STRATEGY PROFILES AND RESULTS
MARCH 2017
C2 - Inside Front Cover
Table of Contents
CORPORATE PROFILE
2
FIXED INCOME
Money Market
Active Fixed Income – Universe
Active Fixed Income – Long Term
Active Fixed Income – Credit
Active Short Term Municipal Fixed Income
Infrastructure Bonds
Infrastructure Debt
Tactical Fixed Income
Integrated Fixed Income – Universe
Integrated Fixed Income – Short Term
Integrated Fixed Income – Short/Mid-Term
Integrated Fixed Income – Credit
Preferred Shares Universe
Preferred Shares Opportunistic
High Yield Bonds
Global Fixed Income
GLOBAL EQUITY
4
6
8
10
12
14
16
18
20
22
24
26
28
30
32
34
LIABILITY DRIVEN INVESTMENT
LDI Pooled Funds and Customized Solutions 36
CANADIAN EQUITY
Canadian Equity
Canadian Equity – Growth
Canadian Equity – Core
Canadian Equity Ex-Energy
Canadian Low Volatility Equity Strategy (LVES)
High Income Equity
Canadian Equity – Small Capitalization “Core”
Canadian Equity – Small Capitalization
Canadian Equity Opportunities
US Equity
US Equity Small Cap
International Equity
Global Equity
Global Equity Focus
All Country World Equity
Emerging Markets Equity
56
58
60
62
64
66
68
NON-TRADITIONAL
Market Neutral
Long/Short Equity
Fiera Active Trading Fund
Diversified Lending
Fiera Infrastructure Fund
Fiera Real Estate Fund
Fiera Properties CORE Fund
Fiera Comox Agriculture Fund
Multi-Strategy Income
Income Opportunities
70
72
74
76
78
80
82
84
86
88
BALANCED
38
40
42
44
46
48
50
52
54
Balanced Core Fund
Balanced Integrated Fund
Balanced Endowment, Foundation and Trust (EFT) Fund
90
92
94
ESG AND ETHICAL
Fiera Capital’s ESG and Ethical Strategies
96
AS AT MARCH 31, 2017
CORPORATE PROFILE
OVERVIEW
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada ’s leading investment managers.
Fiera Capital is a prominent Canadian investment management firm
recognized for its excellence in portfolio management, innovative
and personalized investment solutions, and its ability to surpass client
expectations. We offer a unique expertise in both traditional and absolute
return investment strategies and are one of only a handful of independent
investment firms providing extensive expertise in the following areas:
Fixed Income
Global Equity
LDI Solutions
Alternative strategies
Canadian Equity
Asset Allocation
Our structure promotes excellence within our specialized investment
teams by combining the flexible and efficient environment of a multi-style
investment manager with the scale of resources offered by one of Canada’s
leading investment firms. Integrated solutions diversified by asset class
and investment style, and supported by a disciplined risk management
framework, are key to achieving our superior returns.
With offices in 13 cities spanning Canada, the United States, the United
Kingdom and Europe, the firm has over 600 employees and benefits from
the expertise and diversified experience of approximately 150 investment
professionals, dedicated to servicing our highly diversified clientele comprised
of pension funds, foundations, religious and charitable organizations, high
net worth individuals, financial institutions, mutual funds and managed
asset platforms.
DISTRIBUTION OF ASSETS
BY ASSET CLASS
Fixed Income
Equity
Alternative Strategies
Asset Allocation and Other
Total
$63.4 B
$47.7 B
$6.5 B
$4.5 B
$122.1 B
52%
39%
5%
4%
100%
$62.1 B
$33.7 B
$26.3 B
$122.1 B
51%
28%
21%
100%
BY MARKET SEGMENT
Institutional Markets
Retail Markets
Private Wealth
Total
Assets under management include $2.3 billion managed by Fiera Capital’s partially-owned affiliates.
OWNERSHIP
Fiera Capital is controlled and partly-owned by its principals. A group of employees including senior management and investment professionals owns 16%
of the firm, public shareholders own 54%, and the remaining 30% is held by two Canadian financial institutions.
2
AS AT MARCH 31, 2017
CORPORATE PROFILE
Canadian and Global Equity Team
Alternative Strategies Team
Portfolio managers and analysts (Canadian Equity)
19
Portfolio managers and analysts
13
Portfolio managers and analysts (Global Equity)
8
Canadian and global equity traders
Canadian and global equity traders
5
Fiera Capital combines the flexibility and efficiency of a non-traditional
investment management boutique with the scale of resources offered by
one of Canada’s leading investment management firms. Our team offers
non-traditional strategies with the investment performance, operational
depth, level of transparency and risk control that investors seek.
Independent fundamental research is the cornerstone of our Canadian
and Global Equity approaches.
Fiera Capital’s professionals are divided into Growth, Core, Value, Small
Cap, Small Cap Core, Selexia and Global (US, international and global)
teams where each group conducts in-depth fundamental research across
all sectors. Each team conducts on average 300 to 400 company visits and
management interviews annually prior to portfolio construction.
Teamwork across these various groups allows them to benefit from
the independent and unbiased opinions of their colleagues in terms of
research, investment theses and portfolio positioning.
Fixed Income Team
5
We have designed and structured each of our non-traditional investment
strategies to benefit from our depth of expertise in the areas of equity, fixed
income and economic research, strategy structuring, risk management,
and trading.
Asset Allocation Team
Portfolio managers and analysts1
34
Our expertise in fixed income is provided by a team of accomplished
portfolio managers who benefit from an average of approximately
20 years of industry experience. The diverse academic backgrounds of
the team’s members combine actuarial sciences, economics, and finance,
as well as extensive investment experience from both insurance company
and credit agency backgrounds.
Rigorous fundamental research, independent of sell-side analysis and of
credit rating agencies, is the cornerstone of our fixed income approaches,
resulting in opinions that are independent of market views.
1
Portfolio managers and analysts
9
Fiera Capital’s Asset Allocation Team is headed by our Chief Executive
Officer, Jean-Guy Desjardins, who has accumulated over 45 years of
experience. Our asset allocation philosophy rests upon a fundamentallybased research process designed to optimize returns while striving to
preserve capital across market environments.
Our nine-member team is supported by the senior portfolio managers
from major asset classes who make recommendations and provide
valuable input regarding the evolution of capital market trends.
Including the Chief Investment Officer
Independent Administration and Support
Administrative and support groups, which are completely segregated and independent from investment management, include compliance, portfolio
administration, performance measurement and risk management. Fiera Capital’s compliance group, which is under the supervision of the Senior Vice President
Legal Affairs and Compliance, ensures that the highest ethical standards are consistently upheld at all levels of our organization.
Institutional Markets
The Fiera Capital Institutional Markets team is dedicated to providing the
highest standards in client service and satisfaction. We offer a complete
range of traditional and non-traditional investment strategies through
specialized and balanced mandates.
The philosophy embraced by the Fiera Capital Institutional Markets team
relies on a personalized approach, innovative investment solutions, as well
as on the highest possible standards of professionalism and integrity.
Strategy Profile – As at March 31, 2017
FIERA CAPITAL MONEY MARKET STRATEGIES
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Fiera Capital offers three money market strategies, with various risk-return
profiles, that are suited to our diversified clientele. They are top-down,
actively managed approaches whose primary objectives are to preserve
capital and achieve the highest possible income consistent with a low
level of risk. Through extensive credit analysis and sector rotation, these
strategies focus on high quality money market and other high quality fixedincome securities and take advantage of spread variations and interest
rate fluctuations.
Macroeconomic
Analysis
Credit analysis
Fundamental analysis of the economic environment and expected
Central Bank movements
Anticipation of short-term rate fluctuations
Tracking of issuer credit ratings as well as the general
credit environment
Analysis of issuer default risk
Continuous evaluation of securities included in the portfolio
Portfolio
construction
Risk
Management
Income generation: active sector rotation to benefit from fast changing
rates and tactical allocation to take advantage of any unusual spreads
Adequate available liquidity
Emphasis on capital protection through high quality and short term
investments
Conservative approach to credit: minimum rating R1 low or equivalent
HIGHLIGHTS
Cash In Action Strategy *
Money Market Core Strategy
Money Market Plus Strategy
Top-down and tactical,
short-term transactions
Top-down and tactical,
short-term transactions
Top-down, tactical and technical,
short-term transactions
FTSE TMX 30‑day T-bills +0.15%
FTSE TMX 91‑day T-bills +0.20%
FTSE TMX 91‑day T-bills +0.25%
Maximum of 2 years
Maximum of 2 years
Maximum of 2 years
Minimum credit rating
R1 Mid
R1 Low
R1 Low
Lead Portfolio Manager
Jeff Seaver
Frédérick Bérubé
Richard Lévesque
$1.7 B
$3.2 B
$1.2 B
Process
Performance objective
Investment horizon
Strategy AUM
CONSERVATIVE
RETURN SEEKING
* Cash in Action Strategy: AAA Rating from Standard & Poor’s.
RISK/RETURN ANALYSIS
Cash In Action
Annualized return (%)
Standard deviation (%)
Sharpe ratio
0.91
0.06
1.92
FTSE TMX 30‑day
T-bills
0.75
0.07
n/a
Money Market
Core
1.18
0.06
6.18
FTSE TMX 91‑day
T-bills
0.79
0.09
n/a
Money Market
Plus
1.15
0.09
3.89
FTSE TMX 91‑day
T-bills
0.79
0.09
n/a
Based on 5 year annualized returns.
4
Strategy Profile – As at March 31, 2017
FIERA CAPITAL MONEY MARKET STRATEGIES
PERFORMANCE (%)
Annual as at December 31
Cash In Action Fund
FTSE TMX Canada 30 Day T-Bill Index
Added value
Money Market Core Composite
FTSE TMX Canada 91 Day T-Bill Index
Added value
Money Market Plus Composite
FTSE TMX Canada 91 Day T-Bill Index
Added value
Annualized as at March 31, 2017
Cash In Action Fund
FTSE TMX Canada 30 Day T-Bill Index
Added value
Money Market Core Composite
FTSE TMX Canada 91 Day T-Bill Index
Added value
Money Market Plus Composite
FTSE TMX Canada 91 Day T-Bill Index
Added value
Q1
2017
0.18
0.13
0.05
0.26
0.10
0.16
0.24
0.10
0.14
2016
0.67
0.47
0.20
1.04
0.51
0.53
0.90
0.51
0.39
2015
0.75
0.56
0.19
1.05
0.63
0.42
0.98
0.63
0.35
2014
1.05
0.89
0.16
1.28
0.91
0.37
1.30
0.91
0.39
2013
1.03
0.96
0.07
1.28
1.01
0.27
1.31
1.01
0.30
2012
1.02
0.91
0.11
1.29
1.01
0.28
1.36
1.01
0.35
2011
1.01
0.90
0.11
1.27
1.00
0.27
1.37
1.00
0.37
2010
0.60
0.43
0.17
0.79
0.54
0.25
0.91
0.54
0.37
2009
0.97
0.36
0.61
1.09
0.62
0.47
1.67
0.62
1.05
2008
3.53
2.56
0.97
3.91
3.33
0.58
3.27
3.33
-0.06
2007
4.47
4.27
0.20
4.45
4.43
0.02
4.51
4.43
0.08
2006
4.00
3.93
0.07
4.05
3.98
0.07
4.16
3.98
0.18
1 Yr
0.69
0.48
0.21
1.05
0.48
0.57
0.90
0.48
0.42
2 Yrs
0.69
0.48
0.21
1.01
0.50
0.51
0.90
0.50
0.40
3 Yrs
0.80
0.62
0.18
1.11
0.64
0.47
1.03
0.64
0.39
4 Yrs
0.86
0.70
0.16
1.15
0.73
0.42
1.10
0.73
0.37
5 Yrs
0.89
0.75
0.14
1.18
0.79
0.39
1.15
0.79
0.36
6 Yrs
0.91
0.77
0.14
1.19
0.82
0.37
1.18
0.82
0.36
7 Yrs
0.89
0.75
0.14
1.16
0.81
0.35
1.17
0.81
0.36
8 Yrs
0.85
0.68
0.17
1.11
0.75
0.36
1.18
0.75
0.43
9 Yrs
1.07
0.81
0.26
1.33
0.93
0.40
1.34
0.93
0.41
10 Yrs
1.41
1.13
0.28
1.66
1.30
0.36
1.67
1.30
0.37
Returns are presented gross of management fees.
PORTFOLIO MANAGEMENT TEAM
ABOUT FIERA CAPITAL CORPORATION
Our money market strategies are under the leadership of three portfolio
managers, Frédérick Bérubé, CPA, CMA, CFA, with 23 years of industry
experience, Richard Levesque, with 30 years of industry experience and
Jeff Seaver, CFA, with 26 years of industry experience. They are supported
by the credit analysis skills of the Integrated Fixed Income Team.
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
5
Strategy Profile – As at March 31, 2017
ACTIVE FIXED INCOME – UNIVERSE
PERFORMANCE BENCHMARK: FTSE TMX Universe
STRATEGY DESCRIPTION*
INVESTMENT PROCESS
Extensive fundamental internal research, independent of sell‑side analysis
and credit rating agencies, is the cornerstone of this multi-strategy approach
capable of outperforming throughout the business cycle, with a volatility
similar to that of the market.
Macroeconomic
Analysis
Market
Analysis
*Also available with an ethical filter.
Independent internal fundamental analysis
Identification of business cycle phase & themes
Determination of outlook for interest rates
Analysis of market signals
Correlation analysis
Technical analysis
Focus on duration positioning & sector allocation
HIGHLIGHTS
Portfolio
Construction
& Short-term
Trading
Style
Active, multi-strategy
Process
Fundamental top-down
Expected sources of added value
Duration50%
Sector and credit
35%
Yield curve
15%
Turnover
Moderate
Duration
Benchmark ±1 to 2 years
Strategy AUM
$9.5 B
Top-Down approach to sector positioning
Priority on sector weighting vs. security selection
Diversified portfolio, position size guided by conviction
Opportunistic trading of market inneficiencies
Multiple small positions
Risk
Management
Conservative selection of corporate securities
Multi-strategy reduces risk & increases flexibility
Volatility ( ) similar to the market’s
WHY INVEST IN THIS STRATEGY
Proven approach able to outperform in virtually any market environment
Multi-strategy approach with an emphasis on active duration management allowing for quick adjustment to portfolio positioning to capture
value opportunities in rapidly changing market environments
Solid risk/reward profile as measured by information and Sharpe ratios
High quality portfolio with a conservative approach to credit selection focused on yield enhancement and a superior level of liquidity
Extremely stable team with an average of 20 years of investment experience including infrastructure bonds specialty
PERFORMANCE (%)
Annual as at December 31
AFI – Universe Composite
FTSE TMX Universe
Added value
Annualized as at March 31, 2017
AFI – Universe Composite
FTSE TMX Universe
Added value
Q1
2017
1.38
1.24
0.14
2016
1.75
1.66
0.09
2015
3.22
3.52
-0.30
2014
8.48
8.79
-0.31
2013
-1.44
-1.19
-0.25
2012
4.78
3.60
1.18
2011
10.56
9.67
0.89
2010
7.72
6.74
0.98
2009
6.55
5.41
1.14
2008
6.42
6.41
0.01
2007
4.25
3.68
0.57
2006
4.00
4.06
-0.06
1 Yr
1.71
1.51
0.20
2 Yrs
1.40
1.14
0.26
3 Yrs
3.94
4.09
-0.15
4 Yrs
3.10
3.27
-0.17
5 Yrs
3.56
3.52
0.04
6 Yrs
4.75
4.54
0.21
7 Yrs
4.87
4.62
0.25
8 Yrs
5.10
4.68
0.42
9 Yrs
5.09
4.71
0.38
10 Yrs
5.21
4.82
0.39
SI 1
6.13
5.81
0.32
Returns are presented gross of management fees
1 Since inception (January 1, 1997)
6
Strategy Profile – As at March 31, 2017
ACTIVE FIXED INCOME – UNIVERSE
PERFORMANCE BENCHMARK: FTSE TMX Universe
RISK/RETURN ANALYSIS
PORTFOLIO POSITIONING (%)
Portfolio
6.13
1.00
3.69
0.74
0.98
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (2.51%)
FTSE TMX
Universe
5.81
1.00
3.67
n/a
0.90
Composite, Since inception (January 1, 1997)
PORTFOLIO STRUCTURE – DURATION
Average coupon (%)
Yield (%)
Adjusted modified duration (Year)
Modified Duration by Sector
Cash and money market
Canada
Provincials/Municipals
Corporates
Modified Duration by Term
Short (1 to 5 years)
Mid (5 to 10 years)
Long (> 10 years)
Portfolio
2.93
2.16
7.32
FTSE TMX
Universe
3.45
2.06
7.35
Difference
-0.52
0.10
-0.03
0.00
2.14
3.39
1.79
0.00
2.19
3.46
1.70
0.00
-0.05
-0.07
0.09
0.90
2.07
4.35
1.27
1.48
4.60
-0.37
0.59
-0.25
PORTFOLIO MANAGEMENT TEAM
Art Yeates, MBA, CFA and Gaétan Dupuis, M.Sc., both Senior Portfolio
Managers, are the strategy’s lead managers. They benefit from 32 and
27 years of respective investment experience and have been with the
firm for 24 and 16 years. They are supported by Jean-Guy Mérette and David
Frei, CFA, both Portfolio Managers, and by one analyst. They also benefit from
the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
Sector Allocation (%)
Cash and
money market
Curve Positioning (%)
0
0
1
45
41
49
< 5 years
37
28
Canada
23
5 to 10 years
30
21
22
36
40
40
Provincials /
Municipals
Corporates
32
29
30
> 10 years
27
31
37
Credit Rating Allocation 1,2
AAA
AA
A
BBB
FTSE TMX Universe
41
27
21
10
Portfolio – March 31, 2017
31
32
27
10
Portfolio – December 31, 2016
24
36
28
11
1 Totals may not sum to 100% due to money market holdings.
2 Total may not sum to 100% due to non-rated securities.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
7
Strategy Profile – As at March 31, 2017
ACTIVE FIXED INCOME – LONG TERM
PERFORMANCE BENCHMARK: FTSE TMX Long Term
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Extensive fundamental internal research, independent of sell‑side analysis
and credit rating agencies, is the cornerstone of this multi-strategy approach
capable of outperforming throughout the business cycle, with a volatility
similar to that of the market.
Macroeconomic
Analysis
Market
Analysis
HIGHLIGHTS
Active, multi-strategy,
emphasis on sector selection
Process
Fundamental top-down
Expected sources of added value
Duration60%
Sector and credit
35%
Yield curve
5%
Moderate
Duration
Benchmark ±1 year
Strategy AUM
$3.8 B
Identification of business cycle phase & themes
Determination of outlook for interest rates
Analysis of market signals
Correlation analysis
Technical analysis
Focus on duration positioning & sector allocation
Style
Turnover
Independent internal fundamental analysis
Portfolio
Construction
& Short-term
Trading
Top-Down approach to sector positioning
Priority on sector weighting vs. security selection
Diversified portfolio, position size guided by conviction
Opportunistic trading of market inneficiencies
Multiple small positions
Risk
Management
Conservative selection of corporate securities
Multi-strategy reduces risk & increases flexibility
Volatility ( ) similar to the market’s
WHY INVEST IN THIS STRATEGY
Longer duration enables pension funds to better align assets with liabilities
Proven approach able to outperform in virtually any market environment
Multi-strategy approach with an emphasis on active duration management allowing for fast adjustment to portfolio positioning in order to
capture value opportunities in rapidly changing market environments
Solid risk/reward profile as measured by information and Sharpe ratios
High quality portfolio with a conservative approach to credit selection focused on yield enhancement and a superior level of liquidity
Extremely stable team with an average of 20 years of investment experience including infrastructure bonds specialty
PERFORMANCE (%)
Annual as at December 31
AFI – Long Composite
FTSE TMX Long Term
Added value
Annualized as at March 31, 2017
AFI – Long Composite
FTSE TMX Long Term
Added value
Q1
2017
1.98
1.88
0.10
2016
2.63
2.47
0.16
2015
3.55
3.80
-0.25
2014
16.69
17.48
-0.79
2013
-6.04
-6.16
0.12
2012
6.04
5.21
0.83
2011
19.12
18.13
0.99
2010
12.32
12.52
-0.20
2009
5.47
5.49
-0.02
2008
4.07
2.66
1.41
2007
4.10
3.44
0.66
2006
4.06
4.08
-0.02
1 Yr
1.95
1.72
0.23
2 Yrs
0.79
0.57
0.22
3 Yrs
6.37
6.59
-0.22
4 Yrs
4.49
4.61
-0.12
5 Yrs
4.83
4.85
-0.02
6 Yrs
7.13
7.05
0.08
7 Yrs
7.38
7.21
0.17
8 Yrs
7.36
7.30
0.06
9 Yrs
6.90
6.61
0.29
10 Yrs
6.70
6.40
0.30
SI 1
7.19
6.91
0.28
Returns are presented gross of management fees
1 Since inception (July 1, 1998)
8
Strategy Profile – As at March 31, 2017
ACTIVE FIXED INCOME – LONG TERM
PERFORMANCE BENCHMARK: FTSE TMX Long Term
RISK/RETURN ANALYSIS
PORTFOLIO POSITIONING (%)
FTSE TMX
Portfolio Long Term
7.19
6.91
0.98
1.00
6.60
6.71
0.47
n/a
0.72
0.67
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (2.43%)
Composite, Since inception ( July 1, 1998)
PORTFOLIO STRUCTURE – DURATION
Average coupon (%)
Yield (%)
Adjusted modified duration (Year)
Modified Duration by Sector
Cash and money market
Canada
Provincials/Municipals
Corporates
Modified Duration by Term
< 10 years
10 to 20 years
20 to 30 years
> 30 years
FTSE TMX
Portfolio Long Term
4.19
4.64
3.25
3.16
14.32
14.40
Sector Allocation (%)
Cash and
money market
Canada
Curve Positioning (%)
0
0
0
0
< 10 years
7
9
35
24
19
15
10 to 20 years
54
48
52
Provincials /
Municipals
15
15
55
62
60
20 to 30 years
23
Difference
-0.45
0.09
-0.08
0.00
2.29
7.82
4.21
0.00
3.47
7.99
2.95
0.00
-1.18
-0.17
1.26
0.13
3.06
8.47
2.66
0.09
3.73
8.61
1.97
0.04
-0.67
-0.14
0.69
PORTFOLIO MANAGEMENT TEAM
Art Yeates, MBA, CFA and Gaétan Dupuis, M.Sc., both Senior Portfolio
Managers, are the strategy’s lead managers. They benefit from 32 and
27 years of respective investment experience and have been with the
firm for 24 and 16 years. They are supported by Jean-Guy Mérette and David
Frei, CFA, both Portfolio Managers, and by one analyst. They also benefit from
the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
Corporates
33
33
11
16
15
> 30 years
Credit Rating Allocation 1,2
AAA
AA
A
FTSE TMX Long Term
29
30
33
BBB
8
Portfolio – March 31, 2017
22
29
38
11
Portfolio – December 31, 2016
20
33
37
11
1 Totals may not sum to 100% due to money market holdings.
2 Total may not sum to 100% due to non-rated securities.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
9
Strategy Profile – As at March 31, 2017
ACTIVE SHORT TERM MUNICIPAL FIXED INCOME
PERFORMANCE BENCHMARK: FTSE TMX Canada Short Term Provincial Bond
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Extensive fundamental internal research, independent of sell‑side analysis
and credit rating agencies, is the cornerstone of this multi-strategy approach
designed for investors that are looking to decrease their exposure to interest
rate risk, maintaining an attractive current yield and focusing on capital
preservation.
HIGHLIGHTS
Style
Short-duration strategy investing
primarily in the municipal market
Process
Fundamental, focused on spread and
municipal credit analysis
Expected sources of added value
Sector and credit
85%
Duration15%
Turnover
Low
Duration
Benchmark ±0.5 year
Independent internal fundamental analysis
Macroeconomic
Analysis
Fundamental
Analysis
Identification of business cycle phase and themes
Determination of outlook for interest rates and credit spreads;
especially between provincials and municipals
Credit analysis conducted with both a quantitative and
qualitative approach
Proven credit process analyzing financial data such as average debt
and tax burden as well as ratios including population growth and
debt/‌assets
Short term maturity issues expected to be kept until maturity
Portfolio
Construction
Duration target of 3 years maturity
Target of 20% exposure to provincial bonds for liquidity purposes
Prudent allocation to non-rated municipal bonds to capture the very
attractive associated liquidity premium
Lower duration mitigates effect of interest rate increases and
associated potential losses
Risk
Management
Conservative portfolio constraints to ensure proper liquidity
and diversification
Inherent superior security of government securities presenting
low volatility
WHY INVEST IN THIS STRATEGY
Alternative or complement to traditional fixed income strategies, offering attractive returns and low volatility resulting in an attractive risk-return profile
Tool to reduce duration and mitigate risks associated with increased interest rates
High quality portfolio of government securities with a conservative approach to credit analysis
Focused on capturing the liquidity premium associated with municipal bonds
Extremely stable team with an average of 20 years of investment experience, including within the municipal bond space
PERFORMANCE (%)
As at March 31, 2017
Active S-T – Municipal Fixed Income composite
FTSE TMX Provincial Short Term
Added value
1 Month
0.32
0.14
0.17
3 months
1.12
0.61
0.51
1 year
2.43
1.07
1.36
2016
1.96
0.87
1.09
SI 1
2.63
1.37
1.26
Returns are presented gross of management fees
1 Since inception (November 1, 2015)
10
Strategy Profile – As at March 31, 2017
ACTIVE SHORT TERM MUNICIPAL FIXED INCOME
PERFORMANCE BENCHMARK: FTSE TMX Canada Short Term Provincial Bond
PORTFOLIO STRUCTURE – DURATION
Average coupon (%)
Yield (%)
Adjusted modified duration (Year)
Modified Duration by Sector
Cash and money market
Canada
Provincials/Municipals
Corporates
Modified Duration by Term
Short (< 3 years)
Mid (3 to 5 years)
Long (> 5 years)
PORTFOLIO POSITIONING (%)
Portfolio
2.11
1.83
2.91
Short Term
Provincial
Bond
3.95
1.30
2.89
Difference
-1.84
0.53
0.02
0.00
0.00
2.91
0.00
0.00
0.00
2.89
0.00
0.00
0.00
0.02
0.00
Sector Allocation (%)
Cash and
money market
0
0
0
< 3 years
Canada
0
0
0
3 to 5 years
0.86
2.03
0.00
-0.25
-0.17
0.44
PORTFOLIO MANAGEMENT TEAM
Art Yeates, MBA, CFA and Gaétan Dupuis, M.Sc., both Senior Portfolio
Managers, are the strategy’s lead managers. They benefit from 32 and
27 years of respective investment experience and have been with the
firm for 24 and 16 years. They are supported by Jean-Guy Mérette and David
Frei, CFA, both Portfolio Managers, and by one analyst. They also benefit from
the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
100
100
100
Provincials /
Municipals
Corporates
0.61
1.86
0.44
Curve Positioning (%)
44
39
45
56
52
54
0
9
> 5 years
1
0
0
0
Credit Rating Allocation 1,2
Short Term Provincial Bond
Portfolio – March 31, 2017
Portfolio – December 31, 2016
AAA
10
0
0
AA
55
10
5
A
35
88
93
BBB
0
0
0
1 Totals may not sum to 100% due to money market holdings.
2 Total may not sum to 100% due to non-rated securities.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
11
Strategy Profile – As at March 31, 2017
ACTIVE FIXED INCOME – CREDIT
PERFORMANCE BENCHMARK: FTSE TMX Corporate Universe
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Extensive fundamental internal research, independent of sell‑side analysis
and credit rating agencies, is the cornerstone of this approach focused on a
combination of sector and credit allocation and capable of outperforming
throughout the economic cycle, with a volatility below or similar to that of
the market.
Macroeconomic
Analysis
Market
Analysis
HIGHLIGHTS
Independent internal fundamental analysis
Identification of economic and credit cycles – Phase & themes
Determination of outlook for interest rates
Analysis of market signals
Correlation analysis
Technical analysis
Fundamental internal and external analysis with a focus on sector
allocation and credit selection
Style
Active, multi-strategy
Process
Fundamental top-down with an
emphasis on sector and credit allocation
Expected sources of added value
Sector allocation Security selection Duration and yield curve Turnover
Moderate
Duration
Benchmark ±0.5 years
Strategy AUM
$165 M
Portfolio
Construction
& Short-term
Trading
40%
40%
20%
Top-Down approach to sector positioning
Bottom-up approach to security selection
Selection of issuers with dominant positioning in their sectors, with
high barriers to entry
Diversified portfolio, position size guided by conviction
Multiple small positions with a focus on capital preservation
Risk
Management
Conservative selection of corporate securities
Multi-strategy reduces risk & increases flexibility
Volatility ( ) similar to the market’s
WHY INVEST IN THIS STRATEGY
Extremely stable team with an average of 20 years of investment experience including infrastructure bonds specialty
High quality portfolio with a liquid and conservative approach to credit selection
Unique combination of top-down and bottom-up analysis in the construction of a diversified credit portfolio
PERFORMANCE (%)
Annual as at December 31
AFI – Credit Composite
FTSE TMX Corporate Universe
Added value
Annualized as at March 31, 2017
AFI – Credit Composite
FTSE TMX Corporate Universe
Added value
Q1
2017
2.37
1.83
0.54
2016
4.17
3.73
0.44
2015
3.10
2.71
0.39
2014
7.67
7.59
0.08
2013
1.10
0.84
0.26
2012
6.91
6.22
0.69
2011
8.52
8.24
0.28
2010
7.85
7.34
0.51
2009
18.65
16.26
2.39
2008
0.57
0.23
0.34
2007
1.90
1.79
0.11
2006
4.26
4.39
-0.13
1 Yr
5.09
4.05
1.04
2 Yrs
3.09
2.35
0.74
3 Yrs
4.74
4.27
0.47
4 Yrs
4.15
3.77
0.38
5 Yrs
4.70
4.27
0.43
6 Yrs
5.52
5.11
0.41
7 Yrs
5.55
5.15
0.40
8 Yrs
7.07
6.31
0.76
9 Yrs
6.45
5.78
0.67
10 Yrs
6.07
5.48
0.59
SI 1
5.86
5.36
0.50
Returns are presented gross of management fees
1 Since inception (January 1, 2006)
12
Strategy Profile – As at March 31, 2017
ACTIVE FIXED INCOME – CREDIT
PERFORMANCE BENCHMARK: FTSE TMX Corporate Universe
RISK/RETURN ANALYSIS
PORTFOLIO POSITIONING (%)
Portfolio Benchmark
5.86
5.36
1.02
1.00
3.23
3.12
1.07
n/a
1.32
1.21
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (1.60%)
Sector Allocation (%)
Curve Positioning (%)
10
10
10
Communication
55
< 5 years
19
20
21
Energy
Composite, Since inception (January 1, 2006)
42
42
18
21
24
5 to 10 years
41
Financials
PORTFOLIO STRUCTURE – DURATION
Average coupon (%)
Yield (%)
Adjusted modified duration (Year)
Modified Duration by Sector
Cash and money market
Canada
Provincials/Municipals
Corporates
Communication
Energy
Financials
Industrials
Infrastructure
Real Estate
Securitization
Modified Duration by Term
Short (1 to 5 years)
Mid (5 to 10 years)
Long (> 10 years)
Portfolio Benchmark
4.74
3.91
2.86
2.52
6.07
6.22
Difference
0.83
0.34
-0.15
30
35
1.16
1.93
2.98
0.00
0.00
0.00
6.22
0.67
1.62
1.50
0.38
1.72
0.27
0.06
1.60
1.21
3.40
0.01
0.39
0.00
-0.55
-0.27
-0.18
-0.05
0.04
-0.08
0.01
-0.03
-0.44
0.72
-0.42
PORTFOLIO MANAGEMENT TEAM
Art Yeates, MBA, CFA and Gaétan Dupuis, M.Sc., both Senior Portfolio
Managers, are the strategy’s lead managers. They benefit from 32 and
27 years of respective investment experience and have been with the
firm for 24 and 16 years. They are supported by Jean-Guy Mérette and David
Frei, CFA, both Portfolio Managers, and by one analyst. They also benefit from
the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
35
33
6
Industrials
9
8
16
15
15
Infrastructure
0.01
0.39
0.00
5.67
0.40
1.44
1.45
0.42
1.64
0.28
0.03
27
> 10 years
6
6
5
Real Estate
Securitization
2
2
1
Credit Rating Allocation 1,2
AAA
AA
A
BBB
FTSE TMX Universe corporate
3
25
34
37
Portfolio – March 31, 2017
2
7
31
60
Portfolio – December 31, 2016
1
12
27
60
1 Totals may not sum to 100% due to money market holdings.
2 Total may not sum to 100% due to non-rated securities.
ABOUT FIERA CAPITAL CORPORATION
With more than $116 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
13
Strategy Profile – As at March 31, 2017
INFRASTRUCTURE BONDS
PERFORMANCE BENCHMARK: FTSE TMX Canada Long Term Provincial Bond Index
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Portfolio of high-quality, long term infrastructure bond investments that
delivers superior returns with an emphasis on safety of principal. The strategy
offers a stable, de-risking complement to traditional investment approaches.
