CIBC Disciplined International Equity Fund
S 18 E
Annual Financial Statements for the financial year ended December 31, 2010 Statement of Investment Portfolio
Security
Number of Shares
As at December 31, 2010 Average Cost ($000s)
Current Value ($000s)
% of Net Assets
INTERNATIONAL EQUITIES Australia AGL Energy Ltd. Alumina Ltd. Amcor Ltd. Australia and New Zealand Banking Group Ltd. Australian Stock Exchange Ltd. BHP Billiton Ltd. Caltex Australia Ltd. Coca-Cola Amatil Ltd. Cochlear Ltd. Commonwealth Bank of Australia Fortescue Metals Group Ltd. Foster’s Group Ltd. Goodman Group Macarthur Coal Ltd. Newcrest Mining Ltd. Orica Ltd. OZ Minerals Ltd. Qantas Airways Ltd. QR National Ltd. Rio Tinto Ltd. Suncorp Group Ltd. Tabcorp Holdings Ltd. Transurban Group Wesfarmers Ltd. Wesfarmers Ltd., Price Protected Shares Westpac Banking Corp. Ltd. Woolworths Ltd.
Austria Raiffeisen International Bank-Holding AG Telekom Austria AG
Belgium Anheuser-Busch InBev NV Bekaert SA Umicore
Bermuda SeaDrill Ltd.
China Yangzijiang Shipbuilding Holdings Ltd.
Denmark Carlsberg AS, Series ‘B’ Coloplast AS, Class ‘B’ Danske Bank AS DSV AS Novo Nordisk AS, Series ‘B’ Novozymes AS, Class ‘B’
Finland Kesko OYJ, Series ‘B’ Kone OYJ, Class ‘B’ Metso OYJ Nokian Renkaat OYJ Pohjola Bank PLC, Series ‘A’ Stora Enso OYJ, Series ‘R’
Security
UPM-Kymmene Corp. OYJ Wärtsilä OYJ, Series ‘B’ 3,037 393,072 180,874 70,042 3,151 39,726 15,634 73,668 1,570 47,790 41,593 15,146 83,385 9,514 8,791 32,610 525,990 33,115 42,484 4,342 40,309 19,552 14,514 45,095 17,659 2,426 1,958
4,146 55,072
25,647 4,279 28,204
23,697
301,000
10,291 1,069 4,027 2,827 32,379 8,417
15,660 18,245 25,524 23,302 22,754 151,775
44 764 1,025 1,365 120 1,411 187 681 87 2,159 261 90 47 106 349 699 785 85 116 292 354 142 75 1,189 415 51 49
47 995 1,244 1,666 121 1,840 229 816 129 2,473 278 88 55 124 363 828 925 86 118 379 353 142 76 1,471 582 55 54
12,948
15,537
226 789
228 773
1,015
1,001
1,279 473 1,391
1,460 489 1,463
3,143
3,412
540
799
540
799
276
446
276
446
1,072 119 101 58 2,557 983
1,031 145 103 63 3,640 1,172
4,890
6,154
534 654 794 790 283 1,453
729 1,010 1,423 853 272 1,556
5.8%
0.4%
1.3%
0.3%
0.2%
2.3%
France Accor SA Air France-KLM Air Liquide SA Bureau Veritas SA Carrefour SA Christian Dior SA Compagnie Générale des Établissements Michelin, Registered, Series ‘B’ Dassault Systèmes SA Edenred Eurazeo Fonciere des Regions Gecina Groupe Eurotunnel SA Hermes International Icade Lagardère SCA, Registered Legrand SA L’Oréal SA LVMH Moët Hennessy-Louis Vuitton SA Natixis Pinault-Printemps Redoute SA PSA Peugeot Citroën SA Publicis Groupe Renault SA SAFRAN SA Schneider Electric SA Thales SA Unibail-Rodamco SE Vallourec SA Vivendi SA
