A Portfolio Manager`s Perspective

A PORTFOLIO MANAGER’S PERSPECTIVE
Global Market Outlook
As part of our August 6, 2014 Wealth Matters webcast, we heard from Rehan Chaudhri, Principal and Portfolio
Manager, Altrinsic Global Advisors. His presentation, summarized on this page, provided an outlook on the global
market. Please see the reverse for highlights of the other half of the webcast, in which Michelle Connolly, VicePresident, Wealth Planning at CI Investments, Inc., and Titus Ebenezer, Regional Vice-President, Wealth Planning at
United Financial, a division of CI Private Counsel LP discussed U.S. taxpayer issues.
Altrinsic organization update
 Approximately C$15 billion in assets under management as of June 30, 2014.
Second quarter 2014 performance summary
 Strong performance among our health care, financial, and industrials stocks were sources of positive attribution.
Telecommunication services and energy holdings were notable detractors from relative performance during the
quarter.
Investment landscape
 Aggressive monetary policies continue to be the primary driver of what has been a synchronized rise in risky
assets.
 Bond markets are being led by junk bonds and peripheral European sovereign debt.
 Real estate is led by markets already in elevated territory.
 The conditions within the global equity landscape are more favorable than many other asset classes.
 An increased focus on shareholder value creation and an acceleration of mergers and acquisition (M&A) activity
are unlocking value and are themes that will likely persist.
Current positioning
United International Equity Value Pool
 Our current number of holdings remains near the low end of our historical range.
 We are significantly underweight Western banks and have a meaningful exposure to Japanese financials, while in
Europe we have concentrated positions in leading multinational consumer and health care franchises.
 We believe the embedded systematic or market risk in our portfolios is less than that of the broad market. The
greatest risks to our ability to outperform would arise if Western banks (particularly those in Europe) and
companies with high debt levels lead the markets, and/or if Japanese companies significantly lag in isolation.
 Our portfolio is positioned with a concentration of holdings in high-quality, multinational blue-chip franchises, a
modest exposure to deeply undervalued companies domiciled in Japan, and an idiosyncratic collection of
undervalued companies in a range of industries.
 Reflecting our conviction and the growing disparities in valuations, the portfolio has become even more
concentrated as we redeployed capital to companies offering more attractive fundamental and value characteristics.
Outlook
As a byproduct of our investment activity and prevailing market conditions, our correlation to broad markets will
likely decline, while the short-term variation in both absolute and relative performance will likely increase. We
believe that taking a long-term view and accepting greater short-term volatility at the stock-specific and portfolio
level provide a foundation for delivering superior long-term absolute and risk-adjusted returns. Low valuation and
a margin of safety continue to be embedded in our process and portfolios. As we look at our portfolio, we have
great confidence in the market leadership positions of many of our holdings, strong balance sheets, attractive
valuations and continued dividend payouts and share buybacks.
A WEALTH PLANNING PERSPECTIVE
It’s not beware, rather be aware – U.S.
taxpayer issues
Having tax ties to the United States does not mean beware, rather be aware of the additional considerations and act
accordingly. During the Wealth Matters webcast, Michelle Connolly, Vice-President, Wealth Planning at CI Investments,
Inc., and Titus Ebenezer, Regional Vice-President, Wealth Planning at United Financial, a division of CI Private Counsel
LP, highlighted recent immigration and information-sharing changes that impact Canadians spending time in the U.S., and
the various tax and information reporting obligations of U.S. taxpayers residing in Canada.
The following individual scenarios were highlighted:
A) A Canadian resident/citizen taxpayer that spends a significant time in the U.S. or owns U.S. situs assets – may be
exposed to U.S. Income and Transfer Tax Regimes – which includes Gift and Estate Tax provisions; or
B) A U.S. taxpayer residing in Canada is subject to all U.S. Tax Regimes, and as such there may be an impact on
Canadian investment accounts, solutions and tax and estate planning.
Time considerations for a Canadian resident/citizen:
Deemed a U.S. taxpayer if they are physically present in the U.S. for more than 183 days in a calendar year, or if he/she
satisfies the “Substantial Presence Test” and has not filed Form 8840 “Closer Connection Exception Statement for Aliens.”
What are examples of U.S. situs assets?
• Real property and tangible personal property situated in the U.S.
• U.S. securities, certain U.S. debt obligations, U.S. mutual funds including money market funds
• Interests in certain trusts if assets are U.S. situs
• Business-related assets owned by a sole proprietor, or a partner.
Considerations for U.S. taxpayer clients residing in Canada:
1. Subject to all U.S. Tax Regimes – income tax and various information reporting obligations depending upon investment
accounts and solutions;
2. Passive Foreign Investment Corporation (PFIC) – Canadian mutual fund trust units, corporate class shares and ETF
units are considered PFIC and necessitate Form 8621 “Information Return by a Shareholder of a Passive Foreign
Investment Corporation or Qualified Electing Fund” to be filed annually per fund; and
3. Foreign Account Tax Compliance Act (FATCA) – the purpose of which is to engage (or burden?) foreign financial
institutions to assist the U.S. in curbing offshore tax evasion by its taxpayers.
A client that is a U.S. taxpayer must consider both Canadian and U.S. tax and estate laws when planning. As well, certain
Canadian investment accounts may be detrimental to the client from a U.S. tax perspective.
For 2014, and future years, CI and United Funds will provide PFIC Annual Information Statements to enable its
U.S. taxpayer clients to utilize the QEF election method of reporting PFIC holdings.
Starting July 1, 2014 Assante will be posing questions, based upon a self-certification approach, on all new accounts to
determine possible U.S. tax ties. Existing accounts will be transitioned over the next two years. Certain U.S. taxpayer
account information will start being provided to the CRA in early 2015 based upon 2014 tax year.
We highly recommend clients that are U.S. taxpayers or who may have U.S. tax ties speak to a competent, cross-border tax
advisor to discuss such matters in further detail.
This document is intended solely for general information purposes. It is not a sales prospectus, nor should it be construed as an offer or an invitation to take part in
an offer. Before acting on any of this information, please speak to your advisor for individual financial advice based on your personal circumstances. United
Financial solutions are managed by CI Investments Inc. Assante Wealth Management (Canada) Ltd. and CI Private Counsel LP are subsidiaries of CI Investments
Inc. Neither CI Investments Inc. nor its affiliates or their respective officers, directors, employees or advisors are responsible in any way for damages or losses of
any kind whatsoever in respect of the use of this document. United Financial and design are registered trademarks of CI Investments Inc. The market commentary
portion of this document reflects the views of the portfolio manager and does not necessarily reflect the views of CI Investments Inc. Commissions, trailing
commissions, management fees and expenses may all be associated with investments in mutual funds. Investments in mutual funds are not guaranteed, their values
change frequently and past performance may not be repeated. Please read the fund prospectus and consult your advisor before investing.