Infrastructure
Asset Screening
Level of Government support & strength of regulatory framework
Rigorous top-down and bottom-up analysis
Focus on understanding key risk characteristics & their allocation
Through rigorous due diligence and extensive fundamental research
conducted by our highly experienced internal infrastructure investment
team, securities are carefully evaluated, selected and monitored to ensure
maximum long-term value. The strategy focuses mainly on asset selection
with an emphasis on project characteristics and structure.
HIGHLIGHTS
Type and quality of assets
Detailed counterparty analysis on all core contracting parties
Valuation
of Credit
Parameters
In-depth understanding of construction & operational approach
Extensive deal structure analysis
Evaluation of risk mitigating features & structural protections
Emphasis on long-term view & credit quality
Market Analysis
Routine comparisons to market comparables
Active evaluation of credit trends, economic & market factors
Disciplined decision-making through Investment Committee
Style
Active credit-intensive, emphasis on
security selection and structure
Process
Fundamental bottom-up and top‑down
Expected sources of added value
Security selection
Sector and credit
Turnover
Low to moderate
Duration
Mid to Long-Term
Strategy AUM
$765 M
Portfolio
Construction
and Risk
Management
60%
40%
Management of duration, liquidity & risk diversification characteristics
Active monitoring of infrastructure project performance
Recognition of value-added trade opportunities
Separation of duties ensures independence and transparency
WHY INVEST IN THIS STRATEGY
Dedicated infrastructure expert supported by highly experienced credit and portfolio management teams
Fiera’s position as a significant fixed income investor ensures access to available infrastructure debt opportunities
Disciplined, credit-focused approach with rigorous due diligence and ongoing monitoring
Complementary fixed income strategy within the context of a long term de-risking framework
Higher yielding portfolio offering a significant source of income in a low interest rate environment
PERFORMANCE (%)
Annual as at December 31
Infrastructure Bonds Composite
FTSE TMX Canada Long Term Provincial
Added value
Q1 2017
2.78
1.74
1.04
2016
3.55
2.28
1.27
2015
3.84
4.16
-0.32
2014
18.65
17.99
0.66
2013
-4.89
-6.02
1.13
2012
7.68
3.73
3.95
Annualized as at March 31, 2017
Infrastructure Bonds Composite
FTSE TMX Canada Long Term Provincial
Added value
1 Yr
3.61
1.70
1.91
2 Yrs
1.57
0.23
1.34
3 Yrs
7.39
6.88
0.51
4 Yrs
5.63
4.86
0.77
5 Yrs
6.05
4.85
1.20
SI 1
7.33
5.96
1.37
Returns are presented gross of management fees
1 Since inception (August 1st, 2011)
14
Strategy Profile – As at March 31, 2017
INFRASTRUCTURE BONDS
PERFORMANCE BENCHMARK: FTSE TMX Canada Long Term Provincial Bond Index
INFRASTRUCTURE OPPORTUNITY
Canada has a long-history of substantial
under-investment in infrastructure
30%
Over
80%
Percentage of Canadian infrastructure
that is more than 85 years old.
Percentage of Canadian infrastructure having
surpassed its life expectancy.
$123 billion
Estimated amount required by Canadian
municipalities to upgrade municipal
infrastructure to an acceptable level.
$115 billion
Amount of new infrastructure needed to fulfill
the changing needs of communities.
Over
$2 trillion
Amount that the Canadian infrastructure
deficit could balloon to in 60 years
if unchecked.
Sources:Federation of Canadian Municipalities
The Canadian Council for Public-Private Partnerships
Governments across Canada are now prioritizing infrastructure renewal in
response to this crisis resulting in significant investment opportunities for
knowledgeable investors.
Rated PPP / Renewable Bonds - Issuance in Canada
5000
4000
Amount – CAD $ millions
Approximately
Significant Investment Opportunities
in Canadian Infrastructure Bonds
3000
2000
1000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Widespread use of alternative infrastructure delivery methods such as
public-private-partnerships (PPPs) continue to create attractive investment
opportunities in Canadian infrastructure bonds.
PORTFOLIO MANAGEMENT TEAM
ABOUT FIERA CAPITAL CORPORATION
David Frei, CFA, is Fiera Capital’s in-house infrastructure bond specialist and
is the strategy’s lead portfolio manager. He is supported by Art Yeates, MBA,
CFA and Gaétan Dupuis, M.Sc., Senior Portfolio Managers for the Active Fixed
Income approach, as well as by one analyst. Together, the strategy’s three
portfolio managers possess an average of 26 years of investment experience
including extensive experience in infrastructure bond investing. They also
benefit from the collective expertise of our entire fixed income and credit
analysis team with trading desks in both Montréal and Toronto.
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
15
Strategy Profile – As at March 31, 2017
INFRASTRUCTURE DEBT
PERFORMANCE BENCHMARK: Interpolated FTSE TMX Canada Mid Provincial Bond Index & FTSE TMX Long Provincial Bond Index
STRATEGY DESCRIPTION
HIGHLIGHTS
Portfolio of high-quality, long term infrastructure related fixed-income
securities that provides yield enhancement with an emphasis on capital
preservation.
Style
Active credit-intensive, emphasis on
security selection and structure
Process
Fundamental bottom-up and top‑down
Expected sources of added value
Security selection
Sector and credit
Turnover
Low to moderate
Duration
Mid to Long-Term
Strategy AUM
$765 M
The strategy offers a stable, de-risking complement to traditional investment
approaches.
Through rigorous due diligence and extensive fundamental research
conducted by our highly experienced internal infrastructure investment
team, the strategy focuses mainly on asset selection and shall invest primarily
in debt investments relating to essential assets with monopoly characteristics
in regulated environments or with acceptable long term contractual regimes.
60%
40%
The strategy has the flexibility to optimize its portfolio through both public
and private infrastructure debt investments.
FOUR PILLARS OF INFRASTRUCTURE
Social
Transportation
Power Generation
Utilities
Hospitals
Roads
Wind
Transmission
Courthouses
Bridges
Solar
Distribution
Government Accomodations
Airports
Hydro
Essential
Communications Systems
Schools
Ports
Natural Gas
Water and Waste Water
Rail
Transit
WHY INVEST IN THIS STRATEGY
A significant source of yield enhancement in a low interest rate environment
Disciplined, credit-focused approach with rigorous due diligence and ongoing monitoring
Complementary fixed income strategy within the context of a long term de-risking framework
Low observed correlations with other asset classes
Diversified risk drivers
PERFORMANCE (%)
Annual as at December 31
Infrastructure Debt
Benchmark2
Added value
Annualized as at March 31, 2017
Infrastructure Debt
Benchmark2
Added value
1 Yr
4.38
1.51
2.88
Q1 2017
3.09
1.65
1.45
2016
3.62
1.90
1.73
2 Yrs
2.07
0.58
1.50
SI 1
1.88
0.41
1.47
Returns are presented gross of management fees
1 Since inception (February 1, 2015)
2 FTSE TMX Index Blend Based on Fund Duration
16
Strategy Profile – As at March 31, 2017
INFRASTRUCTURE DEBT
PERFORMANCE BENCHMARK: Interpolated FTSE TMX Canada Mid Provincial Bond Index & FTSE TMX Long Provincial Bond Index
INFRASTRUCTURE OPPORTUNITY
Canada has a long-history of substantial
under-investment in infrastructure
30%
Over
80%
Percentage of Canadian infrastructure
that is more than 85 years old.
Percentage of Canadian infrastructure having
surpassed its life expectancy.
$123 billion
Estimated amount required by Canadian
municipalities to upgrade municipal
infrastructure to an acceptable level.
$115 billion
Amount of new infrastructure needed to fulfill
the changing needs of communities.
Over
$2 trillion
Amount that the Canadian infrastructure
deficit could balloon to in 60 years
if unchecked.
Sources:Federation of Canadian Municipalities
The Canadian Council for Public-Private Partnerships
Governments across Canada are now prioritizing infrastructure renewal in
response to this crisis resulting in significant investment opportunities for
knowledgeable investors.
Rated PPP / Renewable Bonds - Issuance in Canada
5000
4000
Amount – CAD $ millions
Approximately
Significant Investment Opportunities
in Canadian Infrastructure Bonds
3000
2000
1000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Widespread use of alternative infrastructure delivery methods such as
public-private-partnerships (PPPs) continue to create attractive investment
opportunities in Canadian infrastructure bonds.
PORTFOLIO MANAGEMENT TEAM
ABOUT FIERA CAPITAL CORPORATION
David Frei, CFA, is Fiera Capital’s in-house infrastructure bond specialist and
is the strategy’s lead portfolio manager. He is supported by Art Yeates, MBA,
CFA and Gaétan Dupuis, M.Sc., Senior Portfolio Managers for the Active Fixed
Income approach, as well as by one analyst. Together, the strategy’s three
portfolio managers possess an average of 26 years of investment experience
including extensive experience in infrastructure bond investing. They also
benefit from the collective expertise of our entire fixed income and credit
analysis team with trading desks in both Montréal and Toronto.
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
17
Strategy Profile – As at March 31, 2017
TACTICAL FIXED INCOME
PERFORMANCE BENCHMARK: FTSE TMX Universe
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Extensive fundamental internal research results in opinions independent from
market trends and contrarian at market extremes, providing the foundation
for potentially considerable long-term active duration positioning, while
shorter term tactical trading also offers important added value opportunity.
Active, focus on duration
Process
Fundamental top-down
and short-term trading
Expected sources of added value
Yield curve
Sector and credit
Interest rate anticipation
- Short-term Trading
- Long-term duration positioning
Turnover
Above average
Duration
Benchmark ±3 years
Strategy AUM
$2.1 B
Identification of key market factors
Determination of our outlook for these factors
Analysis of market expectations
Market
Analysis
HIGHLIGHTS
Style
Independent internal fundamental analysis
Macroeconomic
Analysis
What is discounted in the market vs. our outlook
Trend analysis
Potential for significant active duration positioning
Top-down approach to sector positioning
Portfolio
Construction
& Short-term
Trading
20%
15%
65%
Priority on sector weighting vs. security selection
Concentrated portfolio guided by conviction
Contrarian at market extremes
Shorter term tactical positioning to benefit from technical analysis
Stop losses systematically employed
35%
30%
Conservative selection of corporate securities
Risk
Management
High quality, low default probability, liquid issues
Short-term trading with liquid Canada gov't bonds only
WHY INVEST IN THIS STRATEGY
Established and stable fixed income team recognized as one of the top duration managers
Broad duration ranges and an ability to quickly adjust positioning allow for strong added value, capital preservation and excellent riskadjusted performance.
Proven ability to generate strong and consistent outperformance across market conditions
Conservative approach to credit analysis aimed at identifying high quality, liquid securities offering attractive yields
PERFORMANCE (%)
Annual as at December 31
Tactical Fixed Income Composite
FTSE TMX Universe
Added value
Annualized as at March 31, 2017
Tactical Fixed Income Composite
FTSE TMX Universe
Added value
Q1
2017
1.62
1.24
0.38
2016
0.77
1.66
-0.89
2015
2.74
3.52
-0.78
2014
9.34
8.79
0.55
2013
-1.94
-1.19
-0.75
2012
5.43
3.60
1.83
2011
10.93
9.67
1.26
2010
8.95
6.74
2.21
2009
10.30
5.41
4.89
2008
3.51
6.41
-2.90
2007
4.46
3.68
0.78
2006
5.12
4.06
1.06
1 Yr
1.18
1.51
-0.33
2 Yrs
0.81
1.14
-0.33
3 Yrs
3.72
4.09
-0.37
4 Yrs
2.80
3.27
-0.47
5 Yrs
3.45
3.52
-0.07
6 Yrs
4.64
4.54
0.10
7 Yrs
4.99
4.62
0.37
8 Yrs
5.68
4.68
1.00
9 Yrs
5.21
4.71
0.50
10 Yrs
5.45
4.82
0.63
SI 1
6.86
5.81
1.05
Returns are presented gross of management fees
1 Since inception (January 1, 2000)
18
Strategy Profile – As at March 31, 2017
TACTICAL FIXED INCOME
PERFORMANCE BENCHMARK: FTSE TMX Universe
RISK/RETURN ANALYSIS
PORTFOLIO POSITIONING (%)
Portfolio
6.86
1.19
4.46
0.69
1.04
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (2.22%)
FTSE TMX
Universe
5.81
1.00
3.58
n/a
1.00
Composite, Since inception (January 1, 2000)
PORTFOLIO STRUCTURE – DURATION
AVG coupon (%)
Yield (%)
Adjusted modified duration (Year)
Modified Duration by Sector
Cash and money market
Canada
Provincials/Municipals
Corporates
Modified Duration by Term
Short (1 to 5 years)
Mid (5 to 10 years)
Long (> 10 years)
Portfolio
3.57
2.45
8.25
FTSE TMX
Universe
3.45
2.06
7.35
Sector Allocation (%)
Cash and
money market
Curve Positioning (%)
45
46
0
8
< 5 years
2
35
37
Canada
24
27
36
33
33
Provincials /
Municipals
23
17
19
5 to 10 years
32
37
> 10 years
46
27
Difference
0.12
0.39
0.90
0.00
2.58
3.60
2.07
0.00
2.19
3.46
1.70
0.00
0.39
0.14
0.37
1.08
1.20
5.96
1.27
1.48
4.60
-0.19
-0.28
1.36
PORTFOLIO MANAGEMENT TEAM
Christopher Laurie, MBA, CFA, is the strategy’s lead manager and benefits
from 30 years of investment experience. He is supported by Jane-Marie
Rocca, Senior Portfolio Manager, and also benefits from the expertise of
the Integrated Fixed Income team who provides insight on credit analysis.
Corporates
36
37
Credit Rating Allocation 1,2
AAA
AA
A
BBB
FTSE TMX Universe
41
27
21
10
Portfolio – March 31, 2017
26
20
37
9
Portfolio – December 31, 2016
29
20
39
10
1 Totals may not sum to 100% due to money market holdings.
2 Total may not sum to 100% due to non-rated securities.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
19
Strategy Profile – As at March 31, 2017
INTEGRATED FIXED INCOME – UNIVERSE
PERFORMANCE BENCHMARK: FTSE TMX Universe
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Economic and credit fundamental research supported by relative value
frameworks
Through a combination of top-down and bottom-up analysis, with an
emphasis on credit research, this strategy focuses on capital preservation
within a risk-controlled environment. The anticipation of economic cycles
and themes combined with a strong focus on credit spread and interest
rate movements allows for consistent outperformance across all market
environments.
Fundamental
Analysis
HIGHLIGHTS
Active, multi-strategy
Emphasis on credit
Process
Integration of bottom-up and
top-down analysis
Expected sources of added value
Credit and sector Duration Yield Curve Turnover
Moderate
Duration
Typically benchmark ± 0.3 year
Strategy AUM
$4.8 B
Internal credit research focusing on balance sheets, liquidity, cash flow
generation, management strategy and industry trends
Regular company meetings with access to senior management
Market
Analysis
Style
Assessment of economies as well as fiscal and monetary policies
Portfolio
Construction
Analysis of market sentiment
Predictive tools for credit spreads and rates
Monitoring of technical factors
Top-down: Focus on duration, curve, sector, issuer and credit rating
weightings
Bottom-up: Credit research views help portfolio managers identify
securities to be held in portfolios
Diversified portfolio with a focus on capital preservation
75%
15%
10%
Risk
Management
Ensure portfolio risks are compensated by aligning alpha opportunities
with risk exposures
Conservative portfolio constraints on duration and credit exposure
Multi-strategy approach reduces risk & increases flexibility
WHY INVEST IN THIS STRATEGY
Experienced fixed income team working together for close to 20 years with specialized credit sector responsibilities
Proven ability to consistently outperform through market cycles
Flexible multi-strategy approach with an emphasis on credit research and issuer selection to reduce risk
The team’s focus on yield-generating securities represents a great tool in low or rising interest rate environments
PERFORMANCE (%)
Annual as at December 31
IFI – Universe Composite
FTSE TMX Universe
Added value
Annualized as at March 31, 2017
IFI – Universe Composite
FTSE TMX Universe
Added value
Q1
2017
1.66
1.24
0.42
2016
2.35
1.66
0.69
2015
3.59
3.52
0.07
2014
9.07
8.79
0.28
-0.51
-1.19
0.68
2013
2012
4.58
3.60
0.98
2011
8.94
9.67
-0.73
2010
7.77
6.74
1.03
2009
8.57
5.41
3.16
2008
5.09
6.41
-1.32
2007
3.54
3.68
-0.14
2006
4.40
4.06
0.34
1 Yr
2.87
1.51
1.36
2 Yrs
1.69
1.14
0.55
3 Yrs
4.54
4.09
0.45
4 Yrs
3.78
3.27
0.51
5 Yrs
4.10
3.52
0.58
6 Yrs
4.91
4.54
0.37
7 Yrs
5.05
4.62
0.43
8 Yrs
5.47
4.68
0.79
9 Yrs
5.32
4.71
0.61
10 Yrs
5.32
4.82
0.50
Returns are presented gross of management fees
20
Strategy Profile – As at March 31, 2017
INTEGRATED FIXED INCOME – UNIVERSE
PERFORMANCE BENCHMARK: FTSE TMX Universe
RISK/RETURN ANALYSIS
PORTFOLIO POSITIONING (%)
Portfolio
5.32
0.97
3.47
1.00
1.16
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (1.30%)
FTSE TMX
Universe
4.82
1.00
3.54
n/a
0.99
Composite, 10 year period ending March 31, 2017
PORTFOLIO STRUCTURE – DURATION
Average Coupon (%)
Yield (%)
Adjusted Modified Duration (year)
Weighted Adjusted Modified
Duration by Sector
Cash and money market
Canada
Provincials and Municipals
Corporates
Communication
Energy
Financials
Industrials
Infrastructure
Real Estate
Securitization
Weighted Adjusted Modified
Duration by Term
Short (1 to 5 years)
Mid (5 to 10 years)
Long (> 10 years)
Portfolio
3.83
2.48
7.22
0.00
1.41
3.45
2.35
0.04
0.55
0.81
0.18
0.59
0.16
0.03
1.22
1.36
4.64
FTSE TMX
Universe
3.45
2.06
7.35
0.00
2.19
3.46
1.70
0.18
0.44
0.41
0.10
0.47
0.07
0.02
1.27
1.48
4.60
Sector Allocation (%)
Cash and
money market
Curve Positioning (%)
0
0
1
45
45
41
< 5 years
37
Canada
21
24
Provincials /
Municipals
23
22
22
5 to 10 years
36
30
30
32
32
37
> 10 years
27
Difference
0.38
0.42
-0.13
0.00
-0.78
-0.01
0.65
-0.14
0.11
0.40
0.08
0.12
0.09
0.01
-0.05
-0.12
0.04
Corporates
49
46
Credit Rating Allocation 1,2
AAA
AA
A
BBB
FTSE TMX Universe
41
27
21
10
Portfolio – March 31, 2017
25
26
29
20
Portfolio – December 31, 2016
27
24
29
19
1 Totals may not sum to 100% due to money market holdings.
2 Total may not sum to 100% due to non-rated securities.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
PORTFOLIO MANAGEMENT TEAM
Philippe Ouellette, M.Sc., CFA, is the Senior Portfolio Manager of the strategy
and benefits from 22 years of investment experience. He is assisted by Peter
Osborne, MA, CFA, Jeff Seaver, CFA and Nicolas Normandeau, M.Sc., CFA, all
three portfolio managers, and by three analysts. They respectively benefit
from 30, 26 and 14 years of investment experience. They also benefit from
the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
21
Strategy Profile – As at March 31, 2017
INTEGRATED FIXED INCOME – SHORT TERM
PERFORMANCE BENCHMARK: FTSE TMX Short Term Bond
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Economic and credit fundamental research supported by relative value
frameworks
Through a combination of top-down and bottom-up analysis, with an
emphasis on credit research, this strategy focuses on capital preservation
within a risk-controlled environment. The anticipation of economic cycles
and themes combined with a strong focus on credit spread and interest
rate movements allows for consistent outperformance across all market
environments.
Fundamental
Analysis
HIGHLIGHTS
Active, multi-strategy
Emphasis on credit
Process
Integration of bottom-up and
top-down analysis
Expected sources of added value
Credit and sector Duration Yield Curve Turnover
Moderate
Duration
Typically benchmark ± 0.3 year
Strategy AUM
$2.2 B
Internal credit research focusing on balance sheets, liquidity, cash flow
generation, management strategy and industry trends
Regular company meetings with access to senior management
Market
Analysis
Style
Assessment of economies as well as fiscal and monetary policies
Portfolio
Construction
Analysis of market sentiment
Predictive tools for credit spreads and rates
Monitoring of technical factors
Top-down: Focus on duration, curve, sector, issuer and credit
rating weightings
Bottom-up: Credit research views help portfolio managers identify
securities to be held in portfolios
Diversified portfolio with a focus on capital preservation
75%
15%
10%
Risk
Management
Ensure portfolio risks are compensated by aligning alpha opportunities
with risk exposures
Conservative portfolio constraints on duration and credit exposure
Multi-strategy approach reduces risk & increases flexibility
WHY INVEST IN THIS STRATEGY
Experienced fixed income team working together for close to 20 years with specialized credit sector responsibilities
Proven ability to consistently outperform through market cycles
Flexible multi-strategy approach with an emphasis on credit research and issuer selection to reduce risk
The team’s focus on yield-generating securities represents a great tool in low or rising interest rate environments
Systematically generating consistent excess returns across market environments
PERFORMANCE (%)
Annual as at December 31
IFI – Short Term Bond Composite
FTSE TMX Short Term Bond
Added value
Annualized as at March 31, 2017
IFI – Short Term Bond Composite
FTSE TMX Short Term Bond
Added value
Q1
2017
0.91
0.67
0.24
2016
1.80
1.01
0.79
2015
2.54
2.58
-0.04
2014
3.17
2.97
0.20
2013
2.04
1.66
0.38
2012
2.51
1.88
0.63
2011
3.64
4.70
-1.06
2010
3.77
3.48
0.29
2009
6.06
4.20
1.86
2008
8.72
8.70
0.02
2007
3.94
4.12
-0.18
2006
4.19
3.97
0.22
1 Yr
2.15
1.27
0.88
2 Yrs
1.63
1.20
0.43
3 Yrs
2.43
2.07
0.36
4 Yrs
2.37
2.01
0.36
5 Yrs
2.56
2.16
0.40
6 Yrs
2.71
2.53
0.18
7 Yrs
2.82
2.64
0.18
8 Yrs
3.02
2.68
0.34
9 Yrs
3.53
3.15
0.38
10 Yrs
3.78
3.47
0.31
SI 1
4.47
4.25
0.22
Returns are presented gross of management fees
1 Since inception (October 1, 2000)
22
Strategy Profile – As at March 31, 2017
INTEGRATED FIXED INCOME – SHORT TERM
PERFORMANCE BENCHMARK: FTSE TMX Short Term Bond
RISK/RETURN ANALYSIS
PORTFOLIO POSITIONING (%)
Portfolio
4.47
0.98
1.91
0.67
1.25
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (2.08%)
FTSE TMX
ST Bond
4.25
1.00
1.93
n/a
1.13
Composite, Since inception (October 1, 2000)
PORTFOLIO STRUCTURE – DURATION
Average Coupon (%)
Yield (%)
Adjusted Modified Duration (year)
Weighted Adjusted Modified
Duration by Sector
Cash and money market
Canada
Provincials and Municipals
Corporates
Communication
Energy
Financials
Industrials
Infrastructure
Real Estate
Securitization
Weighted Adjusted Modified
Duration by Term
Short (< 3 years)
Mid (3 to 5 years)
Long (> 5 years)
Portfolio
2.64
1.57
2.70
0.00
0.71
0.35
1.64
0.00
0.22
1.13
0.05
0.02
0.09
0.12
0.95
1.71
0.05
FTSE TMX
ST Bond
2.69
1.29
2.80
0.00
1.31
0.53
0.96
0.08
0.09
0.61
0.05
0.04
0.05
0.03
1.01
1.79
0.00
Sector Allocation (%)
Cash and
money market
Curve Positioning (%)
0
0
0
53
51
52
< 3 years
48
Canada
Provincials /
Municipals
27
24
47
47
45
3 to 5 years
18
13
16
> 5 years
0
2
3
33
Difference
-0.05
0.28
-0.10
0.00
-0.60
-0.18
0.68
-0.08
0.13
0.52
0.00
-0.02
0.04
0.09
-0.06
-0.08
0.05
Corporates
60
60
Credit Rating Allocation 1,2
AAA
AA
A
BBB
FTSE TMX Short Term Bond
53
23
14
10
Portfolio – March 31, 2017
35
34
15
15
Portfolio – December 31, 2016
32
37
16
14
1 Totals may not sum to 100% due to money market holdings.
2 Total may not sum to 100% due to non-rated securities.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
PORTFOLIO MANAGEMENT TEAM
Philippe Ouellette, M.Sc., CFA, is the Senior Portfolio Manager of the strategy
and benefits from 22 years of investment experience. He is assisted by Peter
Osborne, MA, CFA, Jeff Seaver, CFA and Nicolas Normandeau, M.Sc., CFA,
all three portfolio managers and by three analysts. They respectively benefit
from 30, 26 and 14 years of investment experience. They also benefit from
the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
23
Strategy Profile – As at March 31, 2017
INTEGRATED FIXED INCOME – SHORT/MID-TERM
PERFORMANCE BENCHMARK: Customized benchmark1
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Through a combination of top-down and bottom-up analysis, with an
emphasis on credit research, this strategy focuses on capital preservation
within a risk-controlled environment. The management team uses the
anticipation of economic cycles and themes combined with a strong focus
on credit spread and aims to improve the risk/return profile of Canadian
Universe portfolios by structuring a lower duration portfolio focused on
corporate and provincial sectors in order to generate a superior yield. The
flexible multi-strategy approach is designed to add value to market returns
primarily through interest rate anticipation, yield curve strategies and sector
and securities selection, all while applying an ethical filter in the selection
of high quality bonds.
Macroeconomic
Analysis
Fundamental
Analysis
Market Analysis
Evaluation of capital markets outlook and assessment of economies as
well as fiscal and monetary policies
Predictive tools for credit spreads and determination of interest rates
Economic and internal credit fundamental research supported by
relative value framework
Regular company meetings with access to senior management
Analysis of market sentiment
Monitoring of technical factors
Top-down: Focus on duration, curve, sector, issuer and credit
rating weightings
Portfolio
Construction
HIGHLIGHTS
Bottom-up: Credit research views help portfolio managers identify
securities to be held in portfolios
Opportunistic duration-weighted trading of similar bond issues by
capitalizing on anomalies in the market
Ethical filter applied in security selection process
Style
Active, multi-strategy,
emphasis on credit
Process
Integration of bottom-up and
top-down analysis
Expected sources of added value
Credit and sector Duration Yield Curve Turnover
Low
Duration
Typically benchmark ± 0.5 year
Risk
Management
Prudent diversification, conservative portfolio constraints and selection
of investment grade securities
Multi-strategy approach reduces risk & increases flexibility
Scenario analysis and active risk monitoring
80%
10%
10%
Benchmark: 20% FTSE TMX Canada Short Term Provincial Bond Index, 20% FTSE TMX Canada
Mid-Term Provincial Bond Index, 22.5% FTSE TMX Canada Short Term Corporate Bond Index,
22.5% FTSE TMX Mid-Term Corporate Ex BBB Bond Index, 7.5% FTSE TMX Canada Short Term
Municipal Bond Index and 7.5% FTSE TMX Canada Mid-Term Municipal Bond Index.
1 WHY INVEST IN THIS STRATEGY
Experienced fixed income team working together for close to 20 years with specialized credit sector responsibilities
Flexible multi-strategy approach with an emphasis on credit research and issuer selection to reduce risk
Reduced exposure to interest rate risk by having a lower duration than more traditional benchmarks, given the prospect of an eventual increase in
interest rate
The portfolio’s bias towards yield-generating securities represents a compelling tool in low or rising interest rate environments
Focus on combining consistent returns and maintaining an attractive current yield within an active risk management style
PERFORMANCE (%)
Annual as at December 31
IFI Short/Mid Term Composite
Benchmark2
Added value
Annualized as at March 31, 2017
IFI Short/Mid Term Composite
Benchmark2
Added value
Q1 2017
1.49
1.34
0.15
2016
2.47
1.96
0.51
1 Yr
2.87
2.32
0.55
SI 1
2.76
2.48
0.28
Returns are presented gross of management fees
1 Since inception (July 1, 2015)
2 Current benchmark: 22.5% FTSE TMX ST Corp., 20.0% FTSE TMX ST Prov., 7.5% FTSE TMX ST Muni.,
22.5% FTSE TMX MT Corp. Ex-BBB, 20.0% FTSE TMX MT Prov., 7.5% FTSE TMX MT Muni.
Ethical Screening
An exclusionary filter is applied to the investment universe and a company is deemed ineligible if it derives more than 10% of its revenue, either directly
or indirectly, from the following products: adult entertainment, alcohol, firearms, gambling, military contracting, nuclear power and tobacco. The list of
ineligible companies is provided by a leading independent firm in ESG research and analysis on a monthly basis.
24
Strategy Profile – As at March 31, 2017
INTEGRATED FIXED INCOME – SHORT/MID-TERM
PERFORMANCE BENCHMARK: Customized benchmark
PORTFOLIO STRUCTURE – DURATION
Average Coupon (%)
Yield (%)
Adjusted Modified Duration (year)
Weighted Adjusted Modified
Duration by Sector
Cash and money market
Canada
Provincials and Municipals
Corporates
Communication
Energy
Financials
Industrials
Infrastructure
Real Estate
Securitization
Weighted Adjusted Modified
Duration by Term
Short (< 3 years)
Mid (3 to 5 years)
Long (> 5 years)
PORTFOLIO POSITIONING (%)
Custom.