Germany Adidas-Salomon AG Axel Springer AG BASF SE Bayer AG Bayerische Motoren Werke (BMW) AG Bayerische Motoren Werke (BMW) AG, Preferred Beiersdorf AG Brenntag AG Commerzbank AG Continental AG Daimler AG, Registered Deutsche Lufthansa AG Deutsche Post AG, Registered Fraport AG Fresenius AG, Preferred Fresenius Medical Care AG Fresenius SE GEA Group AG Henkel AG & Co. KGaA Henkel AG & Co. KGaA, Preferred Hochtief AG Infineon Technologies AG Kabel Deutschland Holding AG Lanxess Linde AG MAN SE METRO AG Porsche AG, Preferred ProsiebenSat.1 Media AG, Preferred
Number of Shares
Average Cost ($000s)
Current Value ($000s)
138,125 15,319
2,217 753
2,440 1,163
7,478
9,446
21,438 9,390 787 10,097 2,418 11,077
942 170 94 711 117 1,446
952 171 99 763 99 1,579
1,177 6,793 2,668 2,293 1,985 3,255 10,114 11,361 3,769 8,511 9,382 3,511 14,812 27,506 6,309 15,056 7,583 3,003 15,996 11,266 2,328 3,368 2,084 27,880
92 426 64 168 210 388 89 2,470 380 343 300 394 1,797 158 867 580 250 173 373 1,294 82 646 203 742
84 511 63 170 191 357 89 2,373 383 350 381 389 2,431 128 1,001 570 394 174 565 1,683 81 664 218 751
15,969
17,664
480 239 1,038 384 2,995 511 166 64 530 945 2,098 1,265 145 520 848 143 436 230 177 816 232 313 64 375 537 2,036 366 135 82
474 245 1,260 381 3,192 572 166 69 469 957 2,109 1,236 146 516 974 147 523 281 199 940 243 508 63 379 550 2,139 362 135 80
7,261 1,501 15,766 5,181 40,766 11,154 2,996 685 62,925 12,266 31,170 56,710 8,706 8,229 11,452 2,538 6,211 9,756 3,826 15,137 2,891 54,326 1,349 4,877 3,633 17,887 5,026 1,697 2,667
% of Net Assets
3.5%
6.5%
The accompanying notes are an integral part of these financial statements.
CIBC Disciplined International Equity Fund
Security
Siemens AG, Registered Thyssen Krupp AG TUI AG, Registered Volkswagen AG Volkswagen AG, Preferred Wacker Chemie AG
Hong Kong AIA Group Ltd. Bank of East Asia Ltd. BOC Hong Kong (Holdings) Ltd. Cathay Pacific Airways Cheung Kong (Holdings) Ltd. Cheung Kong Infrastructure Holdings Ltd. CLP Holdings Ltd. Hang Lung Group Ltd. Hang Lung Properties Ltd. Hang Seng Bank Ltd. Hong Kong & China Gas Co. Hong Kong Exchanges & Clearing Ltd. Hongkong Electric Holdings Ltd. Hutchison Whampoa Ltd. Hysan Development Co. Ltd. Kerry Properties Ltd. Li & Fung Ltd. Orient Overseas International Ltd. Shangri-La Asia Ltd. SJM Holdings Ltd. Sun Hung Kai Properties Ltd. Swire Pacific Ltd., Class ‘A’ Wharf (Holdings) Ltd. (The) Wheelock and Co. Ltd. Wing Hang Bank Ltd. Yue Yuen Industrial Holdings Ltd.
