Redefining Active Management Yoonjai Shin CFA Director CI

Redefining Active Management Yoonjai Shin, CFA Director, CI Investment Consulting

Agenda • CI Investment Consulting team • Redefining active management • Market outlook 2

CI Investment Consulting Team Alfred Lam, CFA VP & Portfolio Manager Investment strategy / Asset allocations Fund selection/ Currency strategy Communications Lewis Harkes, CFA Senior Analyst Yoonjai Shin, CFA Director Andrew Ashworth Analyst Fund/manager analysis Performance reporting Fund/manager analysis Asset allocations Currency strategy Fund selection Project management Fund/manager analysis Cash flow management Performance reporting Marchello Holditch Senior Analyst Fund/manager analysis 3

What do we manage? $20 billion in assets under management 4

Industry recognition Best Fund of Funds Award -2011 Best Fund of Funds Award -2012 Best Global Fixed Income Balanced Award -2013 5

The new normal • • Bond return expectation is very low Equity returns are more attractive but have high volatility Investors can either take more risks or demand from their portfolio manager to work harder 6

Redefining Active Management Manage/ Reduce Optimize Minimize Total return = Asset mix + Alpha + Market Beta + Currency – Tax – Fees Maximize Manage Reduce 7

Access to managers under one roof 8

Solution for every investor Expected Return % . . GIC PE expansion . Gov’t Bonds 100 e 40 i 60 e 100 i Volatility For illustration purposes only; there is no guarantee on results 9

Strong performance PSS 40 i 60 e PS Balanced Quotential Balanced Growth Portfolio Fidelity Balanced Portfolio Dynamic Edge Balanced Portfolio AGF Elements Balanced Portfolio 40% DEX, 60% TSX 2013* 9. 2 8. 3 5. 4 5. 0 4. 6 1. 9 2012 9. 2 8. 1 6. 4 8. 1 6. 0 6. 8 5. 2 2011 -2. 9 -2. 8 -4. 5 -2. 8 -3. 7 -3. 0 -1. 4 *May 31, 2013 10

Why are we out-performing? • • Superior income allocation Overweight US equity Currency hedges did not cost us even though CAD has depreciated in general Strong performance from Cambridge and QV (PSS only) 11

Outlook: US vs. Canada 26 Price-Earnings Multiples Based on 12 Month Forward Operating Earnings 26 TSX S&P 500 24 24 22 22 Overweight US 20 20 18 18 16 16 14 14 12 12 10 10 8 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 8 Bottom Up Earnings Based on CPMS (TSE) and IBES (S&P) Consensus Source: TD Securities 12

Outlook: US vs. Canada GDP growth forecast Source: CIBC 2013 2014 US 2. 0% 3. 2% Canada 1. 6% 2. 4% 13

Outlook: continued monetary easing Source: Rudebusch (FRBSF Economic Letter, 2010), Haver Analytics, Federal Reserve, CIBC 14

Outlook: volatile bond markets Volatility in bond markets leading to tactical opportunities Government of Canada benchmark bond yields - 10 year GRAPH PERIOD: 28 May 2012 - 28 May 2013 Source: Bank of Canada 15

Outlook: Canadian dollar is 17% overvalued based on Purchasing Power Parity Source: Bloomberg 16