MANAGEMENT DISCUSSION OF FUND PERFORMANCE. Investment Objective and Strategies

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1 This management report of Fiera Tactical Bond Yield Fund (the Fund ), formerly Fiera Sceptre Tactical Bond Yield Fund, performance contains financial highlights but does not contain either interim or annual financial statements of the Fund. You can get a copy of the financial statements at your request, and at no cost, by calling , by writing to us at Fiera Capital Corporation, 1501 McGill College, suite 800, Montreal, QC, H3A 3M8 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. MANAGEMENT DISCUSSION OF FUND PERFORMANCE Investment Objective and Strategies The Fund s investment objective is to generate a moderate level of current income and capital appreciation with minimal correlation to traditional forms of fixed income and equity investments primarily through exposure to fixed income securities. The Fund s objective is to provide investors with tax efficient exposure to the Fiera Tactical Bond Yield Fund II (the Reference Fund ) which is comprised primarily of publicly traded debt securities. The Fund will obtain exposure to the Reference Fund by entering into a Forward Agreement with a Counterparty. The Reference Portfolio will be held by the Reference Fund. The Fund s returns are principally based on the returns of the Reference Fund. However, the returns of the Fund do not precisely track the returns of the Reference Fund due to a number of factors, including the costs and timing of the implementation of the Forward Agreement and operating expenses incurred by the Fund. The Fund may at any time terminate all or part of a Forward Agreement prior to its maturity in order to fund distributions or redemptions of its units or to pay the Fund s expenses. Risk No material changes were made which affected the overall level of risk associated with an investment in the Fund since inception. It remains as discussed in the simplified prospectus dated October 30, Results of Operations, the Fiera Tactical Bond Yield Fund Class A units returned -1.71% after fees and Class F units returned -0.87%, while the Reference Fund s comparative benchmark index, the DEX T-Bill 91 Days Index increased 1.01% for the same period. Corporate bonds were the best performers, as a risk-on sentiment throughout most of the period kept investors from favoring federal issuances. The Fiera Tactical Bond Yield Fund s performance is linked to the performance of the Reference Fund. The significant amount of redemptions in the Fund this year, can be explained by the following: On March 21, 2013 the federal budget included measures that would eliminate certain tax benefits in investment funds that use forward contracts to convert income to capital gains for tax purposes. The budget describes this structure as "character conversion transactions". These measures apply to a forward contract entered into on or after March 21, Because the Fund employs such a transaction as part of its investment strategy, Fiera Capital Corporation ( Fiera ) has taken the decision to protect existing unitholders and no longer accept new or additional investments to this Fund as of the close of business

2 Monday, April 8, This measure may have deterred investors, who once where driven by the Funds tax benefits, inciting them to redeem their participation in the Fund. Furthermore, the Reference Fund s reaction to the following market events was also a contributing factor: In the first quarter of 2013, the Reference Fund was concentrated mostly in corporate bond securities and had a duration that varied throughout the period. The average duration was slightly negative, reflecting the manager s bias towards an improved economic outlook. Several tactical duration trades were made throughout the quarter as well, as short-term opportunities presented themselves. These trades, coupled with the yield from the corporate securities, were the drivers of returns over the first three months of the year. The Reference Fund then switched to a duration position that was, on average, positive for the second quarter of the year, taking a particularly long position a few days prior to the Federal Reserve ( Fed ) meeting in June. This position was the largest driver of underperformance over the period, as the Fed s relatively hawkish tone sent bond yields dramatically higher. In the third quarter of 2013, the Reference Fund retained its concentration in corporate bond securities, while the average duration was slightly negative, as a relatively hawkish tone emanating from the Fed continued to weigh on markets and push bond yields higher. Further tactical duration trades were made throughout the quarter as well, as short-term opportunities presented themselves. These trades, coupled with the yield from the corporate securities, were the drivers of outperformance over the period. The Reference Fund then switched to a duration position that was, for the most part, positive during the fourth quarter of the year, as yields appeared higher than warranted given the economic backdrop. This position was the largest driver of underperformance over the final three months of the year, as yields held their upward bias into year-end on better-than-expected economic data and expectations that the Fed would taper its asset purchase program in the near term. After an in-dept analysis of the Funds clientele and its desire to receive regular income originating from the Fund s fixed income investments, the Fund Manager decided to proceed with monthly fixed distributions. Upon establishment of the Fund, the Fund Manager anticipated sufficient performance from the Fund to support an annual distribution of $ 0.50 per unit originating from regular revenus and capital gain. To this date, the Fund Manager remains confident that the Fund can maintain the appropriate performance required to maintain the fixed distribution. However, should the current state surrounding interest rates remains, the Fund Manager may potentially need to revise his decision in order to address this new market reality. Should this scenario prevail, the current distribution policy would need to be revised to ensure the Funds potential performance along with its investment objective. It is important to remind that, in the case of a return of capital, the distribution is not the result of increased wealth, but rather a return of capital to investors. This return reduces the amount available that the Fund has to invest and create additional wealth. Recent Developments The Fiera Tactical Bond Yield Fund s recent developments are linked with those of the Reference Fund, which are the following: The first quarter of 2013 brought renewed optimism to securities markets, with risk sentiment largely positive and US equity indices rallying aggressively to new all-time highs after the country narrowly avoided a fiscal cliff. The only exceptions proved Cyprus s bailout and a brief period, post Italian elections,