Portfolio benchmark
2.70
3.62
2.04
1.93
4.59
4.67
Sector Allocation (%)
Difference
-0.92
0.11
-0.08
0.00
0.05
1.96
2.58
0.00
0.00
2.58
2.09
0.00
0.05
-0.62
0.49
0.00
0.36
1.58
0.07
0.36
0.18
0.02
0.06
0.33
1.03
0.18
0.23
0.22
0.02
-0.06
0.03
0.55
-0.11
0.13
-0.04
0.00
0.48
1.15
2.95
0.45
1.00
3.21
0.03
0.15
-0.26
PORTFOLIO MANAGEMENT TEAM
Philippe Ouellette, M.Sc., CFA, is the Senior Portfolio Manager of the strategy
and benefits from 22 years of investment experience. He is assisted by Peter
Osborne, MA, CFA, Jeff Seaver, CFA and Nicolas Normandeau, M.Sc., CFA,
all three portfolio managers and by three analysts. They respectively benefit
from 30, 26 and 14 years of investment experience. They also benefit from
the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
Curve Positioning (%)
Cash and
money market
0
0
0
< 3 years
Canada
0
4
0
3 to 5 years
Provincials /
Municipals
31
27
25
36
29
27
55
41
45
33
44
47
> 5 years
45
Corporates
55
54
Credit Rating Allocation 1,2
AAA
AA
A
Customized benchmark
11
49
33
BBB
7
Portfolio – March 31, 2017
8
43
34
14
Portfolio – December 31, 2016
2
56
28
13
1 Totals may not sum to 100% due to money market holdings.
2 Total may not sum to 100% due to non-rated securities.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
25
Strategy Profile – As at March 31, 2017
INTEGRATED FIXED INCOME – CREDIT
PERFORMANCE BENCHMARK: FTSE TMX Corporate Universe
STRATEGY DESCRIPTION
INVESTMENT PROCESS
With a thorough and robust approach to credit selection, this strategy
focuses on generating a superior yield while preserving capital within a riskcontrolled environment.
Fundamental
Analysis
Internal credit research focusing on balance sheets, liquidity, cash flow
generation, management strategy and industry trends
Multiple company meetings with access to senior management
HIGHLIGHTS
Style
Economic and credit fundamental research supported by relative value
frameworks
Market
Analysis
Active fundamental bottom-up and topdown investment approach emphasizing
credit research
Process
Integration of bottom-up and top-down
analysis
Expected sources
of added value
Issuer selection Sector allocation Duration and yield curve Turnover
Moderate
Duration
Benchmark ± 0.3 year
Strategy AUM
$6.2 B
Portfolio
Construction
50%
35%
15%
Analysis of market sentiment
Predictive tools for credit spreads and rates
Monitoring of technical factors
Bottom-up: Credit research views help portfolio managers identify
securities to be held in portfolios
Well-structured research process with credit specialists focused on
specific industries with an emphasis on primary research
Diversified portfolio with a focus on capital preservation
Risk
Management
Ensure portfolio risks are compensated by aligning alpha opportunities
with risk exposures
Conservative portfolio constraints on duration and credit exposure
Multi-strategy approach reduces risk & increases flexibility
WHY INVEST IN THIS STRATEGY
Experienced fixed income team working together for close to 20 years with specialized credit sector responsibilities
Proven ability to consistently outperform across market cycles
Well-structured research process with credit specialists focus on specific industries
The team’s focus on yield-generating securities represents a great tool in low or rising interest rate environments
Systematically generating consistent excess returns across market environments
PERFORMANCE (%)
Annual as at December 31
IFI – Credit Composite
FTSE TMX Corporate Universe
Added value
Annualized as at March 31, 2017
IFI – Credit Composite
FTSE TMX Corporate Universe
Added value
1 Yr
4.86
4.05
0.81
Q1 2017
2.09
1.83
0.26
2016
4.29
3.73
0.56
2015
2.47
2.71
-0.24
2014
7.66
7.59
0.07
2013
1.13
0.84
0.29
2 Yrs
2.64
2.35
0.29
3 Yrs
4.47
4.27
0.20
4 Yrs
4.02
3.77
0.25
5 Yrs
4.48
4.27
0.21
SI 1
4.42
4.23
0.19
Returns are presented gross of management fees
1 Since inception (March 1, 2012)
26
Strategy Profile – As at March 31, 2017
INTEGRATED FIXED INCOME – CREDIT
PERFORMANCE BENCHMARK: FTSE TMX Corporate Universe
RISK/RETURN ANALYSIS
PORTFOLIO POSITIONING (%)
Portfolio Benchmark
4.42
4.23
1.00
1.00
2.89
2.90
1.03
n/a
1.25
1.18
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.80%)
SectorAllocation (%)
10
Communication
19
20
21
Energy
Portfolio Benchmark
3.94
3.91
2.73
2.52
6.02
6.22
Difference
0.03
0.21
-0.20
Industrials
41
47
47
0.00
0.00
0.00
6.22
0.67
1.62
1.50
0.38
1.72
0.27
0.06
0.00
-0.04
0.00
-0.15
-0.20
0.05
0.13
-0.10
-0.13
0.15
-0.05
27
27
27
> 10 years
6
5
4
16
12
13
Infrastructure
0.00
-0.04
0.00
6.07
0.47
1.67
1.63
0.28
1.59
0.42
0.01
18
18
19
5 to 10 years
Financials
PORTFOLIO STRUCTURE – DURATION
55
52
52
< 5 years
5
5
Composite, Since inception (March 1, 2012)
Average Coupon (%)
Yield (%)
Adjusted Modified Duration (year)
Weighted Adjusted Modified
Duration by Sector
Cash and money market
Canada
Provincials and Municipals
Corporates
Communication
Energy
Financials
Industrials
Infrastructure
Real Estate
Securitization
Weighted Adjusted Modified
Duration by Term
Short (1 to 5 years)
Mid (5 to 10 years)
Long (> 10 years)
Curve Positioning (%)
6
Real Estate
Securitization
9
9
2
0
0
Credit Rating Allocation 1,2
AAA
AA
A
BBB
BB
FTSE TMX Corporate Universe
3
25
34
37
0
Portfolio – March 31, 2017
0
10
41
46
2
Portfolio – December 31, 2016
1
10
41
48
1
1 Totals may not sum to 100% due to money market holdings.
2 Total may not sum to 100% due to non-rated securities.
1.50
1.15
3.38
1.60
1.21
3.40
-0.10
-0.06
-0.02
PORTFOLIO MANAGEMENT TEAM
Philippe Ouellette, M.Sc., CFA, is the Senior Portfolio Manager of the strategy
and benefits from 22 years of investment experience. He is assisted by Peter
Osborne, MA, CFA, Jeff Seaver, CFA and Nicolas Normandeau, M.Sc., CFA, all
three portfolio managers, and by three analysts. They respectively benefit
from 30, 26 and 14 years of investment experience. They also benefit from
the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
ABOUT FIERA CAPITAL CORPORATION
With more than $116 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
27
Strategy Profile – As at March 31, 2017
PREFERRED SHARES UNIVERSE
PERFORMANCE BENCHMARK: S&P/TSX Preferred Share Index
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Analysis of global and local economies
A thorough assessment of macroeconomic factors followed by extensive
credit and relative value analysis are the cornerstone of this active approach
resulting in high-quality diversified portfolios with low volatility. This strategy
adds substantial value through its long term positioning approach, trading
process, duration management and its understanding of the technical factors.
Fundamental
Analysis
HIGHLIGHTS
Relative Value
Analysis
Style
Active management, focus on
fundamental relative value
Process
Combination of top-down
and bottom-up
Expected sources of added value
Mainly security selection
Turnover
Low
Investment Horizon
3-5 years
Holdings (number of issuers)
70-90
Strategy AUM
$3.3 B
Thorough assessment of North American and global credit markets
In-depth credit analysis focusing on balance sheets, liquidity, cash flow
generation, management strategy and industry trends
Regular company meetings with access to senior management
Extensive relative value analysis between preferred shares, corporate
bonds, international trading levels, ratings, capital structures, sectors,
issuers, and across types of preferred shares
Monitoring of technical factors and the impacts of passively-managed
ETF mandates
Diversified portfolio with a focus on capital preservation
Risk
Management
Ensure portfolio risks are compensated by aligning alpha opportunities
with risk exposures
Daily performance tracking and reporting
WHY INVEST IN THIS STRATEGY
Higher yielding asset class offering a significant source of income in a low-yielding environment
Enhanced portfolio diversification with lower volatility
Significant tax-efficient benefit for taxable clients
Fiera’s expertise has allowed us to be amongst the largest Canadian preferred share managers
Interaction with Fiera’s investment teams to benefit from the expertise of our solid internal credit and market analysis
PERFORMANCE (%)
Annual as at December 31
Preferred Shares Universe Composite
S&P/TSX Preferred Share Index
Added value
Annualized as at March 31, 2017
Preferred Shares Universe Composite
S&P/TSX Preferred Share Index
Added value
Q1
2017
8.43
2016
9.53
2015
-12.35
2014
7.04
2013
-0.48
2012
6.57
2011
7.09
2010
10.77
2009
32.77
2008
-22.08
2007
-7.83
2006
5.04
7.51
0.92
6.98
2.55
-14.95
2.60
6.82
0.22
-2.64
2.16
5.51
1.06
5.76
1.33
7.73
3.04
26.97
5.80
-16.63
-5.45
-6.17
-1.66
4.27
0.77
1 Yr
23.97
21.87
2.10
2 Yrs
4.12
1.40
2.72
3 Yrs
2.87
0.58
2.29
4 Yrs
2.11
-0.15
2.26
5 Yrs
3.05
1.18
1.87
6 Yrs
3.52
1.74
1.78
7 Yrs
4.98
3.06
1.92
8 Yrs
7.80
5.28
2.52
9 Yrs
4.34
2.95
1.39
10 Yrs
2.88
1.90
0.98
SI 1
3.27
2.42
0.85
Returns are presented gross of management fees
1 Since inception (February 1, 2004)
28
Strategy Profile – As at March 31, 2017
PREFERRED SHARES UNIVERSE
PERFORMANCE BENCHMARK: S&P/TSX Preferred Share Index
PORTFOLIO STRUCTURE (%)
ALLOCATION (%)1
Portfolio
4.30
4.80
Yield to worst*
Modified duration*
S&P/TSX
Preferred
Share Index
4.20
5.70
*Based on internal calculations
COUNTRY EXPOSURE
Canada
United States
Cash and Cash Equivalents
96.6
1.0
2.4
Sector Allocation
Financials
Energy
Utilities
Telecommunications
Real Estate
Consumer Staples
Cash
55.8
23.0
7.9
5.9
4.0
1.1
2.4
60.5
22.3
8.4
3.9
3.4
1.6
0.0
Breakdown by Preferred Shares Type
TOP 10 OVER/UNDERWEIGHT BY ISSUER
Security
1. BCE
2. AltaGas
3. Brookfield Renewable
4. HSBC Bank of Canada
5. Bank of Montreal
6. Great-West Lifeco
7. RioCan REIT
8. Laurentian Bank of Canada
9. Enbridge
10. Husky Energy
Sector
Telecommunications
Energy
Energy
Financials
Financials
Financials
Real Estate
Financials
Energy
Energy
Weight (%)
+2.3
+2.0
+1.5
+1.3
+1.1
+0.9
+0.6
+0.6
+0.5
+0.5
Security
1. Brookfield Asset Management
2. Royal Bank of Canada
3. TransCanada
4. Power Financial
5. Toronto-Dominion Bank
6. Capital Power
7. Power Corp
8. Brookfield Infrastructure Partners
9. Manulife Financial
10. Brookfield Renewable Partners
Sector
Financials
Financials
Energy
Financials
Financials
Utilities
Financials
Utilities
Financials
Energy
Weight (%)
-3.0
-1.8
-1.7
-1.2
-1.1
-0.7
-0.7
-0.7
-0.6
-0.6
Fixed-Floating
Perpetual
Floating Rate
Retractable
Cash
68.9
19.8
8.9
0.1
2.4
76.4
20.3
2.7
0.6
0.0
Credit Rating Allocation
Portfolio
S&P/TSX Preferred Share
P1
P2
P3
P4 or
lower
Cash
0.0
0.0
50.7
59.4
45.9
40.6
1.1
0.0
2.4
0.0
1 Totals may not sum to 100% due to money market holdings.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
PORTFOLIO MANAGEMENT TEAM
Nicolas Normandeau, M.Sc., CFA, is the strategy’s lead Portfolio Manager
and benefits from 14 years of industry experience. He is supported by
François Bourdon, FICA, FSA, CFA, PRM, Chief Investment Solutions Officer,
as well as by the credit analysis skills of Philippe Ouellette, M.Sc., CFA,
Peter Osborne, MA, CFA, and Jeff Seaver, CFA., and by three analysts.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
29
Strategy Profile – As at March 31, 2017
PREFERRED SHARES OPPORTUNISTIC
PERFORMANCE BENCHMARK: SOLACTIVE Preferred Share Laddered Index 1
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Analysis of global and local economies
A thorough assessment of macroeconomic factors followed by extensive
credit and relative value analysis are the cornerstone of this active approach
resulting in high-quality diversified portfolios with low volatility. This strategy
adds substantial value through its long term positioning approach, trading
process, duration management and its understanding of the technical factors.
Fundamental
Analysis
HIGHLIGHTS
Relative Value
Analysis
Style
Active management, focused
on valuation to identify
mispriced opportunities
Process
Combination of top-down
and bottom-up
Performance Benchmark
SOLACTIVE Preferred Share
Laddered Index Expected sources of added value
Mainly security selection
Turnover
Low
Investment Horizon
3-5 years
Holdings (number of issuers)
70-90
Strategy AUM
$153 M
Thorough assessment of North American and global credit markets
In-depth credit analysis focusing on balance sheets, liquidity, cash flow
generation, management strategy and industry trends
Regular company meetings with access to senior management
Extensive relative value analysis between preferred shares, corporate
bonds, international trading levels, ratings, capital structures, sectors,
issuers, and across types of preferred shares
Monitoring of technical factors and the impacts of passively-managed
ETF mandates
Diversified portfolio with a focus on capital preservation
Risk
Management
Ensure portfolio risks are compensated by aligning alpha opportunities
with risk exposures
Daily performance tracking and reporting
WHY INVEST IN THIS STRATEGY
Higher yielding asset class offering a significant source of income in a low-yielding environment
Enhanced portfolio diversification with lower volatility
Significant tax-efficient benefit for taxable clients
Fiera’s expertise has allowed us to be amongst the largest Canadian preferred share managers
Interaction with Fiera’s investment teams to benefit from the expertise of our solid internal credit and market analysis
PERFORMANCE (%)
Annual as at December 31
Preferred Shares Opportunistic Composite
SOLACTIVE Preferred Share Laddered Index 1
Added value
Q1 2017
9.45
8.38
1.07
2016
12.04
6.92
5.12
Annualized as at March 31, 2017
Preferred Shares Opportunistic Composite
SOLACTIVE Preferred Share Laddered Index 1
Added value
1 Yr
29.41
27.56
1.85
SI 1
10.65
7.17
3.48
Returns are presented gross of management fees
1 S&P/TSX Preferred Share Laddered Index until March 31st, 2016
2 Since inception (August 1, 2015)
30
Strategy Profile – As at March 31, 2017
PREFERRED SHARES OPPORTUNISTIC
PERFORMANCE BENCHMARK: SOLACTIVE Preferred Share Laddered Index PORTFOLIO STRUCTURE (%)
ALLOCATION (%)1
Portfolio
4.00
3.10
Yield to worst*
Modified duration*
SOLACTIVE
Preferred Share
Laddered Index
4.10
3.00
*Based on internal calculations
COUNTRY EXPOSURE
Canada
United States
Cash and Cash Equivalents
90.6
0.6
8.8
Sector Allocation
Financials
Energy
Utilities
Real Estate
Telecommunications
Consumer Staples
Cash
50.2
22.1
8.0
5.4
5.6
0.0
8.8
52.5
28.2
10.9
4.1
4.3
0.0
0.0
Breakdown by Preferred Shares Type
TOP 10 OVER/UNDERWEIGHT BY ISSUER
Security
1. Bank of Montreal
2. HSBC Bank
3. BCE
4. Brookfield Renewable
5. RioCan REIT
6. Sun Life Financial
7. Great-West Lifeco
8. AltaGas
9. Canadian Imperial Bank of Commerce
10. Husky Energy
Sector
Financials
Financials
Telecommunications
Energy
Real Estate
Financials
Financials
Energy
Financials
Energy
Weight (%)
+2.8
+1.7
+1.7
+1.5
+1.2
+1.1
+1.0
+0.6
+0.3
+0.3
Security
1. Brookfield Asset Management
2. Enbridge
3. TransCanada
4. Capital Power
5. TD Bank
6. Brookfield Infrastructure Partners
7. Bank of Nova Scotia
8. Brookfield Renewable Partners
9. Veresen
10. Fairfax Financials
Sector
Financials
Energy
Energy
Utilities
Financials
Utilities
Financials
Energy
Energy
Financials
Weight (%)
-3.4
-3.3
-2.5
-1.6
-1.5
-1.4
-1.3
-1.1
-0.7
-0.6
Fixed-Floating
Perpetual
Floating Rate
Cash
72.8 100.0
10.1
0.0
8.3
0.0
8.8
0.0
Credit Rating Allocation
Portfolio
SOLACTIVE Preferred Share
Laddered Index
P1
P2
P3
P4 or
lower
Cash
0.0
41.6
49.0
0.7
8.8
0.0
48.4
51.7
0.0
0.0
1 Totals may not sum to 100% due to money market holdings.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
PORTFOLIO MANAGEMENT TEAM
Nicolas Normandeau, M.Sc., CFA, is the strategy’s lead Portfolio Manager
and benefits from 14 years of industry experience. He is supported by
François Bourdon, FICA, FSA, CFA, PRM, Chief Investment Solutions Officer,
as well as by the credit analysis skills of Philippe Ouellette, M.Sc., CFA,
Peter Osborne, MA, CFA, and Jeff Seaver, CFA., and by three analysts.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
31
Strategy Profile – As at March 31, 2017
HIGH YIELD BONDS
PERFORMANCE BENCHMARK: BofA ML US HY BB/B Constrained Indez (Hedged in CAD)
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Through a combination of top-down and bottom-up analysis, our High Yield
Bond approach relies on a tactical multi-strategy style whereby portfolio
positioning across the credit spectrum, detailed security analysis as well
as active duration management all constitute opportunities for generating
value. Our approach to high yield security selection is conservative and
prudent and focuses on companies that possess strong assets, are run by an
experienced management team with a track record of success, and offer a
superior level of liquidity.
Anticipation of economic cycles and themes
Top-Down
Assessment of
Fundamentals and
Market
Expectations
Analysis
Style
Active, multi-strategy
Process
Combination of fundamental and
top-down analysis
Expected sources of added value
Sector/Quality Allocation
Security Selection
Interest Rate Anticipation Turnover
Moderate
Duration
Benchmark ±2 years
Credit quality
Minimum B1
Strategy AUM
$1.8 B
Determination of our outlook for these factors
Views discounted in the market vs. our outlook
Selection of industry and sector over/underweight
Potential for active duration positioning
Emphasize companies with strong assets and credible
management team
Security
Selection
HIGHLIGHTS
Identification of key market factors
In-depth independent research
Credit analysis and issuer diversification
Diversification of credit quality amongst issuers
In-depth credit research drives security selection within the portfolio
Well diversified portfolio by credit tier, industry and issuer
Diversification across Canadian and U.S. markets
55%
30%
15%
Ensure that alpha opportunities are capitalized based on their level of
risk/reward
Risk
Management
Conservative portfolio constraints on duration positioning and credit
exposure (minimum credit quality of B)
Emphasis on liquid issues
Hedged U.S. currency exposure
Multi-strategy approach reduces risk & increases flexibility
1At time of purchase
WHY INVEST IN HIGH YIELD BONDS?
Historically equity-like returns with capital appreciation and lower levels of volatility
Higher yields than traditional fixed income
Enhanced portfolio diversification
Low to negative correlation to other asset classes
Stronger yield can be beneficial in rising rate environment
Improved market dynamics and sound risk profile lead to increased demand for this asset class
PERFORMANCE (%)
Annual as at December 31
High Yield Bond Composite
High Yield Bond Index1
Added value
Annualized as at March 31, 2017
High Yield Bond Composite
High Yield Bond Index1
Added value
1 Yr
14.77
13.41
1.36
Q1 2017
2.27
2.18
0.09
2016
14.27
14.25
0.02
2015
-2.48
-2.67
0.19
2 Yrs
5.17
5.09
0.08
3 Yrs
4.70
4.71
-0.01
SI 2
5.29
5.23
0.06
Returns are presented gross of management fees
1 Merrill Lynch US High Yield BB/B Constrained Index (Hedged in CAD)
2 Since inception (February 1, 2014)
32
Strategy Profile – As at March 31, 2017
HIGH YIELD BONDS
PERFORMANCE BENCHMARK: BofA ML US HY BB/B Constrained Indez (Hedged in CAD)
RISK/RETURN ANALYSIS
ALLOCATION (%)1
High Yield
Portfolio Bond Index
5.29
5.23
1.05
1.00
5.67
5.29
0.07
n/a
0.82
0.87
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.65%)
Composite, Since inception (February 1, 2014)
PORTFOLIO STRUCTURE (%)
Modified duration*
Yield to worst*
Portfolio
4.68
5.68
High Yield
Bond Index
4.84
5.03
Sector Allocation
Energy
Consumer Discretionary
Consumer Staples
Financials
Industrials
Utilities
Telecommunications
Information Technology
Healthcare
Cash
10.0
28.4
4.1
14.9
12.2
3.8
12.0
3.4
7.4
3.8
14.0
27.9
2.6
9.1
18.7
2.8
10.9
6.3
7.7
0.0
4.4
25.8
58.9
7.5
5.4
31.3
55.9
11.0
Curve Positioning
*Based on internal calculations
PORTFOLIO MANAGEMENT TEAM
Angus Rogers, CFA, Senior Portfolio Manager, is responsible for the
management of the High Yield Bond portfolios and benefits from 27 years of
investment experience. He is supported by Ovidiu Sandu, MBA, CFA, Portfolio
Manager, as well as by Neil McCabe, MBA, CFA, Assistant Portfolio Manager.
< 2 years
2 to 5 years
5 to 10 years
>10 years
Credit Rating Allocation
Portfolio
High Yield Bond Index
BBB
BB
B
CCC-
3.8
0.0
40.6
57.0
48.2
43.0
3.5
0.0
1 Totals may not sum to 100% due to money market holdings.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
33
Strategy Profile – As at March 31, 2017
GLOBAL FIXED INCOME
PERFORMANCE BENCHMARK: JP Morgan International Government Bonds
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Through extensive internally-driven fundamental research on global fixed
income and currency markets, this strategy is designed to preserve capital
and enhance returns within a risk-controlled environment. The strategy
focuses on long term currency, country and duration positioning in addition
to shorter term tactical trading which allows for consistent outperformance
across market conditions.
Fundamental
Analysis
Supplemental
Analysis
Market Risk
Assessment
HIGHLIGHTS
Style
Long term currency, country and
duration positioning in addition to
tactical trading
Process
Fundamental top-down analysis
Expected sources of added value
Currency Country Duration Yield Curve Credit Short term trading
Turnover
Moderate
Duration
Benchmark ± 1 year
Strategy AUM
$250 M
Portfolio
Construction
30%
25%
20%
10%
10%
5%
Risk
Management
Assessment of global economy & financial market research
Analysis of key variables
Financial and economic scenarios
Data release analysis
Financial flow
Technical analysis
Recent volatility & correlations
Extreme behaviour
Major events
Focus on long term currency, country and duration positioning
Adapt to opportunities set
Shorter term tactical positioning to benefit from technical analysis
Conservative selection of securities
High quality, low default probability, liquid issues
Diversified sources of exposure
WHY INVEST IN THIS STRATEGY
Experienced fixed income team
Greater diversification of income
Diversified currency exposure
Broad global fixed income universe allowing for attractive opportunities
Higher yielding portfolio offering a significant source of income in a low interest rate environment
Enhanced overall portfolio risk/return profile through additional diversification
PERFORMANCE (%)
Annual as at December 31
Global Fixed Income Composite
JP Morgan International Government Bonds
Added value
Annualized as at March 31, 2017
Global Fixed Income Composite
JP Morgan International Government Bonds
Added value
1 Yr
0.54
-0.48
1.02
Q1 2017
1.86
0.88
0.98
2016
-2.28
-1.95
-0.33
2015
17.64
16.80
0.84
2014
9.21
9.74
-0.53
2013
1.54
1.91
-0.37
2 Yrs
4.14
3.72
0.42
3 Yrs
6.46
5.92
0.54
4 Yrs
6.91
6.84
0.07
5 Yrs
5.90
5.64
0.26
SI 1
5.90
5.64
0.26
Returns are presented gross of management fees
1 Since inception (April 1st, 2012)
34
Strategy Profile – As at March 31, 2017
GLOBAL FIXED INCOME
PERFORMANCE BENCHMARK: JP Morgan International Government Bonds
RISK/RETURN ANALYSIS
PORTFOLIO STRUCTURE – CURRENCY EXPOSURE (%)
Portfolio
5.90
0.94
7.84
0.20
0.65
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.79%)
Index
5.64
1.00
8.28
n/a
0.59
Composite, Since inception (April 1st, 2012)
PORTFOLIO STRUCTURE – DURATION
Adjusted modified duration (year)
Yield (%)
Modified Duration by Country
Australia
Canada
France
Italy
Ireland
Mexico
New Zealand
Norway
Portugal
Spain
Sweden
United Kingdom
United States
Total
Modified Duration by Term
Short (1 to 5 years)
Mid (5 to 10 years)
Long (10 to 20 years)
Long (> 20 years)
Total
Portfolio
5.19
2.17
0.45
0.06
0.15
0.44
0.12
0.29
0.52
0.21
0.23
0.01
0.03
0.43
2.25
5.19
1.05
1.60
0.07
2.46
5.19
PORTFOLIO MANAGEMENT TEAM
François Bourdon, FCIA, FSA, CFA, PRM, with 22 years of investment experience,
is the strategy’s lead manager and is assisted by Craig Salway, CFA, Portfolio
Manager, and by an analyst. The team is also supported by our Asset
Allocation Team, as well as by senior portfolio managers from major asset
classes who make recommendations and provide valuable input on capital
market trends.
AUD
CAD
EUR
GBP
JPY
MXN
NOK
NZD
SEK
ZAR
USD
Total
Portfolio
0.09
2.51
28.05
6.84
17.26
2.16
0.11
0.39
0.33
0.03
42.22
100.00
PORTFOLIO STRUCTURE – COUNTRY EXPOSURE (%)
Australia
Canada
France
Ireland
Italy
Mexico
New Zealand
Norway
Portugal
South Africa
Spain
Sweden
United Kingdom
United States
Total
Portfolio
5.43
20.89
1.63
0.72
5.81
6.24
5.25
3.03
5.42
3.33
1.09
0.66
3.42
37.08
100.00
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth individuals,
financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
35
Strategy Profile – As at March 31, 2017
LIABILITY DRIVEN INVESTMENT
Efficient and Flexible Solutions for Pension Funds, Insurance
Companies and Other Institutional Clients with Specialized
Structuring Needs
Fiera Capital provides diversified and innovative investment solutions to
clients, aimed at addressing their particular investment and risk management
objectives. Our specialized investment solutions provide our clients with
the required flexibility to achieve their goals by better aligning investment
strategies with their specific risk management objectives.
Our investment strategies are designed to provide leading-edge investment
tools in both the liability matching and return-seeking segments our client’s
portfolios.
Whether investing using pooled or segregated funds, our focus is on providing
customized solutions specific to our clients’ liabilities and risk tolerances.
Fiera Capital Leadership and Innovation :
A trusted source for information
Fiera Capital partners with the Canadian Institute of Actuaries (CIA) to
provide a benchmark for the valuation of pension and benefit plan liabilities.
As such, Fiera is responsible for the monthly calculation of the Fiera Capital
CIA Method Accounting Discount Rate Curve, employed by sponsors to
select the appropriate accounting discount rate to value pension and other
post-employment benefit plan liabilities.
In addition, Fiera publishes a monthly LDI Monitor summarizing the impact
of monthly market fluctuations on the financial situation of pension funds.
This publication, utilized by clients and consultants, presents the change in
assets, liabilities and surplus for 3 typical pension plans (young, steady and
mature) on a solvency, accounting and economic basis.
Fiera Capital LDI Customized Strategies
LIABILITY-MATCHING
PORTFOLIO
LDI Pooled Funds
Unlevered
Pooled
Funds
RETURN-SEEKING
PORTFOLIO
Segregated LDI Portfolios
Levered
Pooled
Funds
Interest Rate
Hedging and
Immunization
Alternative Strategies
Active
Implementation
Low Volatility
Non traditional
Absolute Return
LDI/Dynamic Risk Management Implementation
LDI POOLED FUNDS
Highlight
Our LDI Pooled funds replicate a variety of fixed income indices, offering the
flexibility to combine a number of funds to obtain the desired personalized
exposure. Our levered LDI funds increase the liability coverage and where
desired, can free-up capital for return-seeking strategies.
>> Simple, transparent and passively managed unlevered and levered
pooled funds
>> Benchmarked to a variety of fixed income indices
>> Flexibility to achieve different liability matching objectives through
optimal allocation between funds
>> Levered funds which provide interest rate exposure and can improve
the efficiency of an LDI program
Fiera LDI Pooled Funds (Interest Rate Exposure)
TYPICAL MISMATCH BETWEEN LIABILITIES
AND INVESTMENT PORTFOLIOS
REDUCTION IN LIABILITY RISK
WITH LDI POOLED FUNDS
14
14
12
Duration (Years)
Duration (Years)
12
10
8
6
4
8
6
4
2
2
0
0
2.5
7.5
15
Key Rates
Solvency Liabilities
Investment Portfolio (50% Universe/50% Long Index)
36
10
25
Total
2.5
7.5
15
Key Rates
Solvency Liabilities
Liability Matched Fiera LDI Pooled Fund Portfolio
25
Total
Strategy Profile – As at March 31, 2017
LIABILITY DRIVEN INVESTMENT
SEGREGATED LDI SOLUTIONS
PORTFOLIO MANAGEMENT TEAM
Structuring a customized liability matching portfolio can go further in terms
of achieving the desired risk management objectives of our clients. Our
customized solutions allow our pension and insurance clients to achieve both
short term volatility reduction and long term liability matching objectives
for various actuarial valuation methodologies.
Our integrated LDI team offers a comprehensive array of LDI solutions
serving pension funds, insurance companies and other institutional clients
with specialized structuring needs. Stéphane Jean, FSA, FCIA, Head of LDI, is
responsible for our LDI solutions, and benefits from over 23 years of industry
experience. He is supported by Antoni Forgues, FSA, CFA, Vice President, LDI,
Hugo Sarkisian, M.Sc., Portfolio Manager, and by three analysts. This sixperson dedicated LDI team combines expertise and experience in actuarial
mathematics, financial engineering and trading and execution to deliver
superior client outcomes and service. The team works with and benefits
from the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
Highlights
>> Focus on risk management
>> Personalized approach to reflect the unique nature of each client’s risk
tolerance, objectives and constraints
>> Flexibility of funds and products lead to efficient implementation
>> Innovative solution design to optimize long term funding objectives
with short term volatility avoidance
FIERA’S COMPLETE TOOLBOX OF LDI STRATEGIES
>> Strong active management and value added capabilities
>> Additional liability risk-reducing strategies such as
infrastructure bonds
>> LDI Complementary Return-Seeking Solutions
• Low-volatility strategies
• Real estate
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
• Infrastructure equity
• Absolute return approaches
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
37
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY
PERFORMANCE BENCHMARK: S&P/TSX Composite
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Our philosophy is based on the belief that we can build wealth for our clients
by investing in high quality and attractively valued companies. We follow
a conservative and disciplined investment approach with an emphasis on
downside protection and capital preservation.
Historical company fundamental data, going back at least 10 years
Proprietary
Intrinsic
Valuation
Model
Data on company operating history and balance sheet strength
Key metrics include: Normalized ROE, Normalized P/E, Book Value
* Also available under the following approaches:
> Ethical filter and ESG considerations
> Fossil Fuel Free
HIGHLIGHTS
Objective calculation of the intrinsic value of every stock in the
investible universe
21 Question Standardized Assessment of Quality and Valuation
Sustainable Competitive Advantages
Management team Quality and alignment
In-Depth
Fundamental
Research
Operating track record and earnings resilience
Intrinsic value: relative to peers, sector, universe and its historical levels
Style
High Quality at Attractive Valuations
Process
Fundamental, Bottom-Up, Large
Cap focus
Industry specific metrics vs. history and peers (P/E, etc.)
