bond Fund G Money Market Fund G Short- Term Bond Fund Short- Term Income Class Core Plus Bond Fund T U.S. Dollar Floating Rate Income Fund T Real Return Bond Fund Strategic Corporate Bond Fund T Tactical Bond Fund T Inhance Monthly Income SRI Fund T Monthly Income Balanced Fund T Strategic Income Fund TG Tactical Income Fund TG Yield Opportunities Fund T Canadian Balanced Fund CTG Focused Balanced Fund T Inhance Balanced SRI Portfolio T Inhance Conservative SRI Portfolio T Inhance Growth SRI Portfolio Canadian Conservative Equity Fund CTG Canadian Dividend Fund Canadian Growth Class Canadian Leaders Class Canadian Small-Cap Fund CG Growth & Income Fund T Dividend Growth Class TG Focused Canadian Equity Class T Inhance Canadian Equity SRI Class Strategic Equity Income Fund CTG North American Opportunities Class 14 IA CLARINGTON FUND LINEUP

15 U.S. Equity U.S. & Global Balanced Global Equity Distinction Portfolios Target Click Funds Focused U.S. Equity Class T Sarbit Activist Opportunities Class Sarbit U.S. Equity Class (Unhedged) Sarbit U.S. Equity Fund T Global Tactical Income Fund T Strategic U.S. Growth & Income Fund T Global Growth & Income Fund T Global Equity Fund TG Global Opportunities Fund CG Global Value Fund G Inhance Global Equity SRI Class Distinction Balanced Class G Distinction Bold Class Distinction Conservative Class G Distinction Growth Class G Distinction Prudent Class Target Click 2020 Target Click 2025 Target Click 2030 U.S. Dividend Growth Registered Fund C Offered in Corporate Class T Offered in Series T G Offered in GIF IA CLARINGTON FUND LINEUP 15

16 At, we believe that investing has changed. Shifting investor demand and unprecedented access to information and products have created new challenges and new opportunities. We believe that the best results for investors will be achieved by being invested not just in the markets, but in distinctive and outcome-based product solutions, and in active, trusting relationships with advisors. We market a wide range of investments to individual investors through their advisors, including actively managed mutual funds, portfolio solutions, socially responsible investments and target date funds. is a wholly-owned subsidiary of Industrial Alliance Insurance and Financial Services Inc., Canada s fourth largest life and health insurance company. 522 University Avenue, Suite 700, Toronto, ON M5G 1Y [email protected] 1 Each of the Target Click Funds (the Funds ) holds fixed-income securities issued by the Canadian federal or provincial governments that support payment on the Fund s maturity date of the highest month-end net asset value per unit achieved during the life of the Fund. In normal circumstances, it is expected that this fixed-income component would ensure payment of the guaranteed value. In addition to the fixed-income component, Industrial Alliance Insurance and Financial Services Inc. ( Industrial Alliance ), the parent company of the Portfolio Manager to the Funds, has provided guarantee to each of the Funds that it will pay any shortfall to the Fund if the net asset value of any Fund is less than its guaranteed value at maturity. If such a payment were required to be made, it would be subject to the creditworthiness of Industrial Alliance. Each Fund s maturity date will occur on June 30 of the year specified in the Fund s name. The guaranteed amount will benefit the investors who hold units of the Fund on that maturity date. In some circumstances, the maturity date for a Fund may be accelerated, in which case the Fund will pay the greater of the net asset value on that accelerated maturity date and the net present value of the guaranteed amount, less any applicable redemption charges. 2 The reference to the tax efficiency of a corporate class structure refers to the possibility of deferring capital gains on a switch from one class to another. Series T securities are intended for investors seeking regular monthly distributions. The target distribution rate for the Series T security corresponds to the name of the security. The monthly distributions for Series T securities will generally consist of net income and/or a return of capital in the case of Trust Funds, and dividends and/or a return of capital in the case of Corporate Class Funds. Returns of capital are not immediately taxable. Instead, a return of capital reduces the adjusted cost base of your investment. If your adjusted cost base goes below zero, then you will have to pay capital gains tax on the amount below zero. The payment of distributions and distribution breakdown is not guaranteed and may fluctuate. The payment of distributions should not be confused with a Fund s performance, rate of return or yield. Nothing in this document should be considered as investment or tax advice. The information in this material describes general characteristics of certain types of investment products and related taxation and should not be relied upon for any other reason. Always consult with your investment advisor and qualified tax professional prior to making an investment decision. 3 Industrial Alliance Insurance and Financial Services Inc. is the sole issuer of the individual variable annuity contract providing for investment in GIFs. A description of the key features of the individual variable annuity contract is contained in the GIFs Information Folder. SUBJECT TO ANY APPLICABLE DEATH AND MATURITY GUARANTEE, ANY PART OF THE PREMIUM OR OTHER AMOUNT THAT IS ALLOCATED TO A SEGREGATED FUND IS INVESTED AT THE RISK OF THE OWNER AND MAY INCREASE OR DECREASE IN VALUE ACCORDING TO FLUCTUATIONS IN THE MARKET VALUE OF THE ASSETS OF THE SEGREGATED FUND. Statements by the portfolio manager represent their professional opinion, do not necessarily reflect the views of, and should not be relied upon. Commissions, trailing commissions, management fees and expenses all 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. The Funds and Target Click Funds are managed by Investments Inc. and the logo are trademarks of Industrial Alliance Insurance and Financial Services Inc. and are used under licence. 04/01/