3 when fears of dysfunction among the Eurozone periphery threatened progress made on the European Union (EU) debt crisis (during which bond markets rallied). Canadian shares, however, underperformed significantly during the period, as commodity prices remained relatively depressed. Economic data also improved in the US, especially employment, manufacturing and investor confidence data, while Canadian data was mediocre. The second quarter of 2013 brought renewed volatility to the market, however. April began with the Bank of Japan s quantitative easing announcement, weak US jobs data and a dramatic sell-off in gold. Risk sentiment improved in early May, though, as a rate cut from the European Central Bank (ECB) and strong US economic data, specifically a relatively strong non-farm payrolls print, increased investor confidence. Credit spreads continued to tighten over the period, as the general risk-on tone and lack of supply kept investors reaching for yield. However, things changed dramatically on May 22 as Chairman Bernanke hinted that some degree of tapering could happen within the next few meetings, sending bond yields dramatically higher over the ensuing few weeks. The third quarter of 2013 was, for the most part, a continuation of the second quarter, as yields moved steadily higher throughout the first two and a half months on rather hawkish commentary from the Fed and continued optimism in the securities markets. However, things changed in the latter half of September. Firstly, Janet Yellen (a well-known dove, that is, more concerned with unemployment than with inflation) emerged as the front-runner to succeed Chairman Bernanke at the Fed. Secondly, the Fed surprised the market by electing to forego tapering its asset purchase program during its September meeting. And thirdly, uncertainty emerged surrounding the US budget and a potential government shutdown in October. All told, the three factors combined to destabilize global securities markets, including Canada, and push yields dramatically lower into quarter-end. The fourth quarter of 2013 was driven primarily by the market s interpretation of future Fed policy. To begin, the US government did, by and large, shut its doors in early October, as a budget agreement failed to materialize before the September 30 deadline. This pushed yields higher until midway through the month, when a temporary solution was agreed upon. However, the subsequent fall in yields proved shortlived, as better-than-expected economic data in early November, particularly the non-farm payrolls print for October, caused yields to regain their upward momentum. Yields then continued to grind higher, while equities remained strong, all the way into year-end, when the Fed finally decided to begin tapering its asset purchases by $10B per month. The Fed also adjusted its unemployment target in the final meeting of the year to below 6.5%: another positive development for global risk markets. We expect credit spreads to consolidate around these levels, as there remains a decent amount of uncertainty in the market surrounding the effect of tapering and the potential for another government standoff over the US debt ceiling. We are biased toward higher yields over the short term and expect them to continue to rise throughout the next few years. Our year-end 2014 expectation for the Canadian 10-year yield is 3.25%. We are currently biased toward short duration and overweight corporate bonds versus the benchmark; however, a setback in the US fiscal situation and global economic outlook could dramatically alter our position. Effective April 9, 2013, to protect existing Unitholders of the Fund, new or additional investments to the Fund will no longer be accepted. This follows the Canadian federal budget presented on March 21, 2013, which will treat the return from the derivative investment portion of character conversion transactions, such as those employed by the Fund, as ordinary income rather than capital gains. The change applies to agreements entered into on or after March 21, Fiera is currently assessing the impact of the change on the Fund.