Turnover
Low
Market sentiment towards company
Investment horizon
36 to 48 months
Holdings
25 to 45
Sector deviation
Moderate to high, Driven by
security selection
Strategy AUM
$923 M
Discounted Cash Flow
Evaluation of key financial metrics to determine downside risk
Dynamic sizing where position size is based on level of conviction,
relative valuation and risk assessment
Portfolio
Construction & Concentrated portfolio offering significant sector diversification
Risk Management Sector allocations are a fallout of bottom-up security selection
Focus on capital preservation and downside protection
WHY INVEST IN THIS STRATEGY
Long term investing ensures emphasis on attractively valued high quality companies and consistency of performance
Disciplined, high conviction approach from which this experienced team does not deviate
Strong risk-adjusted returns, as shown by a high information ratio, top ranking relative to its peers
Conservative approach focused on capital preservation
Significant emphasis on risk management
38
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY
PERFORMANCE BENCHMARK: S&P/TSX Composite
PORTFOLIO CHARACTERISTICS
PORTFOLIO MANAGEMENT TEAM
Portfolio
S&P/TSX
42,189
46,938
Debt/Equity
Payout Ratio
Valuation
0.64
43.06
0.62
48.98
Price/Earnings (ttm)
Price/Earnings (current year median estimate)
Price/Cash flow
Price/Book
20.52
17.34
10.00
2.53
20.46
16.99
8.75
1.90
2.48
2.87
16.36
2.56
0.11
0.59
12.03
4.20
1.53
0.20
Liquidity
Average Capitalization (M$)
Risk
Dividend Yield (%)
Profitability and Growth
Return on Equity (%)
Quarterly Earnings Momentum (%)
Earning surprise
Estimate revisions (3months) (%)
Nessim Mansoor, CPA, CA, CFA, is the Senior Portfolio Manager of the strategy
and benefits from 20 years of investment experience. He is assisted by two
senior analysts.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
TOP-10 HOLDINGS (%)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
Canadian National Railway
TD Bank
Royal Bank of Canada
Bank of Nova Scotia
Constellation Software
Bank of Montreal
Brookfield Asset Management
Dollarama
CGI Group
Couche Tard
Total
Sector
Industrials
Financials
Financials
Financials
Information Technology
Financials
Financials
Consumer Discretionary
Information Technology
Consumer Staples
Weight
4.8
4.7
4.7
4.0
3.8
3.7
3.6
3.4
3.3
3.1
38.9
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
39
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY – GROWTH
PERFORMANCE BENCHMARK: S&P/TSX
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Internal and external sources
Through a dynamic approach, and while continuously seeking superior
opportunities, higher growth prospect companies with strong earnings
momentum are selected and weighted on a relative basis. Particular attention
is paid to catalysts and valuation, thereby resulting in strong outperformance
potential with low active risk.
Idea
Generation
Minimum Market Capitalization $500M
Understand business model & competition
Fundamental
Research &
Management
Meetings
HIGHLIGHTS
Style
Large cap growth
Process
Fundamental bottom-up
Turnover
Above average
Investment horizon
12 to 24 months
Holdings
40 to 50
Sector deviation
Conservative, driven by security selection
Strategy AUM
$2.3 B
17-Factor proprietary model
(Growth, momentum & valuation)
Management quality & strategic plan
Market share & profitability drivers
Sources of growth
Catalyst identification & impact on stock attractiveness
Valuation
Portfolio
Construction
& Risk
Management
Understand company relative valuation & position
Profit & cash flow assumptions to meet expectations
Relative approach to the benchmark
Security over/underweights based on conviction
Continuous review of holdings and catalysts
Target 3-4% active risk
WHY INVEST IN THIS STRATEGY
Detailed analysis aimed at identifying and understanding catalysts capable of unlocking a company’s growth opportunities
Excellent complement within the predominantly value-biased universe of Canadian equity investment strategies
Demonstrated talent for identifying opportunities across all market environments
Disciplined risk management with a strong awareness to active risk
Strong upside capture ensured by companies with superior growth prospects
PERFORMANCE (%)
Annual as at December 31
Canadian Equity Growth Composite
S&P/TSX
Added value
Q1 2017
0.42
2.41
-1.99
2016
17.90
21.08
-3.18
2015
-3.09
-8.32
5.23
2014
14.28
10.55
3.73
2013
17.31
12.99
4.32
2012
4.96
7.19
-2.23
2011
-14.99
-8.71
-6.28
2010
18.32
17.61
0.71
2009
43.10
35.05
8.05
2008
-30.64
-33.00
2.36
2007
20.63
9.83
10.80
Annualized as at March 31, 2017
Canadian Equity Growth Composite
S&P/TSX
Added value
1 Yr
14.20
18.62
-4.42
2 Yrs
4.53
5.27
-0.74
3 Yrs
7.42
5.82
1.60
4 Yrs
10.56
8.27
2.29
5 Yrs
8.92
7.84
1.08
6 Yrs
4.58
4.68
-0.10
7 Yrs
6.62
6.80
-0.18
8 Yrs
11.00
10.68
0.32
9 Yrs
5.81
4.78
1.03
10 Yrs
6.37
4.70
1.67
SI 1
6.70
4.85
1.85
Returns are presented gross of management fees
1 Since inception (January 1, 2007)
Fiera’s Canadian Equity Growth approach was launched in 2004 through a portfolio with certain investment constraints. The calendar year performance of
this portfolio for the three years prior to the launch of the non-constrained composite vs. the S&P/TSX Composite Index was 19.67% vs. 17.26% in 2006
(added value: 2.41%), 33.66% vs. 24.13% in 2005 (a.v.: 9.53%) and 14.46% vs. 14.48% in 2004 (a.v.: -0.02%).
40
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY – GROWTH
PERFORMANCE BENCHMARK: S&P/TSX
RISK/RETURN ANALYSIS
TOP-10 HOLDINGS (%)
Portfolio
6.70
1.06
14.51
0.51
0.37
107.38
97.73
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (1.39%)
Up-market capture ratio (%)
Down-market capture ratio (%)
S&P/TSX
4.85
1.00
13.25
n/a
0.26
n/a
n/a
Composite, Since inception (January 1, 2007)
PORTFOLIO CHARACTERISTICS
Liquidity
Average Capitalization (M$)
Risk
Debt/Equity
Valuation
Price/Earnings (current year median estimate)
Price/Earnings (next year mediam estimate)
Price/Cash Flow
Price/Book
Profitability and Growth
Estimated EPS Growth (%)
Next Year Estimated EPS growth (%)
Return on Equity (%)
Quarterly Earnings Momentum (%)
Earning Surprise
Estimate Revisions (3 months) (%)
Portfolio
S&P/TSX
50,843
46,938
0.62
0.62
16.80
14.38
8.57
2.02
16.99
14.95
8.75
1.90
21.93
16.84
13.34
6.64
1.20
0.63
21.92
13.59
12.03
4.20
1.53
0.20
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
Royal Bank of Canada
TD Bank
Bank of Nova Scotia
Canadian Natural Resources
CGI Group
Manulife
Canadian National Railway
Enbridge
Gildan Activewear
Canadian Pacific Railway
Sector
Financials
Financials
Financials
Energy
Information Technology
Financials
Industrials
Energy
Consumer Discretionary
Industrials
Total
Weight
8.0
7.8
6.2
5.7
5.7
5.1
4.3
3.8
3.4
3.3
53.2
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
Source: CPMS
PORTFOLIO MANAGEMENT TEAM
Jean-Philippe Choquette, CFA, is the Senior Portfolio Manager and benefits
from over 17 years of investment experience. He is assisted by Jean‑François
Gagnon, CFA, Portfolio Manager, Frank Zwarts, MBA, CFA, Portfolio Manager
and by Frédéric Bélisle, ing., MBA, Vice President. They respectively benefit
from 24, 17 and 16 years of investment experience.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
41
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY – CORE
PERFORMANCE BENCHMARK: S&P/TSX
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Fundamental core style, allowing participation in both the value and the
growth areas of the market. Portfolios consist of large and small/mid cap
securities with no extremes in either style bias or individual security positions.
Quantitative
Screening
Fundamental
Research &
Management
Meetings
HIGHLIGHTS
Style
All cap core
Process
Fundamental bottom-up
Turnover
Low
Investment horizon
36 to 48 months
Holdings
35 to 40 (plus Small Cap)
Sector deviation
Moderate, driven by security selection
Strategy AUM
$2.8 B
Top 120 S&P/TSX securities (for the large cap portion)
Management with excellent track record
Each company is met at least twice during the year
Strong EPS growth & high/rising profitability
Clean Balance Sheet & Strong Free Cash Flow (FCF)
Strong competitive position
Valuation
Seek companies trading at reasonable valuations
Disciplined ranking system employed for each security
Portfolio
Construction
& Risk
Management
Each portfolio manager ranks each security on a scale from 1 (best) to
4 (worst) every month
Manager rankings combined to determine team’s aggregate ranking
Top-ranked securities form majority of the portfolio
Broad diversification by market cap, sector & geography
Small Cap Fund weight: 5% - 20%
WHY INVEST IN THIS STRATEGY
Experienced investment team
Core approach capturing both value and growth market opportunities
Unique fundamentally-driven ranking system and disciplined approach
Long term capital appreciation with low volatility
Provides exposure to a high quality Small Cap portfolio (representing 10%-15% of the overall portfolio) managed by a dedicated small cap team
Consistent, rigorous and repeatable investment process
PERFORMANCE (%)
Annual as at December 31
Canadian Equity – Core Composite
S&P/TSX
Added value
Annualized as at March 31, 2017
Canadian Equity – Core Composite
S&P/TSX
Added value
Q1
2017
2.64
2.41
0.23
2016
15.72
21.08
-5.36
2015
-2.80
-8.32
5.52
2014
12.48
10.55
1.93
2013
16.40
12.99
3.41
2012
8.55
7.19
1.36
2011
-10.19
-8.71
-1.48
2010
17.65
17.61
0.04
2009
31.88
35.05
-3.17
2008
-32.10
-33.00
0.90
2007
11.97
9.83
2.14
2006
21.44
17.26
4.18
1 Yr
17.38
18.62
-1.24
2 Yrs
4.86
5.27
-0.41
3 Yrs
7.38
5.82
1.56
4 Yrs
9.85
8.27
1.58
5 Yrs
9.16
7.84
1.32
6 Yrs
5.72
4.68
1.04
7 Yrs
7.73
6.80
0.93
8 Yrs
11.12
10.68
0.44
9 Yrs
5.41
4.78
0.63
10 Yrs
5.33
4.70
0.63
SI 1
9.89
8.61
1.28
Returns are presented gross of management fees
1 Since inception (January 1, 1992)
42
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY – CORE
PERFORMANCE BENCHMARK: S&P/TSX
RISK/RETURN ANALYSIS
TOP-10 HOLDINGS (%)
Portfolio
9.89
0.93
13.70
0.33
0.49
98.11
89.49
S&P/TSX
8.61
1.00
14.19
n/a
0.38
n/a
n/a
Composite, Since inception (January 1, 1992)
PORTFOLIO CHARACTERISTICS
Liquidity
Average Capitalization (M$)
Risk
Debt to Total Capital (%)
Valuation
Price/Earnings (current year median estimate)
Price/Earnings (next year median estimate)
Price/Book
Dividend Yield (%)
Profitability and Growth
Reinvestment Rate (%)
Return on Invested Capital (%)
Historical 3-year EPS Growth
Portfolio
S&P/TSX
40,680
46,938
52.55
53.15
Security
Royal Bank of Canada
TD Bank
Brookfield Asset Management
Bank of Nova Scotia
Canadian Natural Resources
Waste Connections
Aliment Couche-Tard
Canadian Pacific Railway
TransCanada
Canadian National Railway
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Sector
Financials
Financials
Financials
Financials
Energy
Industrials
Consumer Staples
Industrials
Energy
Industrials
Weight
8.1
6.8
4.8
4.5
4.2
4.1
3.6
3.2
2.9
2.8
Total
45.1
DISTINCTIVE ATTRIBUTE
Strong Stock-Picking Ability through Disciplined Ranking System
Annualized Performance of Stocks Ranked 1 to 41
15
17.82
15.76
2.24
2.23
7.58
12.43
2.27
16.99
14.95
1.90
2.87
5.73
11.51
0.42
Source: CPMS
PORTFOLIO MANAGEMENT TEAM
The Canadian Equity Core strategy is managed by a team of highly experienced
Senior Portfolio Managers comprised of Ashish Chaturvedi, MBA, CFA and
Ray Halley, MBA, CFA who are responsible for the large cap component of
the portfolio, and Michael Chan, MBA, CFA, who is responsible for the small
cap component. They are assisted by one analyst covering Canadian large
and mid-cap companies and by one analyst responsible for the coverage of
small capitalization companies.
12.3
12
10.2
9
(%)
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (3.21%)
Up-market capture ratio (%)
Down-market capture ratio (%)
6.8
6
3
1.0
0
Rank 1
Rank 2
Rank 3
Rank 4
1From January 31, 2001 to March 31, 2017
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
43
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY EX-ENERGY
PERFORMANCE BENCHMARK: S&P / TSX Composite
STRATEGY DESCRIPTION
HIGHLIGHTS
Our philosophy is based on the belief that we can build wealth for our clients
by investing in high quality and attractively valued companies. We follow
a conservative and disciplined investment approach with an emphasis on
downside protection and capital preservation. Furthermore, securities from
the energy sector are excluded, and environmental, social and governance
(ESG) considerations are integrated. An ethical filter is also applied.
Style
High Quality at Attrative Valuations
Process
Fundamental, Bottom-Up,
Large Cap focus
Turnover
Low
Investment horizon
36 to 48 months
Holdings
25 to 40
Sector deviation
Moderate to high,
Driven by security selection
WHY INVEST IN THIS STRATEGY
Long term investing ensures emphasis on attractively valued high quality companies and consistency of performance
Disciplined, high conviction approach from which this experienced team does not deviate
Strong risk-adjusted returns, as shown by a high information ratio, top ranking relative to its peers
Conservative approach focused on capital preservation
Significant emphasis on risk management
Exclusion of heavily polluting and carbon-related energy companies to promote a better environment as well as renewable energy sources leading
to a lower portfolio volatility
PERFORMANCE OF INDICES FOR ILLUSTRATIVE PURPOSES (%)
Annual as at December 31
S&P / TSX Composite ex-Energy1
S&P / TSX Composite
Difference
Annualized as at March 31, 2017
S&P / TSX Composite ex-Energy1
S&P / TSX Composite
Difference
Q1 2017
4.58
2.41
2.17
2016
17.78
21.08
-3.30
2015
-4.26
-8.32
4.06
2014
15.86
10.55
5.31
2013
12.82
12.99
-0.17
2012
10.15
7.19
2.96
2011
-8.21
-8.71
0.50
2010
19.21
17.61
1.60
2009
33.48
35.05
-1.57
2008
-32.84
-33.00
0.16
2007
10.11
9.83
0.28
1 Yr
18.94
18.62
0.32
2 Yrs
6.67
5.27
1.40
3 Yrs
9.21
5.82
3.39
4 Yrs
10.59
8.27
2.32
5 Yrs
9.82
7.84
1.98
6 Yrs
6.89
4.68
2.21
7 Yrs
8.49
6.80
1.69
8 Yrs
12.41
10.68
1.73
9 Yrs
6.37
4.78
1.59
10 Yrs
5.90
4.70
1.20
1 Estimated performance of the S&P/TSX Index excluding the Energy sector according to the GICS classification methodology.
44
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY EX-ENERGY
PERFORMANCE BENCHMARK: S&P / TSX Composite
ESG/FFF FRAMEWORK
Ethical Screening
An exclusionary filter is applied to the investment universe and a company
is deemed ineligible if it derives more than 10% of its revenue, either directly
or indirectly, from the following products: adult entertainment, alcohol,
firearms, gambling, military contracting, nuclear power and tobacco. The
list of ineligible companies is provided by a leading independent firm in
ESG research and analysis on a monthly basis.
Environmental, Social and Governance (ESG)
Considerations
Fiera Capital’s CIO Office, in collaboration with our in-house risk
measurement team and MSCI ESG, a leading firm in ESG research and
analysis, have developed tools to assess the ESG performance of securities
held in each portfolio. Companies that score poorly in any of the three ESG
areas are further analyzed in order to better understand the rationale and
implications of the scores and company practices. Each of our investment
teams tailors the scope and extent of their ESG approach in order to ensure
the integrity of their underlying investment strategy.
Proxy Voting
Ex-Energy Consideration
Fiera Capital’s Proxy Voting Policy covers ESG issues and is strictly
followed by all investment teams as we believe that high standards of
corporate governance are necessary for maximizing shareholder value.
Our investment management teams therefore take ESG issues into
consideration when voting each proxy. Our teams tend to vote in favor
of ESG issues, while taking into consideration the impact on a company’s
ability to create wealth.
Using Fiera’s ESG considerations and Ethical screening as a starting point,
the strategy also applies an energy filter where a company will be deemed
ineligible if it falls in the energy sector according to the GICS classification
methodology.
PORTFOLIO MANAGEMENT TEAM
ABOUT FIERA CAPITAL CORPORATION
Nessim Mansoor, CPA, CA, CFA, is the Senior Portfolio Manager of the strategy
and benefits from 20 years of investment experience. He is assisted by two
senior analysts.
With more than $116 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
45
Strategy Profile – As at March 31, 2017
CANADIAN LOW VOLATILITY
EQUITY STRATEGY (LVES)
PERFORMANCE BENCHMARK: S&P/TSX Index
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Systematic investment process which focuses on extracting the low volatility
asset pricing anomaly. The process relies on a robust risk model that forecasts
each stock’s volatility as well as the co-movement between stocks, and an
intuitive rules-based portfolio allocation and re-balancing protocol. The LVES
aims to generate returns that are generally in line with those of its index with
a significantly lower level of volatility.
S&P/TSX Index constituents as the starting
investable universe at rebalancing date
Risk models estimated from historical
total return and volatility data
Rules-based screening and quantitative optimization aiming
to minimize volatility based on long-only constraints
HIGHLIGHTS
Investment objective
Achieve a total return volatility lower
than the index with similar returns
Process
Systematic bottom-up
Expected Sources of added value
Mainly security selection
Realized volatility
Approximately ¾ of the index volatility
Holdings
Minimum 30 securities
Trading and Execution
(Monthly Rebalancing Process)
WHY INVEST IN THIS STRATEGY
Systematic, transparent and robust portfolio construction process geared towards extracting a well-documented equity asset pricing anomaly
Realized return between 90% and 110% of the S&P/TSX return along with higher dividends and reduced volatility of about ¾ of the
S&P/‌TSX volatility
Better risk-adjusted returns than market cap weighted indexing
The LVES strategy can play a significant role in decreasing overall volatility within a de-risking plan
PERFORMANCE (%)
Annual as at December 31
Low Volatility Equity Strategy 1
S&P/TSX Index
Added value
Annualized as at March 31, 2017
Low Volatility Equity Strategy 1
S&P/TSX Index
Added value
Q1 2017
3.78
2.41
1.36
2016
14.29
21.08
-6.79
2015
0.53
-8.32
8.85
2014
17.80
10.55
7.24
2013
9.92
12.99
-3.07
1 Yr
10.61
18.62
-8.01
2 Yrs
7.24
5.27
1.96
3 Yrs
10.72
5.82
4.90
4 Yrs
10.25
8.27
1.97
SI 2
10.68
8.52
2.16
Returns are presented gross of management fees
1 Representative account
2 Since inception (October 1, 2012)
46
Strategy Profile – As at March 31, 2017
CANADIAN LOW VOLATILITY
EQUITY STRATEGY (LVES)
PERFORMANCE BENCHMARK: S&P/TSX Index
PORTFOLIO CHARACTERISTICS
TOP-10 HOLDINGS (%)
Portfolio
Liquidity
Average Capitalization (M$)
Risk
Debt/Equity
Payout Ratio
Valuation
Price/Earnings (current year median estimate)
Price/Earnings (next year median estimate)
Price/Cash Flow
Price/Book
Dividend Yield (%)
Profitability and Growth
Return on equity (%)
Quarterly earnings momentum
Earning surprise
Estimate revisions (3months) (%)
S&P/TSX
17,909
46,938
0.92
60.61
0.62
48.98
16.64
15.35
8.72
1.83
16.99
14.95
8.75
1.90
3.64
2.87
10.12
-3.05
0.17
-0.88
12.03
4.20
1.53
0.20
PORTFOLIO MANAGEMENT TEAM
Alexandre Hocquard, PhD, is the Canadian Low Volatility Equity Strategy’s
Portfolio Manager and benefits from 12 years of industry experience. He is
the Senior PM and co-head with Nicolas Papageorgiou, PhD, of the SIS team.
The SIS team combines expertise and experience in financial engineering,
trading and execution to deliver superior client outcomes and service.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
First Capital Realty
Crombie
Granite REIT
BCE
Cineplex
Hydro One
Onex
Shaw Communications
Intact Financial
Loblaw
Sector
Real Estate
Real Estate
Real Estate
Telecom. Services
Consumer Discretionary
Utilities
Financials
Consumer Discretionary
Financials
Consumer Staples
Total
Weight
3.4
3.4
3.4
3.4
3.4
3.4
3.3
3.3
3.3
3.3
33.4
ABOUT FIERA CAPITAL CORPORATION
With more than $116 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
47
Strategy Profile – As at March 31, 2017
HIGH INCOME EQUITY
PERFORMANCE BENCHMARK: S&P/TSX Composite High Dividend Index
STRATEGY DESCRIPTION
HIGHLIGHTS
High Income Equity (HIE) strategy constructs portfolios with equities that
pay a sustainable dividend, generate strong cash flows and are attractively
valued on a risk adjusted basis. Over the long-term, this approach delivers
superior risk adjusted returns.
Style
All cap value
Process
Fundamental bottom-up
Turnover
Low
Investment horizon
18 to 36 months
Holdings
25 to 35
Sector deviation
Moderate, driven by security selection
Strategy AUM
$1.4 B
INVESTMENT PROCESS
Dividend payers outperform over the long term with lower volatility
Screen
High dividend paying securities
Minimum market Cap $500M
INVESTMENT PHILOSOPHY
Business models that generate excess cash are lower risk
Understand
Understand industry dynamics, business model & cash generation
Strong
Cash Flow
Generation
Understand key drivers of profitability & growth potential
Assess company specific & industry risks
Price paid matters, limit downside risk
Value
Low risk adjusted valuation to potential return
What expectations are embedded in the stock price
The
Sweet
Spot
Superior risk adjusted returns
Attractively valued companies
Construct
Low
Risk-Adjusted
Valuation
Dividend
Payers
Ability to produce sustainable & growing dividends
Diversification by business drivers and sources of risk
Higher yield & lower volatility ( ) than the market’s
WHY INVEST IN THIS STRATEGY
Higher yielding portfolio offering a significant source of income in a low-yielding environment
Complementary equity strategy within the context of a de-risking framework
Disciplined decision-making process consistently applied in all markets
Low risk-adjusted valuations result in limited downside risk
Lower portfolio risk resulting from a focus on strong cash flow generating companies
PERFORMANCE (%)
48
Annual as at December 31
High Income Equity Composite
S&P/TSX Composite High Dividend Index1
Added value
Q1 2017
2.70
2.38
0.32
2016
27.07
28.49
-1.42
2015
-11.28
-14.55
3.27
2014
3.98
5.24
-1.26
2013
23.83
15.96
7.87
2012
10.35
7.64
2.71
2011
3.69
5.21
-1.52
2010
21.12
19.80
1.32
Annualized as at March 31, 2017
High Income Equity Composite
S&P/TSX Composite High Dividend Index1
Added value
1 Yr
21.42
21.08
0.34
2 Yrs
5.79
5.72
0.07
3 Yrs
5.44
3.85
1.59
4 Yrs
8.75
6.87
1.88
5 Yrs
9.62
7.19
2.43
6 Yrs
8.01
6.23
1.78
7 Yrs
9.94
8.37
1.57
SI 2
11.18
9.46
1.72
Returns are presented gross of management fees
1 Prior to February 1, 2011, a custom benchmark was employed
2 Since inception (October 1, 2009)
Strategy Profile – As at March 31, 2017
HIGH INCOME EQUITY
PERFORMANCE BENCHMARK: S&P/TSX Composite High Dividend Index
RISK/RETURN ANALYSIS
TOP-10 HOLDINGS (%)
Portfolio
11.18
0.94
8.66
0.67
1.20
103.86
90.21
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.77%)
Up-market capture ratio (%)
Down-market capture ratio (%)
S&P/TSX Composite
High Dividend
9.46
1.00
8.81
n/a
0.99
n/a
n/a
Composite, Since inception (October 1, 2009)
PORTFOLIO CHARACTERISTICS
S&P/TSX
Liquidity
Earnings Estimate Dispersion
Payout Ratio
Valuation
Price/Earnings (ttm)
Price/Earnings
(current year median estimate)
Price/Cash Flow
Price/Book
Dividend Yield (%)
Profitability and Growth
Return on equity (%)
Quarterly earnings momentum (%)
Earnings surprise
Estimate revisions (3 months) (%)
Security
Royal Bank of Canada
TransCanada
Enbridge
Bank of Nova Scotia
Pembina Pipeline
BCE
Shaw Communications
Bank of Montreal
Brookfield Property
Brookfield Renewable
Sector
Financials
Energy
Energy
Financials
Energy
Telecommunication Services
Consumer Discretionary
Financials
Real Estate
Utilities
Total
S&P/TSX
Composite
Portfolio High Dividend
Average Capitalization (M$)
Risk
Debt/Equity
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
46,251
33,318
46,938
0.79
11.51
76.59
0.72
11.54
78.49
0.62
12.13
48.98
18.85
18.20
20.46
17.20
8.85
1.81
4.44
16.63
9.09
1.83
4.71
16.99
8.75
1.9
2.87
11.95
0.89
1.03
-0.45
12.38
1.67
0.72
-0.31
12.03
4.2
1.53
0.2
Weight
8.3
8.3
8.2
7.5
5.8
5.1
4.6
4.0
3.8
3.8
59.3
PORTFOLIO MANAGEMENT TEAM
Michael J. Brown, CPA, CA, CFA, is responsible for the management of the
High Income Equity strategy and benefits from 14 years of investment
experience.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
49
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY –
SMALL CAPITALIZATION “CORE”
PERFORMANCE BENCHMARK: S&P/TSX Small Cap
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Fundamentally-driven, bottom-up approach which focuses on small and mid
cap securities and blends both value and growth characteristics by investing
in strong companies with growing earnings available at reasonable prices.
Quantitative
Screening
Small cap GARP
Process
Fundamental – Bottom up
Turnover
Low
Investment horizon
3 years
Holdings
55 to 75
Sector deviation
Potentially large, driven by
security selection
Strategy AUM
$1.1 B
Eliminate concept and biotech stocks
Top 120 stocks in the small cap universe are ranked
Focus on two types of opportunities
HIGHLIGHTS
Style
Mkt cap $150 M to ≈$2.2 B (over 300 companies)
Fundamental
Research &
Management
Meetings
Leading
Companies
Emerging
Growth
Companies
Target leading companies in every sector
Superior management with strong track record
Generating high ROE and strong FCF
Experiencing or soon to enter high growth
Significant management share ownership
Potential to generate high ROE and strong FCF
Over 300 management meetings annually
Valuation
Attractively valued companies over our 3-year horizon
Disciplined ranking system employed for each security
Portfolio
Construction
& Risk
Management
Each portfolio manager ranks each security on a scale from 1 (best) to
4 (worst) every month
Manager rankings combined to determine team’s aggregate ranking
Top-ranked securities form majority of the portfolio
Portfolio is broadly diversified across different sectors
WHY INVEST IN THIS STRATEGY
Experienced management team
Unique fundamentally-driven ranking system and disciplined approach
Best-of-breed companies with entrepreneurial management teams and significant ownership interest in their companies
Long term capital appreciation with low volatility
Proven ability to outperform across market environments as measured by both up and down market capture
Consistent, rigorous and repeatable investment process
PERFORMANCE (%)
Annual as at December 31
Can. Equity Small Cap “Core” Composite
S&P/TSX Small Cap.
Added value
Annualized as at March 31, 2017
Can. Equity Small Cap “Core” Composite
S&P/TSX Small Cap.
Added value
Q1
2017
-2.49
1.47
-3.96
2016
14.32
38.48
-24.16
2015
1.71
-13.31
15.02
2014
11.42
-2.34
13.76
2013
34.42
7.60
26.82
2012
2.16
-2.23
4.39
2011
-6.92
-16.43
9.51
2010
34.94
35.10
-0.16
2009
61.37
62.37
-1.00
2008
-49.12
-45.49
-3.63
2007
16.31
0.90
15.41
2006
32.64
11.61
21.03
1 Yr
10.17
29.48
-19.31
2 Yrs
2.68
10.51
-7.83
3 Yrs
5.07
3.29
1.78
4 Yrs
12.71
6.20
6.51
5 Yrs
10.77
3.38
7.39
6 Yrs
7.52
0.05
7.47
7 Yrs
10.90
4.35
6.55
8 Yrs
16.91
11.46
5.45
9 Yrs
7.60
2.99
4.61
10 Yrs
6.77
1.81
4.96
Returns are presented gross of management fees
50
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY –
SMALL CAPITALIZATION “CORE”
PERFORMANCE BENCHMARK: S&P/TSX Small Cap
RISK/RETURN ANALYSIS
TOP-10 HOLDINGS (%)
Portfolio
6.77
0.85
18.09
0.62
0.30
94.48
75.39
Composite, 10 year period ending March 31, 2017
PORTFOLIO CHARACTERISTICS
Liquidity
Average capitalization (M$)
Risk
Debt/Equity
Valuation
Price/Earnings (current year median estimate)
Price/Earnings (next year median estimate)
Price/Book
Dividend Yield (%)
Profitability and Growth
Reinvestment rate (%)
Return on equity (%)
Historical 3-year EPS growth
Portfolio
S&P/TSX
Sm. Cap.
1,341
1,097
0.42
0.57
19.76
15.46
2.00
1.51
26.34
18.08
1.36
2.39
10.85
12.32
9.36
6.12
7.35
0.22
Security
Tricon Capital
Equitable Group
Badger Daylighting
Parex Resources
Uni Select
Enghouse Systems
Asanko Gold
Intertape Polymer
Boyd Group Income Fund
Cargojet
Total
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Sector
Real Estate
Financials
Industrials
Energy
Consumer Discretionary
Information Technology
Materials
Materials
Industrials
Industrials
Weight
4.2
3.9
3.7
3.6
3.1
3.1
3.1
2.9
2.7
2.5
32.7
DISTINCTIVE ATTRIBUTE
Strong Stock-Picking Ability through Disciplined Ranking System
Annualized Performance of Stocks Ranked 1 to 41
25
20
19.7
15
(%)
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (1.30%)
Up-market capture ratio (%)
Down-market capture ratio (%)
S&P/TSX
Sm. Cap.
1.81
1.00
19.50
n/a
0.03
n/a
n/a
8.6
10
4.6
5
-2.3
0
Source: CPMS
-5
-10
Rank 1
Rank 2
Rank 3
Rank 4
1From January 31, 2010 to March 31, 2017
PORTFOLIO MANAGEMENT TEAM
ABOUT FIERA CAPITAL CORPORATION
Michael Chan, MBA, CFA, is the Senior Portfolio Manager and benefits from
23 years of investment experience. He is supported by one analyst.
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
51
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY –
SMALL CAPITALIZATION
PERFORMANCE BENCHMARK: S&P/TSX small Cap Index 1
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Committed Board and Management
Fundamentally-driven, bottom-up approach which focuses on identifying
the leaders of tomorrow. Small Cap companies demonstrating balance sheet
strength and offering growth opportunities available at a reasonable price
are selected across all sectors to diversify our sources of added value while
paying special attention to the preservation of capital. This approach aims
to generate consistent added value at a risk that is below that of the market.