Ireland Experian PLC WPP PLC
Israel Israel Corp. Ltd. (The)
Italy Enel Green Power SPA Enel SPA EXOR SPA Fiat SPA Finmeccanica SPA Pirelli & C., SPA Saipem SPA Telecom Italia SPA, RNC
Japan Aeon Co. Ltd. AEON Mall Co. Ltd. Aisin Seiki Co. Ltd. All Nippon Airways Co. Ltd. Asahi Glass Co. Ltd. ASICS Corp. Bank of Kyoto Ltd. (The) Canon Inc. Central Japan Railway Co. Cosmo Oil Co. Ltd. Credit Saison Co. Ltd. Daido Steel Co. Ltd. Daihatsu Motor Co. Ltd. Dai-ichi Life Insurance Co. (The) DAIICHI SANKYO CO. LTD. Daito Trust Construction Co. Ltd. DeNA Co. Ltd. FamilyMart Co. Ltd. Fanuc Ltd. Fuji Heavy Industries Ltd. Fukuoka Financial Group Inc. Hamamatsu Photonics K.K. Hisamitsu Pharmaceutical Co. Inc. Hitachi Ltd.
Number of Shares
Average Cost ($000s)
Current Value ($000s)
13,568 7,455 11,330 1,283 8,902 4,196
1,404 312 121 185 1,266 789
1,683 310 157 181 1,447 734
22,247
23,827
551 352 2,013 590 803 133 525 951 718 215 219 905 174 2,024 445 146 814 198 610 258 293 979 428 214 466 17
506 339 2,230 778 796 132 541 953 706 211 199 888 175 2,075 570 134 992 270 706 260 280 1,086 550 221 508 20
15,041
16,126
171 1,367
257 1,679
1,538
1,936
533
612
533
612
74 153 361 764 117 496 511 411
70 156 464 847 118 479 709 378
2,887
3,221
690 499 65 726 50 232 95 946 312 155 151 305 549 330 284 881 44 131 1,567 703 113 320 179 1,600
770 547 81 749 58 255 94 1,054 317 169 179 385 610 306 281 988 61 135 2,056 868 112 349 180 1,963
181,100 81,600 660,000 284,000 52,000 29,000 67,000 146,000 152,000 12,900 85,000 39,400 28,000 203,000 122,000 26,000 172,000 28,000 262,000 165,000 17,000 66,500 72,000 55,000 37,000 5,500
20,718 136,194
507
33,100 31,300 14,116 41,102 10,431 59,439 14,415 348,702
61,900 20,500 2,300 202,000 5,000 20,000 10,000 20,600 38 52,000 11,000 66,000 40,000 190 12,900 14,500 1,700 3,600 13,500 113,000 26,000 9,600 4,300 371,000
% of Net Assets
8.8%
6.0%
0.7%
0.2%
1.2%
The accompanying notes are an integral part of these financial statements.
Security
Hitachi Metals Ltd. Hokuriku Electric Power Co. Idemitsu Kosan Co. Ltd. Isuzu Motors Ltd. ITOCHU Corp. Japan Prime Realty Investment Corp. Japan Real Estate Investment Corp. Japan Retail Fund Investment Corp. JGC Corp. JX Holdings Inc. Kansai Electric Power Co. Inc. Kansai Paint Co. Ltd. Kawasaki Kisen Kaisha Ltd. KDDI Corp. Keihin Electric Express Railway Co. Ltd. Keisei Electric Railway Co. Ltd. Kobe Steel Ltd. Komatsu Ltd. Makita Corp. Marubeni Corp. Marui Co. Ltd. McDonald’s Holdings Co. (Japan) Ltd. Meiji Holdings Co. Ltd. Miraca Holdings Inc. Mitsubishi Chemical Holdings Corp. Mitsubishi Electric Corp. Mitsubishi Materials Corp. Mitsui & Co. Ltd. Mitsui O.S.K. Lines Ltd. Nabtesco Corp. NGK Spark Plug Co. Ltd. Nintendo Co. Ltd. Nippon Building Fund Inc. Nippon Telegraph & Telephone Corp. Nippon Yusen Kabushiki Kaisha Nishi-Nippon City Bank Ltd. (The) Nissan Motor Co. Ltd. Nitto Denko Corp. Nok Corp. Nomura Real Estate Office Fund Inc. NTN Corp. NTT DoCoMo Inc. Omron Corp. Oriental Land Co. Ltd. Orix Corp. Sankyo Co. Ltd. Sapporo Hokuyo Holdings Inc. Sega Sammy Holdings Inc. Shimano Inc. Shiseido Co. Ltd. Showa Shell Sekiyu K.K. SMC Corp. Softbank Corp. Sony Corp. Sony Financial Holdings Inc. Sumitomo Corp. Sumitomo Realty & Development Co. Ltd. Sumitomo Rubber Industries Ltd. Sysmex Corp. Takashimaya Co. Ltd. Takeda Pharmaceutical Co. Ltd. Tanabe Seiyaku Co. Ltd. Tokyo Gas Co. Ltd. Tokyu Land Corp. Uni-Charm Corp. USS Co. Ltd. Yamaha Motor Co. Ltd.