4 Related Party Transactions Fiera is the Manager and the Portfolio Manager of the Fund. Fiera provides or arranges for the provision of all general management and administrative services required by the Fund in its day to day operations, including establishment of brokerage arrangements relating to the purchase and sale of the investment portfolio and recordkeeping. Fiera receives a fee for these services. For providing its services to the Fund, the Manager receives annual management fees (the Management Fees ) from the Fund equal to 1.00% of the Class Net Asset Value of the Class A Units and 0.25% of the Class Net Asset Value of the Class F Units. The Management Fees are Class Expenses and are calculated and accrued on each Valuation Day and payable monthly. Also, Fiera charges to the Fund fund accounting fees which are allocated using the average weight of the Net Asset Value of each Fiera funds, and which are calculated and accrued on each Valuation Day and payable quarterly. These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by Fiera. In 2013, the Fund incurred $976,388 in management fees and $2,661 in fund accounting fees. As at December 31, 2013, the Fund had $62,063 of management fees payable and $2,661 of accrued fund accounting fees.

5 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 three periods, where applicable. FIERA TACTICAL BOND YIELD FUND (4) CLASS A (formerly FIERA SCEPTRE TACTICAL BOND YIELD FUND) The Fund s net assets per unit 2013 $ 2012 $ 2011 $ Net Assets - Beginning of period (1) (3) Increase (decrease) from operations Total revenue Total expenses (0.25) (0.26) (0.12) Realized gains (losses) for the period Unrealized gains (losses) for the period (0.01) 0.32 (0.01) Total increase (decrease) from operations (1) (0.18) 0.13 (0.07) Distributions From income (excluding dividends) From dividends From capital gains Return of capital (0.50) (0.50) (0.25) Total annual distributions (2) (0.50) (0.50) (0.25) Net assets - End of period (1) Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. (2) Distributions were paid in cash/reinvested in additional units of the Fund, or both. (3) This information is derived from the Fund s audited annual financial statements. The net assets per unit presented in the financial statements differ from the net asset value calculated for fund pricing purposes. For investments that are traded in an active market where quoted prices are readily and regularly available, Section 3855 requires bid prices (for investments held) or ask prices (for investments sold short) to be used in the fair valuation of investments, rather than the use of closing sale prices currently used for the purpose of determining Transactional NAV. (4) The Fund was created on April 26, 2011 ( the Establishment Date ), and started issuing units of Class A on June 27, 2011 ( the Commencement of Operation Date ), with a starting net asset value of $10.00 per unit.

6 FIERA TACTICAL BOND YIELD FUND CLASS A (formerly FIERA SCEPTRE TACTICAL BOND YIELD FUND) Ratios and supplemental data Net asset value ($ 000's) (1) 54,430 79,790 20,365 Number of units outstanding (1) 6,127,221 8,352,012 2,095,643 Management expense ratio (%) (2) Management expense ratio before waivers or absorptions (%) Portfolio turnover rate (%) (3) Trading expense ratio (%) (4) Net asset value per unit $ 8.89 $ 9.55 $ 9.72 (1) The information is provided as at December 31 of the periods shown. (2) Management expense ratio is based on total expenses (excluding commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the period. (3) The Fund s portfolio turnover rate indicates how actively the Fund s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the period. The higher a fund s portfolio turnover in a period, the greater the trading costs payable by the Fund in the period, and the greater the chance of an investor receiving taxable capital gains in the period. There is not necessarily a relationship between a high turnover rate and the performance of a fund. (4) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period.