Fundamental
& Qualitative
Criteria
Process
Fundamental Bottom-up
Performance benchmark
S&P/TSX small cap
Turnover
Low
Investment horizon
3 to 5 years
Holdings
50 to 70
Sector deviation
Driven by security selection
Strategy AUM
$1.7 B
Clear growth strategy
Revenue growth must be greater than the industry average
HIGHLIGHTS
Small cap GARP
Competitive advantage
Over 800 management meetings annually
Quantitative
Criteria
Style
Size of industry and market share
Superior current and projected profitability
Low level of debt
Possess catalysts: operational, financial, tax or market valuation
Return objective of 100% over 3 to 5 years
Portfolio
Construction
Sector diversification
Initial positions gradually increased as business plan is carried out
Liquidity – avoid value trap
WHY INVEST IN THIS STRATEGY
Experienced investment team with broad expertise in the management of Small Cap and Micro Cap strategies
True Small Cap strategy (no focus on mid or large cap securities)
Deep understanding of companies and superior access to their management
Rigorous investment process with a hands on approach ensuring strong practices
High conviction portfolio capable of significant alpha generation
Strong risk-adjusted returns over the long term
PERFORMANCE (%)
Annual as at December 31
Canadian Equity Small Cap Composite
S&P/TSX Small Cap Index1
Added value
Annualized as at March 31, 2017
Canadian Equity Small Cap Composite
S&P/TSX Small Cap Index1
Added value
Q1
2017
-3.92
1.47
-5.39
2016
21.30
38.48
-17.18
2015
-0.52
-13.31
12.79
2014
15.87
-2.34
18.21
2013
28.29
7.60
20.69
2012
7.92
-2.23
10.15
2011
-14.91
-16.43
1.52
2010
23.67
35.10
-11.43
2009
73.01
62.38
10.63
2008
-36.05
-45.49
9.44
2007
9.46
1.01
8.45
2006
17.32
16.64
0.68
1 Yr
16.10
29.48
-13.38
2 Yrs
4.47
10.51
-6.04
3 Yrs
8.32
3.29
5.03
4 Yrs
13.25
6.20
7.05
5 Yrs
11.44
3.38
8.06
6 Yrs
7.11
0.06
7.05
7 Yrs
9.20
4.35
4.85
8 Yrs
16.05
11.46
4.59
9 Yrs
9.60
2.99
6.61
10 Yrs
7.98
1.77
6.21
SI 2
12.30
7.34
4.96
Returns are presented gross of management fees
1 BMO Nesbitt Burns Small-Cap Index until August 2007 and S&P/TSX Small-Cap Index since then.
2 Since inception (January 1st, 1989)
52
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY –
SMALL CAPITALIZATION
PERFORMANCE BENCHMARK: S&P/TSX small Cap Index 1
RISK/RETURN ANALYSIS
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (4.10%)
Up-market capture ratio (%)
Down-market capture ratio (%)
TOP-10 HOLDINGS (%)
Portfolio
12.30
0.83
15.51
0.67
0.53
94.38
69.16
S&P/TSX
Small Cap.1
7.34
1.00
16.83
n/a
0.19
n/a
n/a
1 BMO Nesbitt Burns Small-Cap Index until August 2007 and S&P/TSX Small-Cap Index since
then.
Composite, since inception (January 1st, 1989)
PORTFOLIO CHARACTERISTICS
Liquidity
Average capitalization (M$)
Risk
Debt/Equity
Valuation
Price/Earnings (current year median estimate)
Price/Earnings (next year median estimate)
Price/Book
Dividend Yield (%)
Profitability and Growth
Reinvestment Rate (%)
Return on Equity (%)
Historical 3 year EPS growth (%)
Portfolio
S&P/TSX
Small Cap.
1,366
1,097
0.72
0.57
21.22
15.87
1.59
1.66
26.34
18.08
1.36
2.39
4.87
10.37
7.93
1.91
6.12
0.22
Source: CPMS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
TFI International
Agt Food and Ingredients
Intertape Polymer
Altus Group
GoEasy
Boardwalk
AG Growth Intl
Firstservice
DHX Media
Enghouse Systems
Sector
Industrials
Consumer Staples
Materials
Real Estate
Consumer Discretionary
Real Estate
Industrials
Financials
Consumer Discretionary
Information Technology
Total
Weight
4.8
4.7
4.6
4.5
4.3
4.0
3.9
3.8
3.7
3.7
41.9
PORTFOLIO MANAGEMENT TEAM
Christian Cyr, CFA, is the Senior Portfolio Manager of the strategy and
benefits from 21 years of investment experience. He has been with the firm
for 17 years. He is assisted by Marc Lecavalier, M.‌Sc., CFA, Portfolio Manager,
who possess 16 years of experience. They are also supported by a senior
analyst.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
53
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY OPPORTUNITIES*
* Formerly Canadian Equity – Selexia Investment Management Inc.
PERFORMANCE BENCHMARK: S&P/TSX Index
STRATEGY DESCRIPTION*
INVESTMENT PROCESS
Selexia Investment Management is a sub-advisor for Fiera Capital. The
investment strategy aims to identify out-of-favor stocks and sectors in order
to limit downside risk and preserve capital, while ensuring potential growth.
This contrarian and opportunistic approach offers true active management
through potentially significant active security and sector positions.
Assessment of
Market
Environment
Macroeconomic environment and cyclical positioning
Market phases and investment horizons
Historical fundamental factors
Selection Criteria: valuation, indebtedness, price, volume and
cost trends
Security
Selection
* Also available with an ethical filter and ESG considerations.
Target stocks with limited downside risk potential, low financial
leverage and attractive valuations
Research and Analysis: Multi-faceted benchmarking, meetings with
management and site visits, analysis of the competitive landscape
HIGHLIGHTS
Style
Large cap opportunistic value
Process
Bottom-up combined with potentially
significant sector deviations
Turnover
Moderate, below average
Investment horizon
12-18 months
Holdings
45 to 60
Sector deviation
Potentially large
Strategy AUM
$1.1 B
Sector
Deviations
Portfolio
Construction
Reasonable valuations: both relative and historical
Active sector and security weights
Capital preservation
Sector and security diversification
WHY INVEST IN THIS STRATEGY
Experienced team of senior portfolio managers working together for over 15 years
Established process that has been consistently applied over time
Unique, opportunistic and contrarian approach with diversified sources of alpha
High conviction portfolio with potentially significant sector deviations capable of substantial alpha generation
Strong capital preservation in down markets and up market performance capture
PERFORMANCE (%)
Annual as at December 31
Canadian Equity Opportunities Composite
Q1
2017
0.96
2016
27.36
2015
-9.68
2014
6.97
2013
27.13
2012
13.35
2011
-11.52
2010
14.77
2009
35.95
2008
-27.62
2007
6.25
2006
17.69
S&P/TSX Index
Added value
2.41
-1.45
21.08
6.28
-8.32
-1.36
10.55
-3.58
12.99
14.14
7.19
6.16
-8.71
-2.81
17.61
-2.84
35.05
0.90
-33.00
5.38
9.83
-3.58
17.26
0.43
1 Yr
26.09
18.62
7.47
2 Yrs
6.98
5.27
1.71
3 Yrs
5.18
5.82
-0.64
4 Yrs
10.45
8.27
2.18
5 Yrs
11.26
7.84
3.42
6 Yrs
7.14
4.68
2.46
7 Yrs
8.37
6.80
1.57
8 Yrs
12.42
10.68
1.74
9 Yrs
7.44
4.78
2.66
10 Yrs
6.30
4.70
1.60
SI 1
10.61
9.38
1.23
Annualized as at March 31, 2017
Canadian Equity Opportunities Composite
S&P/TSX Index
Added value
Returns are presented gross of management fees
1 Since inception (November 1st, 2002)
54
Strategy Profile – As at March 31, 2017
CANADIAN EQUITY OPPORTUNITIES*
* Formerly Canadian Equity – Selexia Investment Management Inc.
PERFORMANCE BENCHMARK: S&P/TSX Index
RISK/RETURN ANALYSIS
TOP-10 HOLDINGS (%)
Portfolio
10.61
0.96
13.10
0.24
0.67
103.15
96.49
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (1.82%)
Up-market capture ratio (%)
Down-market capture ratio (%)
S&P/TSX
9.38
1.00
12.47
n/a
0.61
n/a
n/a
Composite, since inception (November 1st, 2002)
PORTFOLIO CHARACTERISTICS
Liquidity
Average capitalization (M$)
Risk
Debt/Equity
Payout Ratio
Valuation
Price/Earnings (ttm)
Price/Earnings (current year median estimate)
Price/Cash Flow
Price/Book
Dividend Yield (%)
Profitability and Growth
Next year estimated EPS Growth (%)
Return on Equity
Quarterly Earnings Momentum (%)
Estimates revisions (3 months) (%)
Portfolio
S&P/TSX
32,716
46,938
0.65
35.37
0.62
48.98
28.53
18.25
9.09
1.78
1.91
20.46
16.99
8.75
1.90
2.87
28.71
9.30
11.69
2.22
13.59
12.03
4.20
0.20
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
Canadian Natural Resources
Bank of Nova Scotia
Royal Bank of Canada
Manulife Financial
Canadian Energy Service
TD Bank
Magna International
Canadian National Railway
Dollarama
Canadian Western Bank
Sector
Energy
Financials
Financials
Financials
Energy
Financials
Consumer Discretionary
Industrials
Consumer Discretionary
Financials
Total
Weight
5.6
5.4
4.7
4.7
4.3
4.3
3.9
3.8
3.8
3.7
44.1
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
Source: CPMS
PORTFOLIO MANAGEMENT TEAM
Jacques Chartrand, Chairman and Chief Investment Officer, is the strategy’s
lead manager. He benefits from 37 years of experience in the industry and
has led the team since its inception, alongside Claude Boulos, CA, CBV, MBA,
President, Chief Operating Officer and Portfolio Manager, who possesses
30 years of investment experience and joined the firm 20 years ago. They are
also supported by Marlene Osganian, MBA, CFA, Assistant Portfolio Manager,
and by one analyst.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
55
Strategy Profile – As at March 31, 2017
US EQUITY
PERFORMANCE BENCHMARK: S&P 500 (CAN$)
STRATEGY DESCRIPTION*
INVESTMENT PROCESS
Sustainable returns and low volatility are achieved by investing in a
concentrated (yet diversified) portfolio of high quality companies, which as
a result of unique competitive advantages, are able to generate stable and
strong return on invested capital (ROIC) with little dependence on financial
leverage, grow shareholder wealth through superior and consistent long term
rates of return and preserve capital.
Quantitative
Screening
Fundamental
Research &
Management
Meetings
* Also available under the following approaches:
> Ethical filter and ESG considerations
> Currency-hedged
High quality & growth potential, attractive valuation
Profitability, solid balance sheets, high ROIC
Minimum Market Capitalization $1B
Understand industry and positioning
Best in class & dominance
Sustainability of competitive advantage
Corporate governance & red flags
Determine intrinsic value (absolute valuation)
Valuation
Historical valuation
Relative valuation (peers, sector, universe)
HIGHLIGHTS
Style
Large cap GARP
Process
Fundamental bottom-up
Turnover
Low
Investment horizon
Over 60 months
Holdings
25 to 45
Sector deviation
Potentially large, driven by
security selection
Strategy AUM
$5.3 B
Portfolio
Construction
& Risk
Management
Best of breed quality companies with sustainable competitive
advantage & attractive valuation
Concentrated portfolio: own only the best ideas
Progressive position building
Diversification of drivers & investment theses
High conviction & knowledge in all holdings
WHY INVEST IN THIS STRATEGY
Long term investing ensures emphasis on high quality, best of breed companies and consistency of performance
Strong disciplined approach from which this experienced team never deviates
Rigorous research ensures very deep knowledge of portfolio companies and consistent success of our approach
High conviction focused portfolio with diversified sources of alpha
Broad universe of potential investment opportunities
Strong risk-adjusted returns, top ranking relative to its peers
PERFORMANCE (%)
Annual as at December 31
US Equity Composite
S&P 500 (CAN$)
Added value
Annualized as at March 31, 2017
US Equity Composite
S&P 500 (CAN$)
Added value
56
1 Yr
18.76
20.81
-2.05
Q1 2017
8.05
5.48
2.57
2016
5.85
8.09
-2.24
2015
22.52
21.59
0.93
2014
26.97
23.93
3.04
2013
47.96
41.27
6.69
2012
13.37
13.43
-0.06
2011
8.87
4.64
4.23
2010
11.64
9.06
2.58
2 Yrs
11.70
12.06
-0.36
3 Yrs
18.85
17.56
1.29
4 Yrs
23.73
21.10
2.63
5 Yrs
21.81
20.03
1.78
6 Yrs
20.99
18.57
2.42
7 Yrs
19.65
17.44
2.21
8 Yrs
20.42
17.82
2.60
SI 1
20.42
17.82
2.60
Returns are presented gross of management fees
1 Since inception (April 1, 2009)
Strategy Profile – As at March 31, 2017
US EQUITY
PERFORMANCE BENCHMARK: S&P 500 (CAN$)
RISK/RETURN ANALYSIS
TOP-10 HOLDINGS (%)
Portfolio
20.42
1.01
10.40
0.68
1.89
106.77
89.94
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.75%)
Up-market capture ratio (%)
Down-market capture ratio (%)
S&P 500
17.82
1.00
9.51
n/a
1.79
n/a
n/a
Composite, Since inception (April 1, 2009)
PORTFOLIO CHARACTERISTICS
Liquidity1
Average capitalization (M$)
Risk1
Debt/Equity
Net debt/EBITDA
Valuation
Price/Earnings (next twelve months)3
Enterprise Value/EBIT (trailing twelve months)3
Dividend Yield (%)1
Profitability and Growth2
Next year estimated EPS growth (%)
Estimated Revenue Growth (%)
Return on Equity (%)
Return on Invested Capital (%, ROIC or ROI)
Operating Margin
Portfolio
S&P 500
110,286
219,356
1.29
1.04
1.45
1.28
19.77
15.69
1.49
17.69
15.06
1.92
9.69
3.51
23.37
10.67
4.76
13.91
28.69
20.14
13.23
15.11
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
Moody's
Johnson & Johnson
Becton, Dickinson
Mastercard
Pepsico
U.S. Bancorp
Sherwin Williams
3M Company
UnitedHealth Group
Autozone
Sector
Financials
Health Care
Health Care
Information technology
Consumer Staples
Financials
Materials
Industrials
Health Care
Consumer Discretionary
Total
Weight
6.1
5.7
4.8
4.6
4.2
4.1
4.1
4.0
4.0
3.9
45.6
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
Source : Factset
1 Weighted Average
2 Median
3 Harmonic Weighted Average
PORTFOLIO MANAGEMENT TEAM
Nadim Rizk, MBA, CFA, is the Senior Portfolio Manager of the strategy and
benefits from 20 years of investment experience with US and International
equities. He is assisted by Andrew Chan, M.Sc., Portfolio Manager, and by
six dedicated analysts.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
57
Strategy Profile – As at March 31, 2017
US EQUITY SMALL CAP
PERFORMANCE BENCHMARK: Russell 2000 Growth
STRATEGY DESCRIPTION
INVESTMENT PROCESS
The strategy focuses on identifying best in class, small cap companies with
an emphasis on stable and emerging growth securities, capable of generating
alpha. The proprietary approach is driven by both bottom-up stock selection
and top-down secular growth trend identification, regardless of index or
sector weightings.
Bottom-up fundamental research leading to independent conviction of
the thematic views and stock selection
Idea Generation
and Growth
Screens
Identification of global secular growth trends and market variables
driving changes
Selected universe with clear growth criteria and improvements of
fundamentals characteristics
Market capitalization range from $150M-$3.5B
HIGHLIGHTS
Indentification of stable growth and emerging growth companies with
financial catalysts
Style
Small Cap, Stable growth
Process
Fundamental bottom-up with top down
secular views
Turnover
Moderate
Investment horizon
Long term
Holdings
60 to 80
Sector deviation
Moderate or potentially significant
Fundamental
Research and
Valuation
Key growth metric analysis within each sector
Identification of key business drivers and company specific risk
Operational and financial performance assessment as well as
peers comparison
Selection of 60-80 securities seeking to maximize alpha while
controlling downside risk
Portfolio
Intersection of top-down thematic views and bottom-up
Construction and
research results
Risk Management
Diversification across sectors and industries with an emphasis on
capital preservation
WHY INVEST IN THIS STRATEGY
Established and stable investment team with a broad expertise in the management of small cap strategies
Unique combination of bottom-up and top-down research using a proprietary process which seeks to successfully generate alpha
Rigorous and disciplined investment process ensuring strong capital preservation in down markets and up market performance capture
Superior risk-adjusted returns over the long term
PERFORMANCE (%)
58
Annual as at December 31
Apex US Equity Small Cap Composite
Russel 2000 Growth
Added value
Q1 2017
-0.59
4.77
-5.36
2016
-3.36
7.47
-10.83
2015
25.34
18.27
7.07
2014
14.53
15.14
-0.61
2013
51.20
52.90
-1.70
2012
17.92
12.05
5.87
2011
8.47
-0.52
8.99
2010
26.51
22.34
4.17
2009
26.56
14.20
12.36
Annualized as at March 31, 2017
Apex US Equity Small Cap Composite
Russel 2000 Growth
Added value
1 Yr
10.15
26.86
-16.71
2 Yrs
0.46
6.86
-6.40
3 Yrs
9.43
13.67
-4.24
4 Yrs
15.36
19.36
-4.00
5 Yrs
16.10
18.76
-2.66
6 Yrs
16.22
16.06
0.16
7 Yrs
18.45
17.38
1.07
8 Yrs
19.95
18.80
1.15
SI 1
19.24
16.99
2.25
Please note that a Canadian domiciled pooled fund of the Apex Capital Management’s Small Cap Equity strategy, Fiera Capital’s subsidiary, is available.
Returns are presented gross of management fees
1 Inception date: January 1, 2009
Strategy Profile – As at March 31, 2017
US EQUITY SMALL CAP
PERFORMANCE BENCHMARK: Russell 2000 Growth
RISK/RETURN ANALYSIS
TOP-10 HOLDINGS (%)
Portfolio
19.24
0.85
14.19
0.41
1.30
94.86
78.74
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.78%)
Up-market capture ratio (%)
Down-market capture ratio (%)
Russel 2000
Growth
16.99
1.00
15.73
n/a
1.03
n/a
n/a
Composite, Since inception (January 1, 2009)
PORTFOLIO CHARACTERISTICS
Price/Earnings (next twelve months)
Enterprise Value/EBIT (trailing twelve months)
Dividend Yield (%)
Profitability and Growth
Next year estimated EPS growth (%)
Estimated Revenue Growth (%)
Return on Equity (%)
Return on Invested Capital (%, ROIC or ROI)
Operating Margin
Security
Euronet Worlwide
Burlington Stores
Chemed
Cambrex
EMCOR
Hawaiian Holdings
ICON
Marriott Vacations Worldwide
Western Alliance Bancorp
Amn Healthcare Services
Sector
Information Technology
Consumer Discretionary
Health Care
Health Care
Industrials
Industrials
Health Care
Consumer Discretionary
Financials
Health Care
Total
Russel 2000
Portfolio
Growth
Liquidity1
Average capitalization (M$)
Risk1
Debt/Equity
Net debt/EBITDA
Valuation
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
3,842
3,169
0.89
1.22
1.72
1.62
16.91
11.93
0.66
19.96
15.98
0.80
11.79
8.50
15.07
18.94
10.54
16.14
7.28
6.61
10.48
6.32
Weight
3.1
2.6
2.3
2.3
2.2
2.1
1.9
1.9
1.8
1.8
21.9
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
PORTFOLIO MANAGEMENT TEAM 2
Nitin Kumbhani, founder of Apex and Vice Chairman, is the leader of the
strategy and benefits from 30 years of investment experience. He is assisted
by 4 portfolio managers, Jan Terbrueggen, CFA, Michael Kalbfleish, CFA, CPA,
Sunil Reddy, CFA, and Kamal Kumbhani. They benefit from 31, 31, 26 and
26 years of investment experience, respectively.
2 Apex Capital Management is a sub-advisor for Fiera Capital
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
59
Strategy Profile – As at March 31, 2017
INTERNATIONAL EQUITY
PERFORMANCE BENCHMARK: MSCI EAFE (CAN $)
STRATEGY DESCRIPTION*
INVESTMENT PROCESS
Sustainable returns and low volatility are achieved by investing in a
concentrated (yet diversified) portfolio of high quality companies, which as
a result of unique competitive advantages, are able to generate stable and
strong return on invested capital (ROIC) with little dependence on financial
leverage, grow shareholder wealth through superior and consistent long term
rates of return and preserve capital.
Quantitative
Screening
Fundamental
Research &
Management
Meetings
* Also available with an ethical filter and ESG considerations.
High quality & growth potential, attractive valuation
Profitability, solid balance sheets, high ROIC
Minimum Market Capitalization $1B
Understand industry and positioning
Best in class & dominance
Sustainability of competitive advantage
Corporate governance & red flags
Determine intrinsic value (absolute valuation)
Valuation
HIGHLIGHTS
Historical valuation
Relative valuation (peers, sector, universe)
Style
Large cap GARP
Process
Fundamental bottom-up
Turnover
Low
Investment horizon
Over 60 months
Holdings
25 to 45
Sector deviation
Potentially large, driven by
security selection
Strategy AUM
$4.7 B
Portfolio
Construction
& Risk
Management
Best of breed quality companies with sustainable competitive
advantage & attractive valuation
Concentrated portfolio: own only the best ideas
Progressive position building
Diversification of drivers & investment theses
High conviction & knowledge in all holdings
WHY INVEST IN THIS STRATEGY
Long term investing ensures emphasis on high quality, best of breed companies and consistency of performance
Strong disciplined approach from which this experienced team never deviates
Rigorous research ensures very deep knowledge of portfolio companies and consistent success of our approach
High conviction focused portfolio with diversified sources of alpha
Broad universe of potential investment opportunities
Strong risk-adjusted returns, top ranking relative to its peers
PERFORMANCE (%)
Annual as at December 31
International Equity Composite
MSCI EAFE (CAN $)
Added value
Q1 2017
10.12
6.65
3.47
2016
-2.56
-2.49
-0.07
2015
22.06
18.95
3.11
2014
6.95
3.67
3.28
2013
26.42
31.02
-4.60
2012
24.12
14.72
9.40
2011
-2.12
-9.96
7.84
2010
12.49
2.13
10.36
Annualized as at March 31, 2017
International Equity Composite
MSCI EAFE (CAN $)
Added value
1 Yr
15.58
15.15
0.43
2 Yrs
6.26
3.86
2.40
3 Yrs
9.99
7.04
2.95
4 Yrs
13.08
11.87
1.21
5 Yrs
14.60
12.11
2.49
6 Yrs
13.57
9.41
4.16
7 Yrs
13.23
8.89
4.34
SI 1
12.96
8.21
4.75
Returns are presented gross of management fees
1 Since inception (January 1, 2010)
60
Strategy Profile – As at March 31, 2017
INTERNATIONAL EQUITY
PERFORMANCE BENCHMARK: MSCI EAFE (CAN $)
RISK/RETURN ANALYSIS
COUNTRY ALLOCATION (%)
Portfolio
12.96
0.85
10.89
1.03
1.12
101.16
68.05
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.80%)
Up-market capture ratio (%)
Down-market capture ratio (%)
MSCI EAFE
8.21
1.00
11.78
n/a
0.63
n/a
n/a
Country
Composite, Since inception (January 1, 2010)
Price/Earnings (next twelve months)3
Enterprise Value/EBIT (trailing twelve months)3
Dividend Yield (%)1
Profitability and Growth2
Next year estimated EPS growth (%)
Estimated Revenue Growth (%)
Return on Equity (%)
Return on Invested Capital (%, ROIC or ROI)
Operating Margin (%)
MSCI EAFE
48.0
46.2
United Kingdom
24.8
17.9
Japan
13.7
23.4
Emerging Markets
8.1
0.0
Pacific ex-Japan
4.8
12.6
Cash
0.6
0.0
Total
100.0
100.0
TOP-10 HOLDINGS (%)
PORTFOLIO CHARACTERISTICS
Liquidity1
Average capitalization (M$)
Risk1
Debt/Equity
Net debt/EBITDA
Valuation
Portfolio
Europe ex-UK
Portfolio
MSCI EAFE
93,871
75,098
1.00
0.70
1.38
1.37
20.95
17.94
2.13
14.82
13.67
3.05
8.77
5.48
18.31
24.21
19.98
8.58
3.49
10.14
11.04
10.45
Source : Factset
1 Weighted Average
2 Median
3 Harmonic Weighted Average
PORTFOLIO MANAGEMENT TEAM
Nadim Rizk, MBA, CFA, is the Senior Portfolio Manager of the strategy and
benefits from 20 years of investment experience with US and International
equities. He is assisted by Andrew Chan, M.Sc., Portfolio Manager, and by
six dedicated analysts.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
Keyence
Nestle
Unilever
InterContinental Hotels
Intertek Group
Roche Holdings
Diageo
L'Oreal
Schindler Holding
Novartis
Total
Sector
Information Technology
Consumer Staples
Consumer Staples
Consumer Discretionary
Industrials
Health Care
Consumer Staples
Consumer Staples
Industrials
Health Care
Weight
6.2
5.0
4.7
4.2
4.1
4.0
4.0
4.0
3.7
3.6
43.4
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
61
Strategy Profile – As at March 31, 2017
GLOBAL EQUITY
PERFORMANCE BENCHMARK: MSCI World (CAN$)
STRATEGY DESCRIPTION*
INVESTMENT PROCESS
Sustainable returns and low volatility are achieved by investing in a
concentrated (yet diversified) portfolio of high quality companies, which as
a result of unique competitive advantages, are able to generate stable and
strong return on invested capital (ROIC) with little dependence on financial
leverage, grow shareholder wealth through superior and consistent long term
rates of return and preserve capital.
Quantitative
Screening
Fundamental
Research &
Management
Meetings
* Also available under the following approaches:
> All Country World Equity
> Currency-hedged
High quality & growth potential, attractive valuation
Profitability, solid balance sheets, high ROIC
Minimum Market Capitalization $1B
Understand industry and positioning
Best in class & dominance
Sustainability of competitive advantage
Corporate governance & red flags
Determine intrinsic value (absolute valuation)
Valuation
Historical valuation
Relative valuation (peers, sector, universe)
HIGHLIGHTS
Style
Large cap GARP
Process
Fundamental bottom-up
Turnover
Low
Investment horizon
Over 60 months
Holdings
35 to 55
Sector deviation
Potentially large, driven by
security selection
Strategy AUM
$10.7 B
Portfolio
Construction
& Risk
Management
Best of breed quality companies with sustainable competitive
advantage & attractive valuation
Concentrated portfolio: own only the best ideas
Progressive position building
Diversification of drivers & investment theses
High conviction & knowledge in all holdings
WHY INVEST IN THIS STRATEGY
Long term investing ensures emphasis on high quality, best of breed companies and consistency of performance
Strong disciplined approach from which this experienced team never deviates
Rigorous research ensures very deep knowledge of portfolio companies and consistent success of our approach
High conviction focused portfolio with diversified sources of alpha
Broad universe of potential investment opportunities
Strong risk-adjusted returns, top ranking relative to its peers
PERFORMANCE (%)
Annual as at December 31
Global Equity Composite
MSCI World (CAN$)
Added value
Annualized as at March 31, 2017
Global Equity Composite
MSCI World (CAN$)
Added value
62
Q1 2017
10.14
5.79
4.35
2016
2.26
3.79
-1.53
2015
22.62
18.89
3.73
2014
16.51
14.39
2.12
2013
37.75
35.18
2.57
2012
17.80
13.26
4.54
2011
5.63
-3.20
8.83
2010
13.41
5.93
7.48
1 Yr
19.20
18.33
0.87
2 Yrs
9.94
8.02
1.92
3 Yrs
15.28
12.39
2.89
4 Yrs
18.90
16.41
2.49
5 Yrs
18.77
15.86
2.91
6 Yrs
18.08
13.67
4.41
7 Yrs
17.31
12.96
4.35
SI 1
17.22
12.28
4.94
Returns are presented gross of management fees
1 Since inception (October 1, 2009)
Strategy Profile – As at March 31, 2017
GLOBAL EQUITY
PERFORMANCE BENCHMARK: MSCI World (CAN$)
RISK/RETURN ANALYSIS
COUNTRY ALLOCATION (%)
Portfolio
17.22
0.93
9.58
1.31
1.72
105.66
61.32
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.77%)
Up-market capture ratio (%)
Down-market capture ratio (%)
MSCI World
12.28
1.00
9.52
n/a
1.21
n/a
n/a
Country
Composite, Since inception (October 1, 2009)
PORTFOLIO CHARACTERISTICS
Liquidity1
Average capitalization (M$)
Risk1
Debt/Equity
Net debt/EBITDA
Valuation
Price/Earnings (next twelve months)3
Enterprise Value/EBIT (trailing twelve months)3
Dividend Yield (%)1
Profitability and Growth2
Next year estimated EPS growth (%)
Estimated Revenue Growth (%)
Return on Equity (%)
Return on Invested Capital (%, ROIC or ROI)
Operating Margin (%)
Portfolio
MSCI World
110,132
153,681
1.29
0.89
1.43
1.42
20.42
16.36
1.80
16.51
14.69
2.35
8.77
4.12
24.09
27.82
21.63
9.64
4.33
10.96
11.10
12.26
Source: Factset
1 Weighted Average
2 Median
3 Harmonic Weighted Average
PORTFOLIO MANAGEMENT TEAM
Nadim Rizk, MBA, CFA, is the Senior Portfolio Manager of the strategy and
benefits from 20 years of investment experience with US and International
equities. He is assisted by Andrew Chan, M.Sc., Portfolio Manager, and by
six dedicated analysts.
Portfolio
MSCI World
United States
55.4
59.8
Europe ex-UK
20.7
16.9
United Kingdom
9.8
6.5
Japan
6.3
8.6
Emerging Markets
6.1
0.0
Pacific ex-Japan
1.3
4.6
Canada
0.0
3.6
Cash
0.4
0.0
Total
100.0
100.0
TOP-10 HOLDINGS (%)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
Moody's
Johnson & Johnson
Keyence
Becton Dickinson
Unilever
MasterCard
Nestle
3M Company
U.S. Bancorp
TJX Companies
Total
Sector
Financials
Health Care
Information Technology
Health Care
Consumer Staples
Information Technology
Consumer Staples
Industrials
Financials
Consumer Discretionary
Weight
4.7
4.5
4.4
4.1
3.4
3.3
3.3
3.0
2.9
2.9
36.6
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
63
Strategy Profile – As at March 31, 2017
GLOBAL EQUITY FOCUS
PERFORMANCE BENCHMARK: MSCI World (CAN$)
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Sustainable returns and low volatility are achieved by investing in a highly
concentrated (yet diversified) portfolio of companies in which we have the
utmost conviction, which as a result of unique competitive advantages, are
able to generate stable and strong return on invested capital (ROIC) with
little dependence on financial leverage, grow shareholder wealth through
superior and consistent long term rates of return and preserve capital.