Jersey Channel Islands Randgold Resources Ltd.
Luxembourg Millicom International Cellular SA
Mauritius Essar Energy Ltd.
Number of Shares
Average Cost ($000s)
Current Value ($000s)
23,000 5,000 1,800 276,000 42,100 64 39 382 3,000 174,200 2,800 8,000 129,000 27 35,000 8,000 399,000 32,300 5,700 6,000 39,400 9,500 13,600 5,400 99,000 61,000 34,000 9,900 10,000 10,200 4,000 200 23 3,000 122,000 23,000 17,400 1,500 9,700 39 14,000 224 13,200 11,600 7,130 1,600 64,700 41,200 13,300 7,400 27,500 300 34,500 5,400 133 48,900 11,000 24,900 600 11,000 13,700 10,200 65,000 85,000 16,400 1,860 6,700
272 123 154 859 354 184 372 521 66 980 71 78 528 158 354 54 863 847 234 37 289 229 658 217 516 536 108 155 69 215 54 61 232 135 511 68 134 71 163 265 75 386 298 1,067 577 90 294 641 697 166 248 41 1,071 192 455 603 249 250 35 92 645 148 287 405 567 126 98
274 122 190 1,243 423 196 403 728 65 1,175 69 77 560 155 308 53 1,005 969 231 42 319 237 612 216 666 635 108 162 68 216 61 58 235 136 535 69 164 70 200 280 74 389 347 1,069 696 90 301 779 672 161 250 51 1,185 192 534 686 261 258 41 94 671 171 287 424 649 151 108
32,525
36,493
3,271
10,507
7,827
307
269
307
269
1,001
1,003
1,001
1,003
67
71
67
71
% of Net Assets
13.5%
0.1%
0.4%
0.0%
CIBC Disciplined International Equity Fund
Security
Netherlands Corio NV European Aeronautic Defence and Space Co. Fugro NV, CVA ING Groep NV Koninklijke Boskalis Westminster NV, CVA Koninklijke DSM NV Koninklijke Philips Electronics NV Koninklijke Vopak NV
Norway DNB NOR ASA Orkla ASA Telenor ASA Yara International ASA
Portugal Galp Energia, SGPS, SA, Class ‘B’ Jeronimo Martins SGPS SA Portugal Telecom SGPS SA, Registered
Singapore City Developments Ltd. Fraser and Neave Ltd. Global Logistic Properties Ltd. Jardine Cycle & Carriage Ltd. Keppel Corp. Ltd. Keppel Land Ltd. Oversea-Chinese Banking Corp. Ltd. Sembcorp Marine Ltd. Singapore Airlines Ltd. Singapore Exchange Ltd. Singapore Press Holdings Ltd. Singapore Technologies Engineering Ltd. United Overseas Bank Ltd.