7 FIERA TACTICAL BOND YIELD FUND (4) CLASS F (formerly FIERA SCEPTRE TACTICAL BOND YIELD FUND) The Fund's net assets per unit 2013 $ 2012 $ 2011 $ Net assets - Beginning of period (1) (3) Increase (decrease) from operations Total revenue Total expenses (0.12) (0.14) (0.08) Realized gains (losses) for the period Unrealized gains (losses) for the period (0.10) Total increase (decrease) from operations (1) (0.14) 0.21 (0.04) Distributions From income (excluding dividends) From dividends From capital gains Return of capital (0.50) (0.50) (0.25) Total annual distributions (2) (0.50) (0.50) (0.25) Net assets - End of period (1) (2) Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. Distributions were paid in cash/reinvested in additional units of the Fund, or both. (3) This information is derived from the Fund's unaudited semi-annual and audited annual financial statements. The net assets per unit presented in the financial statements differ from the net asset value calculated for fund pricing purposes. For investments that are traded in an active market where quoted prices are readily and regularly available, Section 3855 requires bid prices (for investments held) or ask prices (for investments sold short) to be used in the fair valuation of investments, rather than the use of closing sale prices currently used for the purpose of determining Transactional NAV. (4) The Fund was created on April 26, 2011 ( the Establishment Date ), and started issuing units of Class F on June 27, 2011 ( the Commencement of Operation Date ), with a starting net asset value of $10.00 per unit.

8 FIERA TACTICAL BOND YIELD FUND CLASS F (formerly FIERA SCEPTRE TACTICAL BOND YIELD FUND) Ratios and supplemental data Net asset value ($ 000's) (1) 24,365 28,805 4,822 Number of units outstanding (1) 2,684,760 2,981, ,073 Management expense ratio (%) (2) Management expense ratio before waivers or absorptions (%) Portfolio turnover rate (%) (3) Trading expense ratio (%) (4) Net asset value per unit $ 9.08 $ 9.66 $ 9.74 (1) (2) (3) (4) The information is provided as at December 31 of the periods shown. Management expense ratio is based on total expenses (excluding commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the period. The Fund's portfolio turnover rate indicates how actively the Fund's portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the period. The higher a fund's portfolio turnover in a period, the greater the trading costs payable by the Fund in the period, and the greater the chance of an investor receiving taxable capital gains in the period. There is not necessarily a relationship between a high turnover rate and the performance of a fund. The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period.

9 Management Fees An annual management fee is accrued daily as a percentage of the net asset value of each Class units and is paid to Fiera monthly in arrears. Management fees are used by Fiera to pay for the costs of managing and promoting the Fund. The breakdown of the services received in consideration of management fees for each Class units, as a percentage of the management fees, is as follows: Breakdown of Services Management Fees (2) Trailing Commissions Portfolio advisory services (1) Class A Units 1,00% 42,86% 57,14% Class F Units 0,25% 0% 100% (1) Includes Manager and Portfolio advisor compensation, Counterparty fees, transaction compliance, regulatory fees and insurance. (2) As compensation for managing the Reference Fund, the Reference Fund Manager receives out of the Reference Fund a management fee equal to 0,75% per annum of the net asset value of the Reference Fund. Trailing Commissions The Manager pays an investor s authorized broker, dealer or advisor trailing commissions (the Trailing Commissions ) as compensation for ongoing advise and service in respect of Class A Units. The Manager also pays Trailing Commissions to the discount broker for securities purchased through a discount brokerage account. The amounts of the Trailing Commissions vary depending on the purchase option under which the Class A Units were purchased. Trailing Commissions are accrued on each Valuation Day and are paid quarterly at the applicable percentage indicated in the table below of the Net Asset Value of the Class A Units held by clients of the authorized broker, dealer or advisor. The following table shows the applicable rate of the Trailing Commissions payable under each of the purchase options: Sales Low Load Sales Charge Option Charge Year 1 Year 2 Year 3 Year 4+ Option 0,75% 0,375% 0,375% 0,375% 0,75% Trailing Commissions may be modified or discontinued by the Manager at any time. Performance Fees For Classes A and F units, the Reference Fund s Manager receives performance fees (the Performance Fees ) from the Reference Fund based on the Reference Fund s cumulative total return relative to a benchmark daily increase of 3.5% per year. The Performance Fee is calculated on each Valuation Day. Where the Reference Fund s return exceeds the benchmark daily increase, 20% of such difference in recorded as a positive Performance Fee. Where the Reference Fund s return is less than the benchmark daily increase, 20% of such difference is recorded as a negative Performance Fee. For purposes of calculating the Performance Fee on each Valuation Day, the net asset value of the Reference Fund is