Quantitative
Screening
Fundamental
Research &
Management
Meetings
HIGHLIGHTS
High quality & growth potential, attractive valuation
Profitability, solid balance sheets, high ROIC
Minimum Market Capitalization $1B
Understand industry and positioning
Best in class & dominance
Sustainability of competitive advantage
Corporate governance & red flags
Determine intrinsic value (absolute valuation)
Style
Large cap GARP
Process
Fundamental bottom-up
Turnover
Low
Investment horizon
Over 60 months
Holdings
15 to 25
Sector deviation
Potentially large, driven by
security selection
Strategy AUM
Focus: $80.1 M
Global: $10.7 B
Valuation
Historical valuation
Relative valuation (peers, sector, universe)
Portfolio
Construction
& Risk
Management
Best of breed quality companies with sustainable competitive
advantage & attractive valuation
Highly concentrated portfolio: own only the best ideas
Progressive position building
Diversification of drivers & investment theses
High conviction & knowledge in all holdings
WHY INVEST IN THIS STRATEGY
Long term investing ensures emphasis on high quality, best of breed companies and consistency of performance
Strong disciplined approach from which this experienced team never deviates
Rigorous research ensures very deep knowledge of portfolio companies and consistent success of our approach
Extremely high conviction focused portfolio with diversified sources of alpha
Broad universe of potential investment opportunities
PERFORMANCE (%)
Annual as at December 31
Global Equity Focus Composite
MSCI World (CAN$)
Added value
Annualized as at March 31, 2017
Global Equity Focus Composite
MSCI World (CAN$)
Added value
64
Q1 2017
10.66
2016
2.05
2015
22.26
5.79
4.87
3.79
-1.74
18.89
3.38
1 Yr
19.61
18.33
1.27
2 Yrs
10.51
8.02
2.49
SI 1
17.65
12.95
4.70
Returns are presented gross of management fees
1 Since inception (September 1, 2014)
Strategy Profile – As at March 31, 2017
GLOBAL EQUITY FOCUS
PERFORMANCE BENCHMARK: MSCI World (CAN$)
PORTFOLIO CHARACTERISTICS
Focus
Portfolio
Liquidity1
Average capitalization (M$)
Risk1
Debt/Equity
Net debt/EBITDA
Valuation
Price/Earnings
(next twelve months)3
Enterprise Value/EBIT
(trailing twelve months)3
Dividend Yield (%)1
Profitability and Growth2
Next year estimated EPS growth (%)
Estimated Revenue Growth (%)
Return on Equity (%)
Return on Invested Capital
(%, ROIC or ROI)
Operating Margin (%)
Number of Securities
127,176
1.19
0.98
COUNTRY ALLOCATION (%)
Global
Portfolio
110,132
1.29
0.89
MSCI
World
Country
153,681
1.43
1.42
20.67
20.42
16.51
16.46
1.91
16.36
1.80
14.69
2.35
8.82
4.25
22.21
8.77
4.12
24.09
9.64
4.33
10.96
32.55
23.34
21
27.82
21.63
39
11.10
12.26
1,650
Source: Factset
1 Weighted Average
2 Median
3 Harmonic Weighted Average
PORTFOLIO MANAGEMENT TEAM
Nadim Rizk, MBA, CFA, is the Senior Portfolio Manager of the strategy and
benefits from 20 years of investment experience with US and International
equities. He is assisted by Andrew Chan, M.Sc., Portfolio Manager, and by
six dedicated analysts.
Portfolio
MSCI World
United States
60.3
59.8
Europe ex-UK
21.2
16.9
United Kingdom
9.1
6.5
Japan
5.7
8.6
Emerging Markets
3.3
0.0
Canada
0.0
3.6
Pacific ex-Japan
0.0
4.6
Cash
0.5
0.0
Total
100.0
100.0
TOP-10 HOLDINGS (%)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
Moody's
Johnson & Johnson
Becton Dickinson
Keyence
Unilever
3M Company
Mastercard
Colgate-Palmolive
Nestle
Diageo
Total
Sector
Financials
Health Care
Health Care
Information Technology
Consumer Staples
Industrials
Information Technology
Consumer Staples
Consumer Staples
Consumer Staples
Weight
7.0
6.5
6.3
5.8
5.8
5.7
5.4
5.3
5.0
4.5
57.3
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
65
Strategy Profile – As at March 31, 2017
ALL COUNTRY WORLD EQUITY
PERFORMANCE BENCHMARK: MSCI ACWI (CAN$)
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Sustainable returns and low volatility are achieved by investing in a
concentrated (yet diversified) portfolio of high quality companies, which as
a result of unique competitive advantages, are able to generate stable and
strong return on invested capital (ROIC) with little dependence on financial
leverage, grow shareholder wealth through superior and consistent long term
rates of return and preserve capital.
Quantitative
Screening
Fundamental
Research &
Management
Meetings
HIGHLIGHTS
High quality & growth potential, attractive valuation
Profitability, solid balance sheets, high ROIC
Minimum Market Capitalization $1B
Understand industry and positioning
Best in class & dominance
Sustainability of competitive advantage
Corporate governance & red flags
Determine intrinsic value (absolute valuation)
Style
Large cap GARP
Process
Fundamental bottom-up
Turnover
Low
Investment horizon
Over 60 months
Holdings
35 to 55
Sector deviation
Potentially large, driven by
security selection
Strategy AUM
$1.8 B
Valuation
Historical valuation
Relative valuation (peers, sector, universe)
Portfolio
Construction
& Risk
Management
Best of breed quality companies with sustainable competitive
advantage & attractive valuation
Concentrated portfolio: own only the best ideas
Progressive position building
Diversification of drivers & investment theses
High conviction & knowledge in all holdings
WHY INVEST IN THIS STRATEGY
Long term investing ensures emphasis on high quality, best of breed companies and consistency of performance
Strong disciplined approach from which this experienced team never deviates
Rigorous research ensures very deep knowledge of portfolio companies and consistent success of our approach
High conviction focused portfolio with diversified sources of alpha
Broad universe of potential investment opportunities
Strong risk-adjusted returns, top ranking relative to its peers
PERFORMANCE (%)
Annual as at December 31
All Country World Equity Composite
MSCI ACWI (CAN$)
Added value
Annualized as at March 31, 2017
All Country World Equity Composite
MSCI ACWI (CAN$)
Added value
66
1 Yr
19.11
18.62
0.49
Q1 2017
10.28
6.32
3.96
2016
2.12
4.13
-2.01
2015
22.30
17.10
5.20
2014
16.02
13.54
2.48
2 Yrs
9.79
7.65
2.14
3 Yrs
14.98
11.92
3.06
4 Yrs
18.60
15.43
3.17
SI 1
18.60
15.43
3.17
Returns are presented gross of management fees
1 Since inception (April 1, 2013)
Strategy Profile – As at March 31, 2017
ALL COUNTRY WORLD EQUITY
PERFORMANCE BENCHMARK: MSCI ACWI (CAN$)
RISK/RETURN ANALYSIS
COUNTRY ALLOCATION (%)
Portfolio
18.60
1.03
9.98
0.95
1.79
105.71
76.74
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.73%)
Up-market capture ratio (%)
Down-market capture ratio (%)
MSCI ACWI
15.43
1.00
9.16
n/a
1.60
n/a
n/a
Country
Composite, Since inception (April 1, 2013)
PORTFOLIO CHARACTERISTICS
Liquidity1
Average capitalization (M$)
Risk1
Debt/Equity
Net debt/EBITDA
Valuation
Price/Earnings (next twelve months)3
Enterprise Value/EBIT (trailing twelve months)3
Dividend Yield (%)1
Profitability and Growth2
Next year estimated EPS growth (%)
Estimated Revenue Growth (%)
Return on Equity (%)
Return on Invested Capital (%, ROIC or ROI)
Operating Margin (%)
Portfolio
MSCI ACWI
108,507
146,230
1.26
0.88
1.38
1.34
20.29
16.33
1.79
15.86
14.39
2.35
8.77
4.12
24.09
27.82
21.63
10.54
5.27
11.51
11.09
12.31
Source: Factset
1 Weighted Average
2 Median
3 Harmonic Weighted Average
PORTFOLIO MANAGEMENT TEAM
Nadim Rizk, MBA, CFA, is the Senior Portfolio Manager of the strategy and
benefits from 20 years of investment experience with US and International
equities. He is assisted by Andrew Chan, M.Sc., Portfolio Manager, and by
six dedicated analysts.
Portfolio
MSCI ACWI
United States
53.5
53.2
Europe ex-UK
20.3
15.1
United Kingdom
10.2
5.8
Emerging Markets
7.5
9.3
Japan
6.4
7.6
Pacific ex-Japan
2.0
5.8
Canada
0.0
3.2
Cash
0.0
0.0
Total
100.0
100.0
TOP-10 HOLDINGS (%)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
Moody's
Keyence
Johnson & Johnson
Becton Dickinson
Mastercard
Unilever
HDFC Bank
Diageo
Schindler
TJX Companies
Total
Sector
Financials
Information Technology
Health Care
Health Care
Information Technology
Consumer Staples
Financials
Consumer Staples
Industrials
Consumer Discretionary
Weight
4.7
4.4
4.2
4.0
3.5
3.4
3.2
3.2
3.1
3.1
36.7
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
67
Strategy Profile – As at March 31, 2017
EMERGING MARKETS EQUITY
PERFORMANCE BENCHMARK: MSCI Emerging Markets ($CA)
STRATEGY DESCRIPTION
INVESTMENT PROCESS
Charlemagne Capital Limited is a subsidiary of Fiera Capital specialized
in emerging markets equity investments whose principal activity is the
provision of emerging markets asset management products and services.
Charlemagne Capital’s Global Emerging Markets strategy is based on a
bottom-up, fundamental research-driven approach to stock selection and
aims to build a concentrated, growth-orientated portfolio with an emphasis
on quality. It focuses on both quantitative and qualitative analysis with a
preference for less well understood opportunities. Risk-adjusted upside
potential is a main determinant of selection and position sizes are driven by
conviction with no regard to index weighting.
Idea
Generation
On-the-ground, qualitative research and disciplined, price‑focused
modelling
Diversity, experience and expertise of investment team are key
strengths
Generation of ideas based on experience, knowledge and contacts
Consistent management track record with alignment
Business models with strong market positioning and clear growth
opportunities
Fundamental
Research
Construction and maintenance of proprietary stock models
Thorough appraisal of all aspects of management
Relative and absolute valuation
Review of ESG issues
HIGHLIGHTS
Style
All-cap GARP
Process
Fundamental bottom-up
Turnover
Low
Investment horizon
Long term
Holdings
50 to 65
Sector deviation
Potentially large,
driven by conviction
Strategy AUM
$554 M
Portfolio
Construction
Best stock ideas are combined in a single portfolio on the basis of
upside potential, conviction, dividends, risk, and liquidity among other
factors and kept under constant review
Concentrated portfolio of approximately 50 to 65 holdings.
No benchmark relative constraint on country or sector exposures
Risk
Analysis
Statistical analysis focused on stock specific risk, tracking error range,
and liquidity
Fundamental analysis focused on corporate governance risk,
fundamental risk, and structural risk
WHY INVEST IN THIS STRATEGY
Undiluted commitment to emerging markets
Experienced investment team with a proven track record
Disciplined, research-driven investment process
Focused, high conviction, portfolio of quality growing companies
Strong, risk-adjusted returns over the long term
PERFORMANCE (%)
Annual as at December 31
Charlemagne Emerging Markets
Equity Composite
MSCI Emerging Markets ($CA)
Added value
Annualized as at March 31, 2017
Charlemagne Emerging Markets
Equity Composite
MSCI Emerging Markets ($CA)
Added value
Q1 2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
10.99
5.80
9.31
9.44
9.44
16.91
-21.25
12.01
51.33
-55.74
10.83
0.16
7.34
-1.54
2.04
7.27
6.63
2.81
3.93
5.51
15.61
1.30
-16.40
-4.85
12.67
-0.66
51.58
-0.25
-41.62
-14.12
1 Yr
2 Yrs
3 Yrs
4 Yrs
5 Yrs
6 Yrs
7 Yrs
8 Yrs
9 Yrs
10 Yrs
SI 1
21.43
6.72
10.81
10.38
9.37
6.21
6.99
11.33
2.48
2.27
9.87
20.86
0.57
4.20
2.52
7.76
3.05
7.59
2.79
6.79
2.58
4.49
1.72
5.74
1.25
10.09
1.24
3.82
-1.34
4.22
-1.95
9.75
0.12
Returns are presented gross of management fees
1 Since inception (March 31, 2003)
68
Strategy Profile – As at March 31, 2017
EMERGING MARKETS EQUITY
PERFORMANCE BENCHMARK: MSCI Emerging Markets ($CA)
RISK/RETURN ANALYSIS
COUNTRY ALLOCATION (%)
Portfolio
2.27
1.06
18.36
-0.41
0.06
99.87
107.16
Annualized return (%)
Beta
Standard deviation (%)
Information ratio
Sharpe ratio (0.73%)
Up-market capture ratio (%)
Down-market capture ratio (%)
Benchmark
4.22
1.00
16.80
n/a
0.18
n/a
n/a
Country
Composite, 10 year period ending March 31, 2017
Price/Earnings (next twelve months)2
Price/Book (next twelve months)2
Dividend Yield (%)1
Profitability and Growth3
Estimated EPS Growth (%)
Return on Equity (%)
Portfolio
Benchmark
75,829
106,961
Benchmark
29.0
26.9
Korea
14.6
15.1
Brazil
11.3
7.6
India
10.9
8.9
Taiwan
8.8
12.3
South Africa
5.4
6.6
Mexico
4.3
3.7
13.7
19.0
Other (10 countries)
PORTFOLIO CHARACTERISTICS
Liquidity1
Average capitalization (M$)
Valuation
Portfolio
China
Cash
2.0
0.0
Total
100.0
100.0
TOP-10 HOLDINGS (%)
17.07
3.01
1.70
13.85
1.58
2.56
14.77
17.29
11.79
12.48
Source : Factset
1 Weighted Average
2 Harmonic Weighted Average
3 Median
PORTFOLIO MANAGEMENT TEAM
Julian Mayo, Head of the Portfolio Advisory Team, joined Charlemagne
Capital in 2003 as a director of Charlemagne Capital (UK) Limited and a
member of the Portfolio Advisory Team. He became Head of the Portfolio
Advisory Team, with Gabor Sitanyi, in 2009. Julian has more than 25 years
of investment experience, most of which has been focused on emerging
markets. Mark Bickford-Smith, Co-Head of the Portfolio Advisory Team,
joined Charlemagne Capital in 2012, as co-Head of the Portfolio Advisory
Team, alongside Julian Mayo and benefits from 33 years of investment
experience.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Security
Samsung
Taiwan Semiconductor Alibaba
Ping An Insurance
Tencent
Itaú Unibanco
China Construction Bank
Baidu
Naspers
Kroton
Total
Sector
Information Technology
Information Technology
Information Technology
Financials
Information Technology
Financials
Financials
Information Technology
Consumer Discretionary
Consumer Discretionary
Weight
7.2
6.3
5.3
4.8
3.9
3.4
3.3
3.1
2.8
2.7
42.8
ABOUT CHARLEMAGNE CAPITAL
Charlemagne Capital is a specialist emerging and frontier markets asset
manager, with a highly qualified investment team of dedicated investment
professionals at its heart. Charlemagne Capital was established in 2000; it
became part of Fiera Capital in December 2016.
ABOUT FIERA CAPITAL CORPORATION
With more than $116 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
69
Strategy Profile - As at March 31, 2017
MARKET NEUTRAL
STRATEGY DESCRIPTION
HIGHLIGHTS
Absolute return strategy based on “pairs trading” through long and short
positions of equal value, selected following thorough fundamental analysis.
The Fund offers positive long-term returns and downside protection in
case of market downturns. The approach limits volatility and maintains
low correlations to market movements through rigorous risk management
parameters including neutral currency and sector exposure, minimal net
market exposure, and strict liquidity constraints.
Style
Absolute return strategy based on
long‑short pairs trading
Correlations
Low correlation to movements in
different markets
Process
Fundamental bottom-up
Performance objective
Positive absolute returns regardless of
economic environment
Investment horizon
12 Months
Holdings
20 to 40 pairs
Strategy AUM1
$284 M
1
As at March 31, 2017
WHY INVEST IN THIS STRATEGY
Aims to mitigate volatility while generating positive returns
Targets enhanced diversification through a portfolio with low correlation to traditional asset classes
Aims to provide downside risk protection against an equity market slowdown
Focused on fundamental analysis to generate value across market environments
Targets considerably lower volatility than Canadian equities
FUND PERFORMANCE NET OF ALL FEES (%)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Jan.
Feb.
March
April
May
June
July
August
Sept.
-0.79
4.23
2.66
0.85
0.85
0.74
2.04
5.41
1.69
-1.26
3.72
2.46
1.11
-0.51
1.01
2.16
0.47
-0.65
-0.57
-2.31
0.31
3.73
0.49
2.31
-0.39
-0.31
0.98
1.11
1.05
0.47
0.05
6.74
-0.52
-2.01
-0.65
0.88
0.25
-0.37
-1.25
4.38
3.55
-0.93
-0.95
-3.33
-1.75
1.76
2.08
1.61
5.04
-0.58
-4.06
-4.62
-0.21
1.17
1.29
1.85
0.00
-1.61
2.11
-0.20
-3.25
-1.54
3.82
1.23
0.03
2.49
-1.46
1.60
-2.18
-0.49
-1.47
1.64
-1.11
2.18
2.13
-3.43
0.91
1.87
-2.04
0.18
-0.06
1.03
-1.18
-0.82
Oct.
4.62
-0.28
-1.74
1.22
-0.25
1.17
0.16
2.59
-1.49
-0.60
Nov.
1.19
2.47
0.40
3.96
-0.60
0.20
-1.13
0.93
0.90
-2.73
Dec.
5.39
1.54
0.90
2.05
0.11
0.47
2.01
-0.67
-0.15
0.40
Net annualized return since inception2:
2 Inception date: October 1, 2007
RISK/RETURN ANALYSIS
Net annualized return since inception (%)
Annualized standard deviation (%)
Annualized Sharpe ratio (1.13%)
Best monthly return (%)
Worst monthly return (%)
Percentage of months with positive performance
Average return when market is up (%)3
Average return when market is down (%)3
Up-market capture ratio (%)
Down-market capture ratio (%)
RISK DIVERSIFICATION
6.90
7.02
0.82
6.74
-4.62
60.53
0.85
0.07
31.93
-2.10
Since inception (October 1, 2007)
3 Market based on S&P/TSX
70
Year/YTD
11.57
10.01
26.85
5.31
-11.04
-3.74
9.60
11.29
9.96
3.32
-3.09
6.90
Index
91-day Treasury Bills
Bonds (FTSE TMX Universe)
Canadian Equity (S&P/TSX)
US Equity (S&P 500)
Global Equity (MSCI World)
Correlation
-0.06
-0.07
0.25
0.09
0.14
Since inception
Strategy Profile - As at March 31, 2017
MARKET NEUTRAL
PORTFOLIO
MONTHLY COMMENTARY
Number
23
25
Long positions
Short positions
%
67.4
-63.4
MARKET EXPOSURE (GROSS AND NET)
+125%
+100%
+75%
+50%
+25%
0%
-25%
-50%
-75%
-100%
-125%
Long
2009
Short
2010
2011
Net
2013
2012
In the materials sector, the pair including Guyana Goldfields against Klondex
Mines was profitable. Klondex’s operating costs ended up coming in above
expectations, which caused the share price to plunge more than 25%
over the month. The pair including Alamos Gold against Agnico Eagle also
contributed to the Fund’s return.
2014
2015
The solid showing from Québecor, which we paired against a Canadian
telecommunications company, added some vital basis points to the return.
Furthermore, the rebound in Gildan Activewear was beneficial.
2016
During the month, we maintained a relatively low exposure. We did, however,
increase our exposure to the materials sector, acquiring an interest in a Trevali
Mining issue that we paired with a short position in BHP Billiton.
SECTOR EXPOSURE (GROSS AND NET)
Net
Energy
-10.7
+3.4
+14.2
Materials
-13.4
+3.5
+16.9
+3.2
+14.6
Industrials
-7.6
Cons. Disc.
-11.4
Cons. Staples
Health Care
Financials
-0.1
-2.1
+7.4
-0.4
0.0
+1.7
0.0
-10.9
0.0
-3.7
+7.2
Technology
-4.1
Telecom.
-3.2
Utilities
0.0
0.0
0.0
Real Estate
0.0
0.0
0.0
-30%
+1.3
-10%
0.0
0%
10%
20%
30%
COUNTRY EXPOSURE
Canada
78.7
United States and other
0%
21.3
25%
50%
Furthermore, we hedged two short positions in Canadian supermarket
operators. Finally, we took profits on Air Canada after the company published
its financial results.
We continue to scour the Canadian market for securities that are likely to
provide an attractive contribution to the Fund over the next 12 to 18 months.
We remain on the lookout for events that could encourage us to invest more
confidently.
+5.4
-3.2
-20%
The equity markets took a break in March after several months of
uninterrupted gains. The Trump administration’s difficulties in repealing
Obamacare have raised doubts about how quickly the Republicans will
be able to implement their economic campaign promises of tax cuts and
infrastructure spending. In Canada, the energy sector clawed back some
ground over the month despite the decline in oil prices.
75%
100%
Some Canadian domiciled companies are listed in the United States.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
PORTFOLIO MANAGEMENT TEAM
Jean-Philippe Choquette, CFA, is the Senior Portfolio Manager and benefits
from over 17 years of investment experience. He is assisted by Jean‑François
Gagnon, CFA, Portfolio Manager, by Frank Zwarts, MBA, CFA, Portfolio
Manager and by Frédéric Bélisle, P.Eng, MBA, Portfolio Manager. They
respectively benefit from 24, 17 and 16 years of investment experience.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
71
Strategy Profile - As at March 31, 2017
LONG/SHORT EQUITY
STRATEGY DESCRIPTION
HIGHLIGHTS
Absolute return strategy based on a three-tier approach of “pairs trading”,
net long and net short positions, selected following thorough fundamental
analysis. The Fund offers positive long-term returns and downside protection
in case of market downturns. The approach limits volatility and maintains
low correlations to market movements through rigorous risk management
parameters including neutral currency exposure and strict liquidity
constraints.
Style
Absolute return strategy based on
long‑short pairs trading, net long, and
net short opportunities
Correlations
Low correlation relative to movements in
different markets
Process
Fundamental bottom-up
Performance objective
Positive absolute returns
Investment horizon
12 Months
Holdings
20 to 80
Strategy AUM1
$641 M
1
As at March 31, 2017
WHY INVEST IN THIS STRATEGY
Aims to preserve capital in down markets while maintaining strong upside potential
Solid risk/reward profile as measured by Sharpe ratio
Targets enhanced diversification through a portfolio with low correlation to traditional asset classes
Alternative to stocks, having captured most of the market upside and almost none of the downside since inception
Targets lower volatility than equities and downside risk protection
Process emphasizing fundamental analysis and generating alpha through stock selection and active adjustment of net exposure
FUND PERFORMANCE NET OF ALL FEES (%)
Jan.
Feb.
March
April
May
June
July
2010
2011
2012
2013
-3.59
-1.53
7.16
August
-0.85
-0.24
-1.00
0.43
Sept.
5.55
-1.57
-0.18
1.46
Oct.
5.03
-0.32
1.70
3.88
Nov.
7.75
-0.52
1.30
1.42
Dec.
6.22
0.21
1.45
3.91
Year/YTD
25.80
-10.97
1.97
32.91
3.77
1.56
3.29
0.70
2.33
4.02
1.89
0.54
-0.22
-2.61
-1.36
2.21
-0.86
-2.94
0.20
-7.93
0.20
1.26
2014
2015
2016
2017
0.52
5.86
2.54
-3.09
2.75
0.41
1.18
-4.30
1.81
1.11
2.88
1.05
1.55
0.01
-2.92
2.80
3.43
2.47
2.38
3.67
-0.47
2.94
2.27
5.69
-1.18
3.18
3.43
2.41
-1.91
-0.89
4.72
-0.41
-0.89
2.33
0.64
-3.09
-0.52
-1.64
1.57
24.81
17.61
11.68
-6.27
13.55
Net annualized return since inception2:
2 Inception date: August 1, 2010
RISK/RETURN ANALYSIS
Net annualized return since inception (%)
Annualized standard deviation (%)
Annualized Sharpe ratio (0.83%)
Best monthly return (%)
Worst monthly return (%)
Percentage of months with positive performance
Average return when market is up (%)3
Average return when market is down (%)3
Up-market capture ratio (%)
Down-market capture ratio (%)
RISK DIVERSIFICATION
13.55
9.35
1.36
7.75
-7.93
66.25
1.54
0.19
72.39
-8.89
Since inception (August 1, 2010)
3 Market based on S&P/TSX
72
Index
91-day Treasury Bills
Bonds (FTSE TMX Universe)
Canadian Equity (S&P/TSX)
US Equity (S&P 500)
Global Equity (MSCI World)
Correlation
-0.02
-0.14
0.26
0.24
0.26
Since inception
Strategy Profile - As at March 31, 2017
LONG/SHORT EQUITY
PORTFOLIO
MONTHLY COMMENTARY
Number
26
27
Long positions
Short positions
%
75.8
-60.3
MARKET EXPOSURE (GROSS AND NET)
+200%
Long
+150%
Short
Net
In the materials sector, the pair including Guyana Goldfields against Klondex
Mines was profitable. Klondex’s operating costs ended up coming in above
expectations, which caused the share price to plunge more than 25%
over the month. The pair including Alamos Gold against Agnico Eagle also
contributed to the Fund’s return.
+100%
+50%
0%
-50%
The solid showing from Québecor, which we paired against a Canadian
telecommunications company, added some vital basis points to the return.
Furthermore, the rebound in Gildan Activewear was beneficial.
-100%
-150%
-200%
2011
2013
2012
2014
2015
2016
In contrast, in the energy sector, our long positions in Spartan Energy and
Whitecap Resources trended in the same direction as oil prices and negatively
impacted the Fund’s return.
SECTOR EXPOSURE (GROSS AND NET)
Net
Energy
-12.9
Materials
-14.8
Industrials
-6.0
Cons. Disc.
-7.2
Cons. Staples
-0.9
Health Care
Financials
+8.0
+20.9
+9.4
+24.2
+2.2
+8.1
+3.9
+11.2
-0.1
0.0
+0.7
0.0
-10.2
0.0
-7.4
+2.8
Technology
-3.7
Telecom.
-2.7
Utilities
0.0
0.0
0.0
-2.0
0.0
+2.0
Real Estate
+2.2
0.0
0%
50%
COUNTRY EXPOSURE
Canada
83.0
United States and other
0%
17.0
25%
50%
During the month, we maintained a relatively low exposure. We did, however,
increase our exposure to the materials sector, acquiring an interest in a Trevali
Mining issue that we paired with a short position in BHP Billiton.
We continue to scour the Canadian market for securities that are likely to
provide an attractive contribution to the Fund over the next 12 to 18 months.
We remain on the lookout for events that could encourage us to invest more
confidently.
+5.9
-2.7
-50%
The equity markets took a break in March after several months of
uninterrupted gains. The Trump administration’s difficulties in repealing
Obamacare have raised doubts about how quickly the Republicans will
be able to implement their economic campaign promises of tax cuts and
infrastructure spending. In Canada, the energy sector clawed back some
ground over the month despite the decline in oil prices.
75%
100%
Some Canadian domiciled companies are listed in the United States.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
PORTFOLIO MANAGEMENT TEAM
Jean-Philippe Choquette, CFA, is the Senior Portfolio Manager and benefits
from over 17 years of investment experience. He is assisted by Jean‑François
Gagnon, CFA, Portfolio Manager, by Frank Zwarts, MBA, CFA, Portfolio
Manager and by Frédéric Bélisle, P.Eng, MBA, Portfolio Manager. They
respectively benefit from 24, 17 and 16 years of investment experience.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
73
Strategy Profile - As at March 31, 2017
FIERA ACTIVE TRADING FUND *
* Formerly Short-Term Currency and Bond Arbitrage
STRATEGY DESCRIPTION
HIGHLIGHTS
Absolute return strategy based on a dual approach of currency management
and short term arbitrage to benefit from daily price fluctuations. The team
aims to achieve the investment objective by utilizing active trading methods
on a vast array of eligible asset classes and derivative instruments. The active
trading methods will mainly be based on technical and fundamental analysis,
economic indicators, data on capital movement and momentum. This fund,
which places great emphasis on capital preservation, produces both absolute
positive returns and low volatility.
Style
Absolute return, dual strategy based on
currency management and arbitrage
opportunities in short term instruments
Correlations
Low correlation to movements in
different markets
Process
Top-down and technical, short‑term
transactions
Performance objective
Treasury Bills + 5%
Investment horizon
Intraday
Positions
Most positions are closed overnight, use
of leverage only intra-day
Strategy AUM1
$261 M
1
As at March 31, 2017
WHY INVEST IN THIS STRATEGY
Very low realized volatility
Short-term fixed income portfolio targeting low interest rate exposure and low credit risk
Solid risk/reward profile as measured by Sharpe ratio
Diversified solution with multiple, risk-controlled positions
PERFORMANCE (%)
Jan.
2012
2013
2014
2015
2016
2017
0.98
0.33
0.33
0.42
0.10
Feb.
2.51
0.93
0.11
-0.02
0.45
0.11
March
4.51
0.71
0.22
-0.11
0.63
0.07
April
0.72
0.89
-0.02
0.14
0.43
May
0.37
0.77
0.20
-0.04
0.68
June
1.14
1.17
0.09
0.28
0.35
July
0.70
0.51
0.01
0.20
0.21
August
1.03
0.50
0.06
0.19
0.39
Sept.
0.60
0.33
0.18
0.14
0.16
Oct.
0.80
0.27
0.15
0.11
0.13
Nov.
0.56
0.27
0.08
0.12
0.10
Dec.
0.71
0.17
0.53
0.64
0.03
Annualized return since inception2:
Performance returns are gross of management fees and net of administrative and transaction fees from February 2012 to June 2013 and net of all fees since July 2013.
2 Inception date: February 1st, 2012
RISK/RETURN ANALYSIS
RISK DIVERSIFICATION
Annualized return since inception (%)
Standard deviation (%)
Sharpe ratio (0.79%)
Best monthly return (%)
Worst monthly return (%)
Percentage of months with positive performance
5.80
2.29
2.19
4.51
-0.11
93.55
Composite, since inception (February 1st, 2012)
74
Year/YTD
14.45
7.76
1.96
2.01
4.03
0.29
5.80
Index
91-day Treasury Bills
Bonds (FTSE TMX Universe)
Canadian Equity (S&P/TSX)
US Equity (S&P 500)
Global Equity (MSCI World)
Correlation
0.02
-0.10
0.04
0.02
0.02
Composite, since inception (February 1st, 2012)
Strategy Profile - As at March 31, 2017
FIERA ACTIVE TRADING FUND *
* Formerly Short-Term Currency and Bond Arbitrage
MONTHLY COMMENTARY
PORTFOLIO MANAGEMENT TEAM
It was a relatively calm month on the financial markets, with lower-thanusual volatility and liquidity on the bond market.
Richard Levesque, Portfolio Manager, with 30 years of industry experience
and 23 with the firm, is the strategy’s lead manager. He is supported by
Craig Salway, CFA, Portfolio Manager, as well as by Yannick Simoneau, CFA,
Portfolio Manager.
Interest rates hit their highest levels since March 2014. The yield on Canadian
10-year bonds varied between 1.56% and 1.88%, while US 10-year bond
yields shifted within a range of 2.39% and 2.64%. Meanwhile, Canadian
five-year bonds fluctuated between 1.06% and 1.32%, while US five-year
bond yields varied between 1.92% and 2.14%.
Oil fluctuated between $47 and $55, a wider range than in recent months.
The Dow Jones rose further, reaching 21,169 points at its peak, but ended
the month at 20,663.
The Canadian dollar weakened in March and remains volatile, fluctuating
between 1.3265 and 1.3535 against the US dollar. The euro had a calmer
month in March, varying between 1.0494 and 1.0906.
In conclusion, the month of March did not bring any surprises to the financial
markets – the equity markets hit new highs, as did interest rates. The US
Federal Reserve increased its key interest rate by 25 basis points, while there
were no changes from the Bank of Canada.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
75
Strategy Profile - As at March 31, 2017
DIVERSIFIED LENDING
FUND DESCRIPTION
HIGHLIGHTS
The strategy’s investment objective is to provide stable returns mainly
through income generation. The fund will invest in the residential and
commercial construction sector through limited partnerships (LPs) with
various partners specialized in lending solutions. The fund also invests in
limited partnerships that offer private loans to companies and other types
of loans.
Correlations
Low correlation to traditional market
indices and bonds.
Performance objective
91‑day T‑bill + 4.5%
Target Yield
6%
Valuation
Monthly
Average maturity of loans
1 to 2 years
Structure
Pooled fund investing in in a diversified
portfolio of loans
$662 M
Strategy AUM1
1
As at March 31, 2017
WHY INVEST IN THIS STRATEGY
Compelling risk/return proposition achieved through lower duration, higher yielding investments
Stable source of income generation resulting in a consistent track record
Alternative to traditional fixed income portfolios offering solid risk-adjusted returns
Low correlations to traditional equity and bond indices
Short maturity loans ensuring significant liquidity
FUND PERFORMANCE (%)
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Jan.
Feb.
March
0.35
0.49
0.61
0.68
0.65
0.60
0.49
0.49
0.55
0.30
0.46
0.54
0.76
0.56
0.35
0.39
0.57
0.69
0.33
0.62
0.63
0.86
0.61
0.59
0.41
0.60
0.59
April
-0.05
0.31
0.50
0.60
0.86
0.59
0.47
0.50
0.49
May
0.23
0.35
0.48
0.63
0.78
0.61
0.50
0.47
0.58
June
0.42
0.43
0.53
0.64
0.67
0.63
0.45
0.45
0.51
July
0.38
0.41
0.46
0.68
0.67
0.53
0.48
0.49
0.51
August
0.36
0.45
0.45
0.69
0.67
0.68
0.43
0.50
0.50
Sept.
0.61
0.44
0.53
0.70
0.67
0.51
0.46
0.46
0.39
Oct.
-1.21
0.05
0.53
0.63
0.69
0.54
0.48
0.44
0.42
Nov.
0.34
0.79
0.50
0.66
0.69
0.52
0.48
0.51
0.42
Dec.
0.56
0.46
0.61
0.76
0.77
0.66
0.56
0.67
0.37
Annualized return since inception2:
Returns are net of fees payable to underlying funds.
2 Inception date: April 1, 2008
RISK/RETURN ANALYSIS
Net annualized return since inception (%)
Annualized standard deviation (%)
Annualized Sharpe ratio (0.93%)
Best monthly return (%)
Worst monthly return (%)
Percentage of months with positive performance
Average return when market is up (%)3
Average return when market is down (%)3
Worst drawdown (%)
CURRENT BREAKDOWN (%)
6.33
0.76
7.10
0.86
-1.21
98.15
0.54
0.47
-1.21
Since inception
3 Market based on FTSE TMX Universe
76
Year/YTD
1.63
4.76
6.31
8.05
9.13
7.34
6.02
5.93
6.03
1.84
6.33
Residential Real Estate Loans
64.3
Company Loans
13.3
Commercial Real Estate Loans
7.3
Real Estate
1.4
Other
Short‐term
Total
0.0
13.7
100.0
Strategy Profile - As at March 31, 2017
DIVERSIFIED LENDING
MONTHLY COMMENTARY
MANAGEMENT TEAM
The global bond market rout paused in March, even amid ongoing signs of
a synchronized global acceleration. Bond yields pulled back across most of
the yield curve alongside the monthly retreat in oil prices and as investors
scaled back their expectations for rate hikes in the aftermath of the March
FOMC monetary policy meeting, where the Fed raised rates but failed to
accelerate the future pace of normalization – which investors interpreted
as dovish in general. In Canada, short-term bond yields also remained fairly
subdued, particularly as the Bank of Canada continued to look through recent
improvements on the economic front and instead opted to err on the side
of dovishness. Notably, five-year bond yields rose very modestly, while twoyear bond yields declined. Finally, credit spreads widened in the environment
of heightened policy uncertainty and declining oil prices and accordingly,
government bonds outperformed their corporate peers in March.
François Bourdon, FCIA, FSA, CFA, PRM, Chief Investment Solutions Officer, has
22 years of investment experience and, as a member of the Asset Allocation
team, shares responsibility for Fiera’s asset mix decisions. Mr. Bourdon has
held various positions in portfolio management, product development and
actuarial consultation. He is the Lead Portfolio Manager of the fund.
In March, the Fiera Diversified Lending Fund performed according to our
expectations. During the month, we made the following investments:
$2 million in a municipal real estate strategy, $3 million in mid-market
corporate credit in the US, $10 million in Canadian factoring and $7 million
in Canadian real estate.
The historically low level of interest rates combined with receding deflation
risks has created an environment where investors are looking to reduce the
duration of their fixed income portfolio. As such, the Diversified Lending Fund
is well-positioned to accomplish this objective due to its shorter maturity
and its lower duration, a result of the floating nature of the underlying loans
within the Fund’s portfolio.
Marc-André Desjardins, EMBA, Vice President, Private Debt, benefits from
17 years of industry experience, including positions in leading alternative
lending and investment companies. He contributes to the management of
the Diversified Lending strategy.
Yvonne Davidson, CFA, DMS, Vice President, Strategic Development and
Lévis Doucet, Independent Consultant, act as advisers to the fund and
participate in due diligence efforts.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
77
Strategy Profile - As at March 31, 2017
FIERA INFRASTRUCTURE FUND
STRATEGY DESCRIPTION
The fundamental investment objective of the strategy is to provide stable
returns primarily through income generation. To attain this objective, the
Fund invests directly in transportation, energy and social infrastructure
projects or indirectly through other investment vehicles managed by
Fiera Capital, its affiliates or other asset managers, which specialize in
development, implementation and administration of infrastructure projects.
FUND HIGHLIGHTS
Levels of Liquidity
Targeted cash reserve: 20%
Pairing of exiting and incoming investors
Cash inflows from maturing underlying Limited Partnership (LP)
Sale of a portion of the Fund’s LP units to existing limited partners
Infrastructure
vs Bonds
Infrastructure
vs Equities
Return
Return potential
Manager
Fiera Capital
Performance objective
8%
Target yield
5 to 7%
Liquidity
5 levels of liquidity
Structure
Pooled Fund investing in
limited partnerships
Distributions
Higher
Similar
Current revenue
Higher
More stable
and higher
Protection against inflation
Higher
Higher
Risk
Risk of the asset class
All income distributed
Riskier
Less risky
Liquidity
Less liquid
Less liquid
Impact on
overall portfolio risk
Low correlation to other asset classes
and reduced overall portfolio risk
INFRASTRUCTURE ASSET BENEFITS
Long-term investment offering high potential for return
Protection against inflation
Stable and predictable revenues
Diversifying asset class with higher total return potential than bonds and less volatility than equities
PERFORMANCE (%)
2010
2011
2012
2013
2014
2015
2016
2017
Jan.
Feb.
2.06
1.11
0.31
0.80
0.33
0.37
0.67
0.25
0.33
March
-0.15
0.57
1.41
0.23
-0.35
0.58
-0.02
0.26
April
1.19
1.23
-0.34
0.16
May
0.40
-0.10
0.16
0.40
June
-0.05
1.02
1.13
1.01
0.28
1.53
0.49
July
1.15
1.32
0.68
0.40
August
0.60
-0.37
-0.12
0.51
Sept.
0.36
0.63
1.70
0.65
0.20
0.07
0.41
Oct.
-0.11
1.99
0.90
0.41
Nov.
0.60
0.16
0.24
0.19
0.03
Dec.
0.64
0.85
1.48
0.46
1.02
1.21
0.19
Annualized return since inception1:
Returns shown are the returns for the initial series of the fund. Returns for subsequent series may differ.
Returns are net of fees payable to underlying funds. The fund has been valued monthly since February 2013.
1 Inception date: March 1, 2010
78
Year/YTD
0.79
3.11
6.47
6.25
8.13
6.82
3.61
1.40
5.14
Strategy Profile - As at March 31, 2017
FIERA INFRASTRUCTURE FUND
MONTHLY COMMENTARY
ABOUT FIERA CAPITAL CORPORATION
In March, financial market volatility remained fairly subdued in the
environment of improving global growth prospects, while investors largely
shrugged off the Trump administration’s failure to obtain Congressional
approval on the flagship health care bill. Instead, sentiment remained
resilient as investors shifted their focus towards other pro-growth policies
from President Trump’s campaigning platform (such as tax reform) and
accordingly, global equities continued to advance higher during the month.
Despite ongoing strength on the macroeconomic front, bond markets posted
some positive results during the month, with bond yields pulling back amid
the slide in crude oil prices and accordingly, inflation expectations.
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
The performance of the Fiera Infrastructure Fund was modestly positive in
March. Over the last month, we invested $75 million in a US alternative
energy portfolio with 11 solar and wind assets.
Looking forward, the attractiveness of infrastructure investments versus
traditional income vehicles should continue as investors focus on the stability
of cash flows, the relatively high internal rates of return in the asset class and
the lower volatility versus traditional fixed income.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
79
Strategy Profile - As at March 31, 2017
FIERA REAL ESTATE FUND
STRATEGY DESCRIPTION
WHY INVEST IN THIS STRATEGY
This Fund produces growing income and stable total returns through
investment in real property across Canada comprising institutional grade
retail, office, industrial and rental apartments across regions. Fiera Properties
is the investment manager of the underlying real estate strategy. Core
real estate is an attractive element of a multi-asset portfolio based on its
investment characteristics, and its ability to stabilize portfolio performance
and protect against inflation. This strategy is risk-managed with an
Investment Policy that establishes exposure limits by asset size, debt, and
development as well as property type and region.
Inflation Hedge
High Inflation
Low inflation
Rents increase with inflation
Rents increase faster than inflation
creating capital growth
Portfolio Protection
Downside protection during equity market downturns
Overall portfolio diversification benefits
Income Return
FUND HIGHLIGHTS
Stable and growing income with quarterly cash distributions
Manager
Fiera Capital
Performance Objective
Long-term 6-7% net of fees and
expenses incurred by Fiera Properties
Target Yield
4-6%
Valuation
Monthly
Liquidity
4 levels of liquidity
Targeted cash reserve: 20%
Structure
Pooled fund investing in trusts,
mutual fund corporations and limited
partnerships (LP) managed by Fiera
Properties
Distribution
All income distributed
PERFORMANCE
2013
2014
2015
2016
2017
Jan.
0.72
0.01
-0.18
-0.15
Feb.
0.15
-0.02
0.01
0.02
March
1.24
1.20
1.46
2.61
April
0.00
-0.15
-0.11
May
0.05
0.04
0.02
June
1.07
1.74
1.36
July
0.00
-0.05
-0.26
-0.12
August
-0.10
0.23
-0.21
0.01
Sept.
0.22
1.30
1.16
2.51
Oct.
0.20
-0.12
-0.16
-0.16
Nov.
0.08
0.12
0.00
0.02
Dec.
0.18
0.96
1.57
2.39
Annualized return since inception1:
Year/YTD
0.58
5.83
5.00
7.42
2.47
5.68
Returns are net of fees payable to underlying funds.
1 Inception date: July 1, 2013
MONTHLY COMMENTARY
In March, the reflationary trade proved resilient and the global equity
rally lingered on. Investors pivoted their focus towards Trump’s economic
(tax reform) agenda after the vote to amend the Affordable Care Act was
pulled from the floor, while improving macroeconomic backdrop in both
the developed and the emerging world also bolstered risk appetite. In the
environment of improving global growth prospects, the broad Canadian
stock market managed to climb higher despite the slump in crude prices.
However the REIT market lost some momentum and lagged the broad TSX,
despite the decline in interest rates during the month. Meanwhile, global
bond markets posted some mixed results in March. North American bond
yields declined on the back of a fairly cautious outlook from the Federal
Reserve and declining energy prices, while European bond yields backed-up
amid receding political risks and ongoing signs of growth momentum in
the Eurozone.
80
The Fiera Real Estate Fund posted positive results in March. During the
month, we invested $10 million in a property in the province of Quebec.
Looking forward, the attractiveness of real estate versus traditional fixed
income should continue, in our view, owing to the stability of cash flows
and the high single digit expected return of the real estate asset class.
Furthermore, the environment of receding deflationary risks and the
corresponding revival in global growth and inflation expectations should
bode well for inflation-sensitive asset classes such as real estate.
Strategy Profile - As at March 31, 2017
FIERA REAL ESTATE FUND
DIVERSIFICATION BY PROPERTY TYPE
Retail
FIERA PROPERTIES GOVERNANCE
20% to 40%
15% to 40%
Industrial
15% to 40%
Offices
Multi-Residential
5% to 40%
0
10
20
30
40
>> Core Buildings not less than 70% of Fund
>> Up to 70% in Eastern Canada and 55% in Western Canada
>> Up to 40% each in Office, Industrial, Retail and Rental Apartments
>> Leverage: Target 30-35%; Maximum 40%
>> Primarily located in major Canadian cities
PORTFOLIO SUMMARY (%)1
Investments by Property Type
Industrial
36.1
Offices
34.8
Retail
19.1
10.0
100.0
Investments by Property Location
Ontario
49.6
Alberta
26.8
Quebec
12.4
British Columbia
6.4
Nova Scotia
3.0
Total
CEO, President, Fiera Capital Associate
CIO, and two independent members
Investor Advisory Committee
Fund governance body (AC)
Compliance Process
Quarterly report to COO and AC
certifying compliance
Valuation
All properties appraised quarterly
by qualified third-parties.
Fiera Properties is a Canadian real estate investment management company
that provides direct real estate investment opportunities to institutional
investors, foundation and endowment clients, and high net worth investors.
As part of the Fiera Capital family of alternative asset offerings, we are a team
of experienced real estate practitioners backed with the kind of support
that empowers us to offer innovative solutions to our clients’ investment
challenges. We are committed to providing superior client-driven investment
strategies that continuously generate value for our investors. Our vision is
to be the most trusted real estate investment management firm in Canada
as recognized by our stakeholders.
>> Development plus Value Added not more than 30%
Manitoba
Investment Committee
ABOUT FIERA PROPERTIES
>> Development of Core not more than 20%
Total
Comprehensive, clear limits
50
REAL ESTATE INVESTMENT LIMITS
Multi‐Residential
Investment Policy Statement
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
1.8
100.0
1 As at December 31, 2016
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
81
Strategy Profile – As at March 31, 2017
FIERA PROPERTIES CORE FUND
STRATEGY DESCRIPTION
Fiera Properties offers an open-ended fund which produces growing income and stable total returns through direct investment in real property across Canada.
This diversified fund is comprised of institutional grade retail, office, industrial and multi-residential properties. Core real estate is an attractive element of
a multi-asset portfolio based on its investment characteristics, its ability to stabilize portfolio performance and its ability to protect against inflation. This
strategy is risk-managed within an Investment Policy that establishes exposure limits by asset size, debt, property type, region and development.
HIGHLIGHTS
REAL ESTATE ASSET BENEFITS
Manager
Fiera Properties Limited
Performance Objective
Long-term 7-9% net of fees
Income Return Target
Long-term 5-7% annually
Valuation
Independent quarterly appraisal
Liquidity
Quarterly after 12 months
Structure
Fiera Properties CORE Pension Trust
Fiera Properties CORE Institutional Trust
Fiera Properties CORE Private LP
Fiera Properties Financial Institution LP
All of the above are investment feeders
for the Fiera Properties CORE Fund LP
Distribution
All cashflow distributed or reinvested
LIQUIDITY STRATEGIES
>> Targeted cash reserves
Inflation Hedge
High Inflation
Low Inflation
Rents increase with inflation
Rents increase faster than inflation
creating capital growth
Portfolio Protection
Downside protection during equity market downturns
Overall portfolio diversification benefits
Income Return
Stable and growing income with quarterly cash distributions
TARGET DIVERSIFICATION BY PROPERTY TYPE
>> Pairing of exiting and incoming investors
Retail
>> Sale of a portion of the Fund’s LP units to new investors through
Fiera Properties fund raising
Industrial
15% to 40%
>> Sale of a portion of the Fund’s LP units to existing limited partners
Offices
15% to 40%
>> Financing of properties
Multi-Residential
>> Sale of properties (last resort)
20% to 40%
5% to 40%
0
10
20
30
40
50
QUARTERLY COMMENTARY
The Canadian commercial real estate market is continually attracting the
attention of global investors. It’s stability, amongst a world of political
uncertainty should continue to bode well for future investment volumes
and tight pricing as a result. The Manager expects the East to continue to
outperform as the Canadian dollar remains competitively priced against the
US dollar, however believes Alberta may be exhibiting stabilizing market
indicators. Additionally, with the settling down of interest rates since the
US election, Canadian real estate is offering generous risk-adjusted spreads.
Despite the stronger than expected headline employment gain of 19,400
in March, mostly in full-time work, the national downtown office vacancy
rate printed at 11.1% (a 0.8% yoy increase). In terms of the overall national
office market, vacancy rates continue to rise accompanied with falling rents,
a challenging combination.
The industrial asset class continues to exhibit the strongest leasing
fundamentals as national vacancy rates remain tight and have fallen
from a year earlier. This property type on a national basis is exhibiting the
growth that is justifying the record valuations. Distribution and logistical
facilities remain the most coveted segment of this property type as leasing
fundamentals accelerate, especially by 3PL’s (‘third-party logistic’) tenants
that focus on the outsourcing function of other company’s distribution and
fulfillment services.
82
The retail landscape continues to transform as retailers assess their desired
footprint sizes and lay groundwork for new methods of transporting their
goods to consumers. The Manager is attracted to the relative stability of
this asset class, but will heed with caution around big-box centres, fashion
retailers and potentially retail banking tenants.
The national multi-residential market remains the tightest leased property
type in Canada. The multi-residential property type is viewed as providing
an excellent stabilizing and diversification effect to the Fund. The newly
announced Ontario rent and housing reform adds an element of uncertainty
to developers of this property type, however.
Overall, Canadian real estate fundamentals remain somewhat strong, but
are exhibiting wide disparities between markets. It is the Manager’s fiduciary
duty to continue to monitor new developments and form a thesis to invest
accordingly to capture outsized returns while also minimizing risk.
Strategy Profile – As at March 31, 2017
FIERA PROPERTIES CORE FUND
INVESTMENT LIMITS
ABOUT FIERA PROPERTIES
>> Core Buildings not less than 70% of Fund
Fiera Properties is a Canadian real estate investment management company
that provides direct real estate investment opportunities to institutional
investors, foundation and endowment clients, and high net worth investors.
As part of the Fiera Capital family of alternative asset offerings, we are a team
of experienced real estate practitioners backed with the kind of support
that empowers us to offer innovative solutions to our clients’ investment
challenges. We are committed to providing superior client-driven investment
strategies that continuously generate value for our investors. Our vision is
to be the most trusted real estate investment management firm in Canada
as recognized by our stakeholders.
>> Development of Core not more than 20%
>> Development plus Value Added not more than 30%
>> Up to 70% in Eastern Canada and 55% in Western Canada
>> Up to 40% each in Office, Industrial, Retail and Rental Apartments
>> Leverage: Target 25-35%; Maximum 40%
>> Primarily located in major Canadian cities
FIERA PROPERTIES GOVERNANCE
Investment Policy Statement
Comprehensive, clear limits
ABOUT FIERA CAPITAL CORPORATION
Investment Committee
CEO, President, Fiera Capital Associate
CIO, and two independent members
Investor Advisory Committee
Fund governance body (AC)
Compliance Process
Quarterly report to COO and AC
certifying compliance
Valuation
All properties appraised quarterly
by qualified third-parties
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
FIERA PROPERTIES OWNERSHIP STRUCTURE
Fiera Properties Executive Team
61.5%
Fiera Capital Corporation
38.5%
Fiera Properties is jointly owned and controlled by Fiera Capital
and the executive management team of Stuart Lazier, Robert Roy and
Peter Cuthbert who each possess over 31 years of industry experience.
FIERA PROPERTIES CORE FUND RETURNS
Income Return (%)
Capital Growth (%)
Gross Total Return (%)
Net Total Return (%)
Q1 2017
1.62
1.38
3.00
2.80
2016
6.26
3.73
9.99
9.15
2015
6.08
1.24
7.32
6.39
2014
5.85
1.08
6.93
6.00
2013
2.93
3.97
6.90
6.37
Fiera Properties Limited was constituted in November 2011 and merged with Roycom Inc. in April 2012. Composite returns are comprised of all discretionary portfolios managed by Fiera Properties Limited
and its predecessor entities using a core strategy since inception of such predecessor entities on June 30, 1992. The indicated rates of return are the historical annual compounded total returns including
changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced
returns. The Fiera Properties CORE Fund LP is a new fund incepted on April 12, 2013. The Fund made its first acquisition of $164.2 million of assets on June 28, 2013.
[email protected]
1 Adelaide Street East, Suite 600
Toronto, Ontario M5C 2V9
T: 416-955-4857 / 1-800-994-9002
5657 Spring Garden Road, Box 117, Suite 505
Halifax, Nova Scotia B3J 3R4
T: 902-421-1066
1501McGillCollegeAvenue,Suite800
Montréal, Québec H3A 3M8
T: 514-954-3300 / 1-800-361-3499
FieraCapitalCorporation(“FieraCapital”)offerstheopportunitytoinvestintheFieraPropertiesCOREFundLP,managedbyFieraPropertiesLimited,ajointventurewithFieraCapital,throughapooledfundmanagedbyFieraCapitalthathasmonthly
liquidity.Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticular
investmentobjectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.PastPerformanceisnoguaranteeoffutureresults.Information
pertainingtothisFundisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofthisFundismadepursuanttotheFund’sConfidentialOfferingMemorandum,PartnershipAgreementandotherrelated
documentationandonlytothoseinvestorsinjurisdictionsofCanadawhomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationabouttheFund,includingastatementoftheFund’sinvestmentobjective,iscontainedinits
ConfidentialOfferingMemorandumandPartnershipAgreement,copiesofwhichmaybeobtainedfromFieraPropertiesLimited.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheConfidentialOfferingMemorandumandPartnership
Agreementbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountotherchargesorincometaxespayablebyanyunitholderthatwouldhavereducedreturns.TheFundisnotguaranteed,
its value changes frequently and past performance may not be repeated.
Strategy Profile - As at March 31, 2017
FIERA COMOX AGRICULTURE FUND
ABOUT FIERA COMOX PARTNERS
OWNERSHIP STRUCTURE
Fiera Comox is comprised of a team of dedicated experts, headed by Antoine
Bisson McLernon, who have been working together for more than 6 years at
one of Canada’s largest institutional pension plans where they founded and
led the Natural Resources group.
Fiera Capital Corporation
Comox Equity Partners
65%
35%
The team was responsible for deploying a $3B portfolio of direct timber and
agriculture investments on a global scale which achieved an IRR of 16.8%.
The team was one of the largest investors of agriculture and timber in the
world during this period, where they acquired over 2 million acres of land.
FUND STRATEGY
INVESTMENT HIGHLIGHTS
The Fiera Comox Agriculture Fund is dedicated to building a diversified
global portfolio of assets, primarily farmland, generating stable, attractive
returns over the long-term for investors. The Fund seeks to create unique
partnerships with best–in-class local operators and invests primarily in the
sectors of staple row crops, animal protein (dairy, beef), permanent crops
and timberland.
Manager
Fiera Comox Partners
Targeted Gross Return
9 to 11% IRR
Targeted Cash Yield
3 to 5%
Conservative Leverage
30-35% LTV
Vehicle
Open-Ended and Closed-Ended Vehicles
available
Currency
USD
WHY INVEST IN THIS ASSET CLASS
Portfolio diversification – Farmland exhibits low correlation with traditional asset classes and alternative asset classes
Strong risk-adjusted returns
Reliable store of value – Principal asset is land
Inflation hedge
Positive long-term secular trends: population growth, rising incomes and urbanization in developing countries as well as westernization of diets
leads to increased demand for farmland while there is a decline in arable land per person
Attractive cash yield from crop production or rental income
Strong Risk-Adjusted Returns
Positive Long-Term Secular Trends
Time period: 1997-2016
3,000
1.0
U.S. Equities
2,800
0.9
Treasuries
2,600
0.8
2,400
0.7
Gold
2,200
0.6
International Equities
2,000
0.5
Farmland
Corporate Bonds
REITs
Emerging Markets
0.00
0.25
0.50
0.75
1.00
1.25
1.50
Sharpe Ratios
Source: Based on NCREIF Farmland Index for Farmland, S&P 500 Total Return Index for U.S.
Equities, BofA Merrill Lynch U.S. Corp Master Total Return Index Value for Corporate Bonds,
Federal Reserve 10 Year Treasury Constant Maturity Rate for 10 Year Treasuries, Federal Reserve
3 Months Treasury Bill Secondary Market Rate for T Bills, NAREIT Diversified REIT Index for REITs,
Gold Spot Price for Gold, MSCI Emerging Markets Index for Emerging Markets, MSCI EAFE Index
for International Equities.
84
1,800
1965
(3.3B)
1975
(4.1B)
1985
(4.8B)
Calories per Capita
Arable Land per Capita
1998
(6.0B)
2015
(7.3B)
(world populaton)
0.4
Strategy Profile - As at March 31, 2017
FIERA COMOX AGRICULTURE FUND
WHY INVEST IN THIS ASSET CLASS (Cont’d)
Low Correlation with Other Asset Classes
Farmland Correlation (from 1997 to 2016)
U.S. Equities
10-Yr U.S. Treasuries
3-Month T-Bills
Corporate Bonds
REITs
Gold
International Equities
Emerging Markets
0.03
-0.09
-0.10
-0.42
0.06
0.07
0.19
0.09
TARGETED PORTFOLIO
4
3
2
1
0
-1
-2
-3
-4
Inflation Hedge
Asset Class Inflation Betas (1965-2009)
1.7
-3.1
-2.4
0.3
20-Yr
US Treasuries
S&P 500
3-Mo T-Bills
Farmland
VALUE CREATION PROCESS
Targeted Geographies
Acquire resilient, high-quality assets
Country
Range
Target
Develop a deep understanding of assets’ positioning on the global
cost curve and implication on risk and volatility
Buying Right
Robust due diligence processes
United States
Up to 50%
35%
Canada
Up to 30%
10%
Amalgamate assets to take advantage of economies of scale,
productivity gains and generating “portfolio” value impact
Australia
Up to 50%
30%
Local presence & global perspective
New Zealand
Up to 40%
15%
Other
Up to 30%
10%
Total
100%
Local Operational Expertise
Operating
Partnership
Model
Targeted Sectors
Nimble Sourcing Capabilities
Unique Entrepreneurial Model and Alignment of Interests
Financial Discipline and Execution Expertise
Sharing of Best-in-Class Agricultural Practices across Partnerships
Sector
Range
Staple Row Crops
Up to 50%
30%
Animal Protein
Up to 50%
30%
Permanent Crops
Up to 40%
20%
Related Rural Sectors
Up to 40%
20%
Total
Target
100%
Land Improvement
Identify and implement low-risk land development initiatives
ABOUT FIERA CAPITAL CORPORATION
With more than $116 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
The information provided herein does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account
any investor’s particular investment objectives, strategies, tax status or investment horizon. There is no representation or warranty as to the current accuracy of, nor liability for, decisions based on such information.
Past performance is no guarantee of future results. Information pertaining to Fiera pooled funds is not to be construed as a public offering of securities in any jurisdictions of Canada. The offering of units of Fiera
pooled fund is made pursuant to the fund’s Trust Agreement and only to those investors in jurisdictions of Canada who meet certain eligibility or minimum purchase requirements. Important information about Fiera
pooled funds, including a statement of the fund’s investment objective, is contained in its Trust Agreement, a copy of which may be obtained from Fiera Capital Corporation. Unit values and investment returns will
fluctuate. Please read the Trust Agreement of the pooled funds before investing. All performance data assume reinvestment of all distributions or dividends and do not take into account other charges or income
taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
85
Strategy Profile - As at March 31, 2017
MULTI-STRATEGY INCOME
STRATEGY DESCRIPTION
HIGHLIGHTS
This Fund provides an attractive cash yield and stable returns through
income generation. The Fund will invest in a broad range of assets including,
corporate and convertible bonds, preferred shares, private lending, REIT’s,
mortgages, infrastructure and real-estate.
Approach
Multi-style, multi-strategy portfolio
Investment objective
5% annualized income generation plus
moderate capital appreciation
Diversification
The investment philosophy is that fixed-income-related assets will generally
have a short to mid-term orientation, which will reduce capital volatility.
The objective is to benefit from the yield premium available on corporate
investments. Credit risk is minimized by the broad diversification in the
portfolio and active management.
Low correlation to traditional equity and
bond indices
Strategy AUM1
$656 M
The investment team actively manages the asset-class exposures to achieve
the Fund’s objectives based on the risk and return outlook for each asset
class. Security selection is based on fundamental analysis and the managers
lever the research capabilities of Fiera’s fixed income and equity teams.
1
As at March 31, 2017
WHY INVEST IN THIS STRATEGY
Higher yielding solution in today’s low interest rate environment
Investment in a broad range of assets to diversify sources of return
Aims to limit downside risk through a diversified portfolio of
revenue generating traditional and alternative investments
Low duration solution which aims to offer better protection
against interest rate increases
Targets enhanced diversification through low correlation with
traditional asset classes
FUND PERFORMANCE (%)
2009
2010
2011
2012
2013
2014
2015
2016
2017
Jan.
Feb.
March
April
May
June
July
August
Sept.
Oct.
0.99
1.18
1.69
1.15
0.90
0.84
-2.92
1.58
0.95
1.04
0.94
0.41
1.22
0.00
0.06
0.72
0.54
0.88
0.35
0.46
0.91
-0.37
4.07
0.82
0.44
0.14
0.98
0.65
0.83
0.40
1.84
-1.07
0.39
0.01
-0.51
0.15
0.53
0.76
1.16
-0.20
0.14
-1.89
0.69
-0.75
0.31
1.96
0.44
1.17
-0.05
0.45
-0.45
1.60
1.66
-1.11
0.57
-0.68
1.11
-1.42
0.52
2.04
-1.36
0.62
0.56
-0.31
-0.83
0.13
1.16
1.11
0.64
0.71
0.29
2.07
0.97
Dec.
2.39
0.37
1.15
0.93
-0.33
0.03
0.48
1.47
Year/YTD
4.43
10.78
4.39
8.13
0.75
7.12
1.09
8.79
3.15
Annualized return since inception2:
6.53
Returns are net of fees payable to underlying funds.
2 Inception date: November 1, 2009
RISK/RETURN ANALYSIS (%)
Annualized return since inception (%)
Annualized standard deviation (%)
Best monthly return (%)
Worst monthly return (%)
Worst drawdown (%)
Percentage of months with positive performance
RISK DIVERSIFICATION
6.53
3.32
4.07
-2.92
-3.41
79.78
Since inception (November 1, 2009)
86
Nov.
1.99
0.10
0.69
-0.17
0.28
0.63
0.63
-0.22
Index
Bonds (FTSE TMX Universe)
Canadian Equity (S&P/TSX)
Correlation
-0.06
0.51
Since inception (November 1, 2009)
Strategy Profile - As at March 31, 2017
MULTI-STRATEGY INCOME
PORTFOLIO ALLOCATION
MONTHLY COMMENTARY
Asset Class
Weight (%)
Cash
13.2
Bonds
31.1
High Yield
4.2
Convertibles
0.8
Preferred Shares
15.2
Real Estate Investment Trust
6.3
Loans
8.1
Real Estate
3.5
Infrastructure
9.1
Mortgages
6.0
Closed End Funds
1.0
Other
1.5
Total
100.0
ANNUAL CURRENT YIELD
2011
5.6%
2012
4.9%
2013
4.7%
2014
5.0%
2015
5.0%
2016
5.4%
March was another positive month for the Fund. The stock market lacked
direction while the bond market improved with lower inflationary pressure.
As in previous months in 2017, most of our holdings increased in value this
month. Preferred shares have continued their brisk pace upwards this year,
and we once again reduced our exposure, reflecting the reduced relative
attractiveness of the asset class. We slightly increased our position in
emerging market bonds and added infrastructure to the Fund. We have
an unusually high level of very short-term instruments in anticipation of
more attractive levels for existing assets and new investments that we are
targeting, such as private core agriculture investments.