10 adjusted to exclude changes to the net asset value at the end of such Valuation Day due to (a) the issue or redemption of Reference Units; and (b) distributions made payable in respect of Reference Units. Past Performance The performance information shown below assumes that all distributions made by the Fund were reinvested in additional units of the Fund. The performance information does not take into account sales, redemption, distribution or other optional charges that, if applicable, would have reduced returns or performance. Mutual funds are not guaranteed. How the Fund performed in the past does not necessarily indicate how it will perform in the future.

11 Year-by-Year Returns The following bar 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. The chart shows, in percentage terms, how much an investment in the Fund made on the first day of each financial year would have grown or decreased by the last day of each financial year. Class A units Annual returns for the periods ended December 31, * From June 27, 2011 to December 31, 2011 Class F units Annual returns for the periods December 31, * From June 27, 2011 to December 31, 2011

12 Annual Compound Returns The following table compares the historical annual compound total returns of Class A and F units of the Fund with the DEX TBILLS 91 DAYS INDEX (which measures the return attributable to 91-day Treasury Bills) as per the Reference Fund. The Class A units underperformed the Index since inception and over the 1 year period. Class F units outperformed the Index since inception and underperformed over the 1 year period. For further information on the performance of the Fund, please refer to the Results of Operations section of the present document. Since Commencement of Operation Date (June 27, 2011) Past 10 years Past 5 years Past 3 years Past 1 year YTD Fiera Tactical Bond Yield Fund - Class A 0, ,71-1,71 DEX T-Bills 91 days Index 1, ,01 1,01 Since Commencement of Operation Date (June 27, 2011) Past 10 years Past 5 years Past 3 years Past 1 year YTD Fiera Tactical Bond Yield Fund - Class F 1, ,87-0,87 DEX T-Bills 91 days Index 1, ,01 1,01

13 Summary of Investment Portfolio as at December 31, 2013 The Fund s performance is related to that of the Reference Fund through the use of a forward purchase agreement. The following is an outline of the investments held in the Reference Fund as a percentage of its net asset value. Sector Mix % of Net Asset Value Government and Guaranteed Bonds 6.00 Corporate Bonds Cash and Cash Equivalents 6.10 Futures Contracts 1.30 Net Other Assets Top 25 Investments % % of Net Asset Value 1 CIBC Capital Trust, FRN Jun 30, Canadian Western Bank Dec 17, HSBC Bank Canada Jan 14, Cash and Cash Equivalents Omers Realty Corp. Jun 5, Bank of Nova Scotia Oct 18, Laurentian Bank of Canada Oct 19, Reliance LP Mar 15, TD Capital Trust IV, FRN Jun 30, TransCanada Pipelines Ltd. Nov 15, BHP Billiton Finance Ltd. May 15, Sun Life Capital Trust II Dec 31, SNC-Lavalin Innisfree McGill Finance Inc. Jun 30, Home Trust Co. Dec 10, EnerCare Solutions Inc. Feb 3, BP LP Jan 9, SEC LP and Arci Ltd. Aug 29, GE Capital Canada Funding Co. May 31, Cadillac Fairview Finance Trust Jan 25, Royal Office Finance LP Nov 12, Royal Bank of Canada Mar 12, Health Montreal Collective LP Sep 30, Granite Reit Holdings LP Oct 2, SP LP / SP1 LP Jun 15, CDP Financial Inc. Jul 15, Total Net Asset Value: $78,794,746

14 The summary of investment portfolio may change due to ongoing portfolio transactions of the Fund. You may obtain quarterly updates to the Fund s holdings free of charge by calling , by writing to us at Fiera Capital Corporation, 1501 McGill College, suite 800, Montreal, QC, H3A 3M8 or by visiting our website at or SEDAR at