The Trump administration is realizing that passing legislation is not simple
within the US political structure, and the high hopes of rapid tax relief is being
transformed into more realistic expectations about the timing and impact
of upcoming tax reforms. We believe the economy will continue to improve
without reforms and that those reforms will eventually come later in the
year. We expect greater volatility in the coming months as political risk gets
reflected more acutely in financial markets, but we still believe that the path
of least resistance is towards higher equity prices and higher interest rates.
PORTFOLIO MANAGEMENT TEAM
François Bourdon, FCIA, FSA, CFA, PRM, Chief Investment Solutions Officer, has
22 years of investment experience and, as a member of the Asset Allocation
team, shares responsibility for Fiera’s asset mix decisions. Mr. Bourdon has
held various positions in portfolio management, product development
and actuarial consultation. He is assisted by Craig Salway, CFA, Portfolio
Manager, and by one senior analyst.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
87
Strategy Profile - As at March 31, 2017
INCOME OPPORTUNITIES
STRATEGY DESCRIPTION
HIGHLIGHTS
The Income Opportunities strategy aims to generate positive absolute
returns throughout the credit cycle by investing long and short in credit
and other income generating securities; and to pay out a distribution
corresponding to the income generated by the Portfolio. The strategy will
also seek to preserve capital and mitigate risk through the application of
both portfolio and risk management tools.
Style
Long/Short credit focused on the High
Yield market
Diversification
Low correlation relative to movements in
different markets
Process
Fundamental combining top-down and
bottom-up analysis
Performance objective
Stable and positive absolute returns
Strategy AUM1
$113 M
1
As at March 31, 2017
WHY INVEST IN THIS STRATEGY
Solid investment team with deep knowledge of the high yield market
Targets considerably lower volatility than traditional High Yield funds while maintaining superior returns across market cycles
Focus on capital preservation with a significant emphasis on income
Increased diversification through a portfolio with low correlation to traditional asset classes
Generate value through the management of the high yield exposure as well as the portfolio’s duration
FUND PERFORMANCE NET OF ALL FEES (%)
Jan.
2014
2015
2016
2017
0.83
-0.51
0.45
Feb.
2.37
2.11
-0.03
March
-0.12
7.38
-1.32
April
May
June
July
August
Sept.
Oct.
Nov.
Dec.
Year/YTD
0.27
6.10
4.56
0.00
1.04
2.83
-0.61
0.11
0.88
-0.13
1.97
0.03
-0.26
2.64
0.26
-1.49
0.91
0.30
1.07
0.31
-0.01
-0.21
2.13
0.02
0.33
1.67
9.12
2.02
28.77
-0.91
12.78
Net annualized return since inception2:
2 Inception date: May 1, 2014
RISK/RETURN ANALYSIS
Net annualized return since inception (%)
Annualized standard deviation (%)
Annualized Sharpe ratio (0.64%)
Best monthly return (%)
Worst monthly return (%)
Percentage of months with positive performance
Average return when market is up (%)3
Average return when market is down (%)3
Up-market capture ratio (%)
Down-market capture ratio (%)
RISK DIVERSIFICATION
12.78
6.46
1.88
7.38
-1.49
68.57
1.51
0.17
82.57
-8.03
Since inception (May 1, 2014)
3 Market based on S&P/TSX
88
Index
91-day Treasury Bills
Bonds (FTSE TMX Universe)
Canadian Equity (S&P/TSX)
US Equity (S&P 500)
Global Equity (MSCI World)
Correlation
-0.07
-0.21
0.41
0.39
0.49
Since inception
Strategy Profile - As at March 31, 2017
INCOME OPPORTUNITIES
PORTFOLIO STATS
MONTHLY COMMENTARY
Portfolio
3.89
1.97
BBB ⁵
Average YTW
Average duration
Average credit rating (excluding stocks)
Index4 5.88
4.21
B+
4 BofA Merrill Lynch US High Yield Index
5 Cash is weighted as AAA
Looking forward, we feel that the market is overdue for a pullback. The postUS election euphoria has, for the most part, continued. The three pillars
– tax reform, infrastructure spending and deregulation – have been what
investors continue to point to as to why the rally can and should continue.
So far to date, the administration’s ability to execute on this strategy has
been underwhelming. Moreover, valuations are rich and elevated. We feel
that we are in the early innings of a Fed tightening cycle and, while it has
been well forecasted, it is a tightening cycle nonetheless. We are not overtly
bearish given the technicals, but from a tactical perspective we are looking
for a better entry point.
MARKET EXPOSURE (GROSS AND NET)
+100%
Long
+80%
Short
Net
+60%
+40%
+20%
0%
-20%
-40%
2014
2015
ABOUT FIERA CAPITAL CORPORATION
2016
EXPOSURE (%)
Gross
Longs
Shorts
Net
Credit
52.4
51.2
-1.2
50.1
Equity
17.7
14.2
-3.5
10.7
The Fiera Capital Income Opportunities Fund returned -1.32% for the
month of March. That compares to our benchmark the BAML HY Index’s
(hedged) return of 0.23% for the month. On a year-to-date basis, the
Fund has returned -0.91% vs. the benchmark return of 2.66%. The Fund’s
underperformance has been attributable to its substantial cash position, plus
investments in health care and retail.
Overall
70.1
65.4
-4.7
60.8
PORTFOLIO MANAGEMENT TEAM
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
Angus Rogers, CFA, is the Senior Portfolio Manager and benefits from over
27 years of investment experience. He is assisted by Ovidiu Sandu, MBA, CFA,
Portfolio Manager and Neil McCabe, MBA, CFA, Assistant Portfolio Manager.
They benefit from 20 and 13 years of investment experience, respectively.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
89
Strategy Profile – As at March 31, 2017
BALANCED CORE FUND
PERFORMANCE BENCHMARK: Customized benchmark1
STRATEGY DESCRIPTION
HIGHLIGHTS
The Balanced Core Fund seeks to add value within a risk controlled
environment in each of its underlying asset classes as well as through active
asset allocation. The fund combines our Canadian Equity Core, Active Fixed
Income and Global Equity strategies with the extensive expertise of our inhouse asset allocation team in building a well diversified portfolio capable
of delivering superior returns across all market environments.
Style
Balanced strategy without a Canadian
Equity style bias
Process
Asset allocation through a fundamental
investment process.
Underlying strategies:
Bottom-up for equities and
Top-down for fixed income
Investment horizon
Asset allocation: 12 months
Underlying strategies:
Specific to each strategy
Strategy AUM
$1.4 B
ASSET ALLOCATION PROCESS
ASSET ALLOCATION
The asset allocation process relies on a fundamental approach designed to
optimize returns while preserving capital, regardless of the market context.
The analytical framework is achieved through in-house fundamental
economic and market research. The results are framed in economic and
financial scenarios that reflect the investment environment in which we
are engaging. Our asset allocation team is supported by senior portfolio
managers from major asset classes who make recommendations and provide
valuable input on capital market trends.
Asset Class
Short Term
Fixed Income
Canadian Equities
Global Equities
Total
Investment Guidelines (%)
%
4.7
30.1
37.9
27.3
100.0
0
50
100
Actual Range Benchmark
PERFORMANCE (%)
Annual as at December 31
Balanced Core Fund
Benchmark1
Added value
Annualized as at March 31, 2017
Balanced Core Fund
Benchmark1
Added value
Q1
2017
4.26
2.87
1.39
2016
6.84
8.32
-1.48
2015
6.29
3.87
2.42
2014
12.32
10.72
1.60
2013
15.67
13.08
2.59
2012
9.05
7.54
1.51
2011
2.18
0.10
2.08
2010
9.27
9.78
-0.51
2009
17.37
15.73
1.64
2008
-20.94
-16.46
-4.48
2007
3.20
2.87
0.33
2006
14.53
12.56
1.97
1 Yr
2 Yrs
5.21
4.66
0.55
3 Yrs
8.52
7.07
1.45
4 Yrs
5 Yrs
9.86
8.42
1.44
6 Yrs
8.87
7.26
1.61
7 Yrs
9.16
7.76
1.40
8 Yrs
10.03
8.62
1.41
10.67
9.34
1.33
9 Yrs
6.63
5.92
0.71
10 Yrs
5.84
5.29
0.55
9.62
8.66
0.96
12.19
11.54
0.65
SI 2
Returns are presented gross of management fees
Current benchmark: 35% FTSE TMX Universe, 32.5% S&P/TSX, 27.5% MSCI World ex Canada,
5% FTSE TMX Canada 91 days. The benchmark has been modified over time.
2 Inception date: September 1, 1984
1 90
Strategy Profile – As at March 31, 2017
BALANCED CORE FUND
PERFORMANCE BENCHMARK: Customized benchmark1
UNDERLYING STRATEGIES
PORTFOLIO MANAGEMENT TEAM
Fiera Capital’s Canadian Equity Core strategy employs a fundamental core
style, allowing participation in both the value and the growth areas of the
market. The portfolio consist of large and small/mid cap securities with no
extremes in either style bias or individual security or sector positions.
Asset Allocation
The cornerstone of our Active Fixed Income strategy is extensive
fundamental internal research, independent of sell-side analysis and credit
rating agencies, which is applied to portfolios through the use of a multistrategy approach capable of outperforming throughout the business cycle,
with a volatility similar to that of the market.
Only our best and highest conviction ideas are selected for our Global
Equity strategy, a research-focused approach that identifies best of breed
companies with a sustainable competitive advantage and growth potential,
trading at attractive valuations.
François Bourdon, FCIA, FSA, CFA, PRM, with 22 years of investment
experience, is the Senior Portfolio Manager for the strategy and is responsible
for applying the portfolio allocation decisions which are based on our asset
allocation team’s strategy.
Canadian Equity Core
The Canadian Equity Core strategy is managed by a team of highly
experienced Senior Portfolio Managers comprised of Ashish Chaturvedi,
MBA, CFA and Ray Halley, MBA, CFA who are responsible for the large cap
component of the portfolio, and Michael Chan, MBA, CFA, who is responsible
for the small cap component. They are assisted by one analyst covering
Canadian large and mid-cap companies and by one additional analyst
responsible for the coverage of small capitalization companies.
Active Fixed Income
Art Yeates, MBA, CFA and Gaétan Dupuis, M.Sc., both Senior Portfolio
Managers, are the strategy’s lead managers. They benefit from 32 and
27 years of respective investment experience and have been with the
firm for 23 and 15 years. They are supported by Jean-Guy Mérette and David
Frei, CFA, both Portfolio Managers, and by two analysts. They also benefit
from the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
Global Equity
Nadim Rizk, MBA, CFA, is the Senior Portfolio Manager of the strategy and
benefits from 20 years of investment experience with US and International
equities. He is assisted by Andrew Chan, M.Sc., Portfolio Manager, and by
six dedicated analysts.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
91
Strategy Profile – As at March 31, 2017
BALANCED INTEGRATED FUND
PERFORMANCE BENCHMARK: Customized benchmark1
STRATEGY DESCRIPTION
HIGHLIGHTS
The Balanced Integrated Fund seeks to add value within a risk controlled
environment in each of its underlying asset classes as well as through
active asset allocation. The fund combines our Canadian Equity Core,
Integrated Fixed Income and All Country World Equity strategies with the
extensive expertise of our in-house asset allocation team in building a well
diversified portfolio capable of delivering superior returns across all market
environments.
Style
Balanced strategy without a Canadian
Equity style bias. The fixed income
component focuses on rigorous credit
research
Process
Asset allocation through a fundamental
investment process.
Underlying strategies: Bottom-up for equities and
Top-down and Bottom-up for
fixed income
Investment horizon
Asset allocation: 12 months
Underlying strategies:
Specific to each strategy
Strategy AUM
$246 M
ASSET ALLOCATION PROCESS
ASSET ALLOCATION
The asset allocation process relies on a fundamental approach designed to
optimize returns while preserving capital, regardless of the market context.
The analytical framework is achieved through in-house fundamental
economic and market research. The results are framed in economic and
financial scenarios that reflect the investment environment in which we
are engaging. Our asset allocation team is supported by senior portfolio
managers from major asset classes who make recommendations and provide
valuable input on capital market trends.
Asset Class
Short Term
Fixed Income
Canadian Equities
Global Equities
Total
Investment Guidelines (%)
%
2.0
31.0
40.1
26.9
100.0
0
50
100
Actual Range Benchmark
PERFORMANCE (%)
Annual as at December 31
Balanced Integrated Fund
Benchmark1
Added value
Annualized as at March 31, 2017
Balanced Integrated Fund
Benchmark1
Added value
Q1
2017
4.36
3.01
1.35
2016
7.27
9.06
-1.79
2015
6.23
2.86
3.37
2014
12.43
10.72
1.71
2013
14.81
11.99
2.82
2012
9.02
7.80
1.22
2011
-2.60
-0.30
-2.30
2010
9.20
10.28
-1.08
2009
19.14
16.65
2.49
2008
-15.85
-17.03
1.18
2007
1.33
2.78
-1.45
2006
13.66
12.90
0.76
1 Yr
12.89
11.98
0.91
2 Yrs
5.33
4.61
0.72
3 Yrs
8.68
6.98
1.70
4 Yrs
10.28
8.41
1.87
5 Yrs
9.53
8.22
1.31
6 Yrs
8.04
7.02
1.02
7 Yrs
8.34
7.62
0.72
8 Yrs
10.14
9.33
0.81
9 Yrs
6.85
5.84
1.01
10 Yrs
5.98
5.20
0.78
Returns are presented gross of management fees
Current benchmark: 36% FTSE TMX Universe, 35% S&P/TSX, 27% MSCI All Country World Index,
2% FTSE TMX Canada 91 days. The benchmark has been modified over time.
1 92
Strategy Profile – As at March 31, 2017
BALANCED INTEGRATED FUND
PERFORMANCE BENCHMARK: Customized benchmark1
UNDERLYING STRATEGIES
PORTFOLIO MANAGEMENT TEAM
Fiera Capital’s Canadian Equity Core strategy employs a fundamental core
style, allowing participation in both the value and the growth areas of the
market. The portfolio consist of large and small/mid cap securities with no
extremes in either style bias or individual security or sector positions.
Asset Allocation
Through a combination of top-down and bottom-up analysis, with an
emphasis on credit research, the Integrated Fixed Income strategy focuses
on capital preservation within a risk-controlled environment. The anticipation
of economic cycles and themes combined with a strong focus on credit
spread and interest rate movements allows for consistent outperformance
across all market environments.
Only our best and highest conviction ideas are selected for our All Country
World Equity strategy, a research-focused approach that identifies best
of breed companies with a sustainable competitive advantage and growth
potential, trading at attractive valuations.
François Bourdon, FCIA, FSA, CFA, PRM, with 22 years of investment
experience, is the Senior Portfolio Manager for the strategy and is responsible
for applying the portfolio allocation decisions which are based on our asset
allocation team’s strategy.
Canadian Equity Core
The Canadian Equity Core strategy is managed by a team of highly
experienced Senior Portfolio Managers comprised of Ashish Chaturvedi,
MBA, CFA and Ray Halley, MBA, CFA who are responsible for the large cap
component of the portfolio, and Michael Chan, MBA, CFA, who is responsible
for the small cap component. They are assisted by one analyst covering
Canadian large and mid-cap companies and by one additional analyst
responsible for the coverage of small capitalization companies.
Integrated Fixed Income
Philippe Ouellette, M.Sc., CFA, is the Senior Portfolio Manager of the strategy
and benefits from 22 years of investment experience. He is assisted by Peter
Osborne, MA, CFA, Jeff Seaver, CFA and Nicolas Normandeau, M.Sc., CFA,
all three portfolio managers, and by two analysts. They respectively benefit
from 30, 26 and 14 years of investment experience. They also benefit from
the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
All Country World Equity
Nadim Rizk, MBA, CFA, is the Senior Portfolio Manager of the strategy and
benefits from 20 years of investment experience with US and International
equities. He is assisted by Andrew Chan, M.Sc., Portfolio Manager, and by
six dedicated analysts.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
93
Strategy Profile – As at March 31, 2017
BALANCED ENDOWMENT,
FOUNDATION AND TRUST (EFT) FUND
PERFORMANCE BENCHMARK: Customized benchmark1
STRATEGY DESCRIPTION
HIGHLIGHTS
The Endowment, Foundation and Trust (EFT) Fund seeks to add value within
a risk controlled environment in each of its underlying asset classes as well as
through active asset allocation, while giving consideration to Environmental,
Social and Governance (ESG) indicators. The fund combines our Canadian
Equity Core, Active Fixed Income and U.S. and International Equity strategies
with the extensive expertise of our in-house asset allocation team in building
a well diversified portfolio capable of delivering superior returns across all
market environments.
Style
Balanced Environmental, Social and
Governance (ESG) strategy without a
Canadian Equity style bias
Process
Asset allocation through a fundamental
investment process
Underlying strategies:
Bottom-up for equities and
Top-down for fixed income
Investment horizon
Asset allocation: 12 months
Underlying strategies:
Specific to each strategy
Strategy AUM
ASSET ALLOCATION PROCESS
$294 M
ASSET ALLOCATION
Investment Guidelines (%)
The asset allocation process relies on a fundamental approach designed to
optimize returns while preserving capital, regardless of the market context.
The analytical framework is achieved through in-house fundamental
economic and market research. The results are framed in economic and
financial scenarios that reflect the investment environment in which we
are engaging. Our asset allocation team is supported by senior portfolio
managers from major asset classes who make recommendations and provide
valuable input on capital market trends.
Asset Class
Short Term
Fixed Income
Canadian Equities
U.S. Equities
International Equities
Total
%
5.0
29.9
35.4
14.9
14.8
100.0
0
50
100
Actual Range Benchmark
PERFORMANCE (%)
Annual as at December 31
Balanced EFT Fund
Benchmark1
Added value
Annualized as at March 31, 2017
Balanced EFT Fund
Benchmark1
Added value
Q1
2017
4.07
3.01
1.06
2016
6.97
7.79
-0.82
2015
6.82
4.70
2.12
2014
12.27
10.52
1.75
2013
14.46
12.42
2.04
2012
8.51
7.36
1.15
2011
2.45
1.02
1.43
2010
8.91
9.25
-0.34
2009
14.82
14.29
0.53
2008
-15.66
-14.53
-1.13
2007
2.74
2.04
0.70
2006
10.24
11.22
-0.98
1 Yr
11.55
11.48
0.07
2 Yrs
5.24
4.73
0.51
3 Yrs
8.59
7.17
1.42
4 Yrs
10.03
8.56
1.47
5 Yrs
9.69
8.36
1.33
6 Yrs
8.87
7.39
1.48
7 Yrs
8.94
7.77
1.17
8 Yrs
10.16
9.13
1.03
9 Yrs
6.89
6.00
0.89
10 Yrs
6.14
5.33
0.81
Returns are presented gross of management fees
Current benchmark: 35% FTSE TMX Universe, 30% S&P/TSX, 15% S&P 500, 15% MSCI EAFE Net,
5% FTSE TMX Canada 91 days. The benchmark has been modified over time.
Inception date: April 1, 1993
1 94
Strategy Profile – As at March 31, 2017
BALANCED ENDOWMENT,
FOUNDATION AND TRUST (EFT) FUND
PERFORMANCE BENCHMARK: Customized benchmark1
UNDERLYING STRATEGIES
PORTFOLIO MANAGEMENT TEAM
The cornerstone of our Active Fixed Income strategy is extensive
fundamental internal research, independent of sell-side analysis and credit
rating agencies, which is applied to portfolios through the use of a multistrategy approach capable of outperforming throughout the business cycle,
with a volatility similar to that of the market.
Asset Allocation
Fiera Capital’s Canadian Equity Core strategy employs a fundamental core
style, allowing participation in both the value and the growth areas of the
market. The portfolio consist of large and small/mid cap securities with no
extremes in either style bias or individual security positions.
Active Fixed Income
Only our best and highest conviction ideas are selected for our U.S. and
International Equity strategies, a research-focused approach that identifies
best of breed companies with a sustainable competitive advantage and
growth potential, trading at attractive valuations.
François Bourdon, FCIA, FSA, CFA, PRM, with 22 years of investment
experience, is the Senior Portfolio Manager for the strategy and is responsible
for applying the portfolio allocation decisions which are based on our asset
allocation team’s strategy.
Art Yeates, MBA, CFA and Gaétan Dupuis, M.Sc., both Senior Portfolio
Managers, are the strategy’s lead managers. They benefit from 32 and
27 years of respective investment experience and have been with the
firm for 23 and 15 years. They are supported by Jean-Guy Mérette and David
Frei, CFA, both Portfolio Managers, and by two analysts. They also benefit
from the expertise of our entire fixed income team, which boasts two distinct
trading desks in Montreal and Toronto.
Canadian Equity Core
The Canadian Equity Core strategy is managed by a team of highly
experienced Senior Portfolio Managers comprised of Ashish Chaturvedi,
MBA, CFA and Ray Halley, MBA, CFA who are responsible for the large cap
component of the portfolio, and Michael Chan, MBA, CFA, who is responsible
for the small cap component. They are assisted by one analyst covering
Canadian large and mid-cap companies and by one additional analyst
responsible for the coverage of small capitalization companies.
U.S. and International Equities
Nadim Rizk, MBA, CFA, is the Senior Portfolio Manager of the strategy and
benefits from 20 years of investment experience with US and International
equities. He is assisted by Andrew Chan, M.Sc., Portfolio Manager, and by
six dedicated analysts.
ABOUT FIERA CAPITAL CORPORATION
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
95
Strategy Profile – As at March 31, 2017
FIERA CAPITAL’S ESG AND ETHICAL STRATEGIES
Fiera offers a wide range of strategies to meet the needs of
our clients who wish to consider environmental, social and
governance (ESG) factors within their portfolios.
With more than $2.5 billion in assets under management and a variety of
strategies, Fiera Capital is a recognized leader in the responsible investment
field. Our proposition includes ESG/‌ethical strategies in Canadian, U.S.
and International equities, as well as fixed income strategies with ethical
considerations. They are under the responsibility of our experienced
investment teams who have proven their ability to generate consistent long
term superior returns.
Proud signatory of the United Nations Principles for
Responsible Investment (PRI)
Fiera Capital has been a signatory of the PRI since 2009. The United
Nations-supported Principles for Responsible Investments (PRI) Initiative is a
voluntary international network of investors working together to incorporate
ESG issues into investment practices, with the goal of understanding the
implications of sustainability for investors.
Fiera Capital’s ESG and Ethical Strategies
ESG CONSIDERATIONS
AND ETHICAL SCREENING
Canadian Equity
Core
ETHICAL SCREENING
Global Equity
Selexia1
US
International
Balanced
EFT2
Fixed Income
Customized
Active
1 Selexia Investment Management is a sub-advisor for Fiera Capital.
2 Balanced Endowment, Foundation and Trust Fund
ESG FRAMEWORK
ESG Considerations – A Twofold Approach
Ethical
Screening
ESG
Considerations
Integrated
Approach
ESG Friendly
Proxy voting
>> Fiera Capital’s CIO Office, in collaboration with our in-house risk
measurement team and Sustainalytics, a leading independent firm
in ESG research and analysis, have developed tools to assess the ESG
performance of securities held in each portfolio. Companies that score
poorly in any of the three ESG areas are further analyzed in order to
better understand the rationale and implications of the scores and
company practices.
>> Each of our investment teams tailors the scope and extent of their
ESG approach in order to ensure the integrity of their underlying
investment strategy.
Proxy Voting
Ethical Screening
An exclusionary filter is applied to the investment universe and a company
is deemed ineligible if it derives more than 10% of its revenue, either directly
or indirectly, from the following products: adult entertainment, alcohol,
firearms, gambling, military contracting, nuclear power and tobacco.
The list of ineligible companies is provided by a leading independent firm in
ESG research and analysis on a monthly basis.
96
Fiera Capital’s Proxy Voting Policy covers ESG issues and is strictly followed
by all investment teams as we believe that high standards of corporate
governance are necessary for maximizing shareholder value.
Our investment management teams therefore take ESG issues into
consideration when voting each proxy.
Our teams tend to vote in favor of ESG issues, while taking into consideration
the impact on a company’s ability to create wealth.
Strategy Profile – As at March 31, 2017
FIERA CAPITAL’S ESG AND ETHICAL STRATEGIES
POSITIONING EXAMPLE
Fiera Capital Canadian Equity ESG Fund
Sector
Energy
Materials
Industrials
Consumer Discretionary
Consumer Staples
Health Care
Financials
Information Technology
Telecommunication Services
Utilities
Total portfolio
Weight
(%)
23.3
10.6
9.6
6.0
4.2
0.0
38.0
0.0
7.2
1.2
100.0
ESG Factors
Total Score
Environment Factor
Score
1.15
Social Factor
Score
1.19
1.11
1.13
1.12
1.13
0.00
1.18
1.14
1.01
0.00
1.19
1.15
0.94
1.20
1.00
0.00
1.09
0.89
1.14
1.20
0.00
0.90
1.00
1.02
1.08
0.00
0.91
1.07
0.00
1.31
0.00
1.20
1.19
0.85
0.00
1.13
1.08
1.02
0.96
1.14
1.09
1.14
1.11
Governance Factor
Score
1.09
1.00
1.16
1.00
Factor scores present the relative score of a security or sector versus its peer universe. A score above 1 indicates a stronger ranking than the peer group while a score below 1 indicates a lower ranking.
Individual security factor scores are provided by Sustainalytics. Peer groups are composed of all comparable companies ranked by Sustainalytics within all developed countries and are not limited
to the securities composing the fund’s benchmark, in order to present a more representative and complete comparative universe. Portfolio securities for which Sustainalytics does not provide
information are excluded for calculation purposes, which can lead to an unavailable ESG score for a portfolio sector.
CANADIAN COALITION FOR GOOD GOVERNANCE
ABOUT FIERA CAPITAL CORPORATION
Fiera Capital is a member of the Canadian Coalition for Good Governance
(CCGG) which is Canada’s pre-eminent corporate governance organization.
CCGG promotes strong governance practices in public companies and the
improvement of the regulatory environment to best align the interests of
boards and management with those of their shareholders.
With more than $122 billion in assets under management, Fiera Capital, an
independent firm, is one of Canada’s leading investment managers recognized
for its excellence in portfolio management, innovative and personalized
investment solutions, and its ability to surpass client expectations. We
offer a unique expertise in both traditional and absolute return investment
strategies.
RESPONSIBLE INVESTMENT ASSOCIATION
Fiera Capital is a member of the Responsible Investment Association (RIA)
which is Canada’s membership association for Responsible Investment (RI).
RIA promotes and supports an integrated reporting framework and the
integration of ESG factors into investment analysis and decision-making
processes.
Fiera Capital’s highly diversified clientele is comprised of pension funds,
foundations, religious and charitable organizations, high net worth
individuals, financial institutions, mutual funds and managed asset platforms.
[email protected]
Theinformationprovidedhereindoesnotconstituteinvestmentadviceanditshouldnotbereliedonassuch.Itshouldnotbeconsideredasolicitationtobuyoranoffertosellasecurity.Itdoesnottakeintoaccountanyinvestor’sparticularinvestment
objectives,strategies,taxstatusorinvestmenthorizon.Thereisnorepresentationorwarrantyastothecurrentaccuracyof,norliabilityfor,decisionsbasedonsuchinformation.Pastperformanceisnoguaranteeoffutureresults.Informationpertaining
toFierapooledfundsisnottobeconstruedasapublicofferingofsecuritiesinanyjurisdictionsofCanada.TheofferingofunitsofFierapooledfundismadepursuanttothefund’sTrustAgreementandonlytothoseinvestorsinjurisdictionsofCanada
whomeetcertaineligibilityorminimumpurchaserequirements.ImportantinformationaboutFierapooledfunds,includingastatementofthefund’sinvestmentobjective,iscontainedinitsTrustAgreement,acopyofwhichmaybeobtainedfromFiera
CapitalCorporation.Unitvaluesandinvestmentreturnswillfluctuate.PleasereadtheTrustAgreementofthepooledfundsbeforeinvesting.Allperformancedataassumereinvestmentofalldistributionsordividendsanddonottakeintoaccountother
charges or income taxes payable by any unitholder that would have reduced returns. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
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C3 - Inside Front Cover
C2
Disclaimers and legalese
— CLIENT SERVICES
FIERA CAPITAL CORPORATION
Montreal
Calgary
Halifax
1501 McGill College Avenue
Suite 800
Montreal, Quebec
H3A 3M8
607 8th Avenue SW
Suite 300
Calgary, Alberta
T2P 0A7
5657 Spring Garden Road
Suite 505
Halifax, Nova Scotia
B3J 3R4
T 514 954-3300 T 1 800 361-3499
T 403 699-9000
T 902 421-1066
Toronto
Vancouver
1 Adelaide Street East
Suite 600
Toronto, Ontario
M5C 2V9
1040 West Georgia Street
Suite 520
Vancouver, British Columbia
V6E 4H1
T 416 364-3711 T 1 800 994-9002
T 604 688-7234 T 1 877 737-4433
fieracapital.com
[email protected]
With 13 offices spanning Canada, the United States1, the United Kingdom2 and Europe2,
the firm has over 600 employees and is dedicated to servicing our highly diversified
clientele. To see the locations, please visit fieracapital.com
This document is intended only to provide general information and is not intended to be and should not be construed or relied upon as legal or other profes¬sional advice. Fiera Capital Corporation assumes no liability by
providing this guidance to its clients or any other person or entity. The information provided herein may or may not apply in any particular situation. Users should carefully review the guidance included here to determine
applicability. The information and opinions herein are provided for informational purposes only and are subject to change. The information provided herein does not constitute investment advice and it should not be relied
on as such. It should not be considered a solicitation to buy or an offer to sell a security. Performance figures pertaining to composites are aggregations of the performance of one or more client portfolios or pooled funds
that represent similar investment strategies. Further information on the investment strategy of composites and pooled funds managed by Fiera Capital Corporation or its affiliates can be found at www.fieracapital.com. All
performance data is time weighted and assumes reinvestment of all distributions or dividends and does not take into account other charges or income taxes payable that would have reduced returns. Valuations and returns
are computed and stated in Canadian dollars, unless otherwise noted. Past performance is no guarantee of future results and other calculation methods may produce different results. Individual account or fund performance
will vary. Information pertaining to Fiera pooled funds is not to be construed as a public offering of securities in any jurisdictions of Canada. The offering of units of Fiera pooled funds is made pursuant to the funds’ respective
trust agreements and only to those investors in jurisdictions of Canada who meet certain eligibility or minimum purchase requirements. Important information about Fiera pooled funds, including a statement of the fund’s
investment objective, is contained in their trust agreements, a copy of which may be obtained from Fiera Capital Corporation. Unit values and investment returns will fluctuate. Please read the trust agreement of the pooled
funds before investing. Pooled funds are not guaranteed, their values change frequently and past performance may not be repeated.
Legal Notice to U.S. Persons: Fiera Capital Corporation (“Fiera Capital”) does not provide investment advisory services, or offer investment funds, in the United States or to U.S. persons. Investment advisory services for
U.S. persons are provided by Fiera Capital’s U.S. affiliates (the “U.S. Advisers”). Any investment advisory services of Fiera Capital provided to U.S. persons are (or were) provided by the U.S. Advisers, in each case pursuant
to a “participating affiliate” arrangement with Fiera Capital in accordance with applicable guidance of the staff of the U.S. Securities and Exchange Commission (the “SEC”). The U.S. Advisers are SEC-registered investment
advisers. Unless otherwise indicated, all dollar figures are expressed in Canadian dollars.”
1
Fiera Capital Corporation is not authorized to conduct regulated activities in the United Kingdom and any such activities are only conducted by Charlemagne Capital (UK) Limited, a wholly owned subsidiary of Fiera Capital
Corporation.” Fiera Capital Corporation is not authorized to conduct regulated activities in the Isle of Man and any such activities are only conducted by Charlemagne Capital (IOM) Limited, a wholly owned subsidiary
of Fiera Capital Corporation. Fiera Capital Corporation is not authorized to conduct regulated activities in Germany. Charlemagne Capital (UK) Limited, a wholly owned subsidiary of Fiera Capital Corporation, maintains
a branch office which is registered with the regulator in Germany.
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2