Spain Amadeus IT Holding SA, Class ‘A’ Banco de Sabadell SA Banco Santander Central Hispano SA, Registered Criteria Caixacorp SA Ferrovial SA Iberia Lineas Aereas de Espana SA Industria de Diseno Textil SA Repsol YPF SA Telefónica SA
Sweden AB SKF, Series ‘B’ Alfa Laval AB Assa Abloy AB, Series ‘B’ Atlas Copco AB, Series ‘A’ Atlas Copco AB, Series ‘B’ ForeningsSparbanken AB Hennes & Mauritz AB, Series ‘B’ Hexagon AB, Series ‘B’ Holmen AB, Series ‘B’ Kinnevik Investment AB Modern Times Group MTG AB, Class ‘B’ Ratos AB, Series ‘B’ Sandvik AB, Redemption Shares Scania AB, Series ‘B’ Skandinaviska Enskilda Banken, Series ‘A’ Skanska AB, Series ‘B’ Svenska Handelsbanken, Series ‘A’ Swedish Match AB Tele2 AB, Series ‘B’ Volvo AB, Series ‘B’
Switzerland ABB Ltd., Registered Actelion Ltd., Registered Aryzta AG, Registered Compagnie Financière Richemont SA
Number of Shares
Average Cost ($000s)
Current Value ($000s)
4,577 45,200 1,181 6,603 618 737 41,992 4,946
308 1,143 70 72 24 34 1,344 199
293 1,051 97 64 29 42 1,283 233
3,194
3,092
95 87 1,649 79
182 97 2,067 81
1,910
2,427
75 406 812
75 687 738
1,293
1,500
658 846 58 444 439 529 262 280 406 576 824 388 179
673 1,113 55 766 571 676 353 312 431 542 844 430 184
5,889
6,950
99 147 248 1,081 1,015 501 1,014 885 997
103 113 166 1,063 980 504 1,320 927 962
5,987
6,138
772 514 835 754 951 1,442 360 905 148 654 604 318 484 1,406 567 135 193 376 1,379 1,949
1,005 709 1,352 1,224 1,487 1,756 359 937 153 725 670 368 749 1,694 595 179 242 476 1,665 2,534
14,746
18,879
28 306 197 2,145
29 310 206 3,426
12,981 9,951 127,192 1,401
3,905 45,231 64,858
69,000 224,000 33,000 27,000 65,000 181,300 46,000 75,000 36,326 83,000 273,000 162,000 13,000
4,930 28,864 15,681 199,802 98,533 117,982 17,702 33,220 42,272
35,420 33,796 48,217 48,783 66,101 126,299 10,844 43,868 4,668 35,834 10,175 10,008 38,637 74,012 71,742 9,065 7,607 16,532 80,717 144,704
1,312 5,675 4,464 58,449
% of Net Assets
1.1%
0.9%
0.6%
2.6%
2.3%
7.0%
Security
GAM Holding Ltd. Geberit AG, Registered Givaudan SA, Registered Julius Baer Group Ltd. Kuehne & Nagel International AG, Registered Lindt & Spruengli AG Lindt & Spruengli AG, Registered Logitech International SA, Registered Nestlé SA, Registered, Series ‘B’ Novartis AG, Registered Schindler Holding AG Schindler Holding AG, Registered SGS SA, Registered Sika AG Swatch Group AG, Registered Swatch Group Ltd. (The) Swisscom AG UBS AG, Registered Zurich Financial Services AG
United Kingdom Admiral Group PLC Aggreko PLC Amec PLC Anglo American PLC Antofagasta PLC ARM Holdings PLC Associated British Foods PLC AstraZeneca PLC BG Group PLC BHP Billiton PLC British Airways PLC British American Tobacco PLC British Land Co. PLC British Sky Broadcasting Group PLC BT Group PLC Bunzl PLC Burberry Group PLC Cairn Energy PLC Carnival PLC Centrica PLC Compass Group PLC Diageo PLC Fresnillo PLC GlaxoSmithKline PLC Hammerson PLC HSBC Holdings PLC ICAP PLC InterContinental Hotels Group PLC International Power PLC Intertek Group PLC ITV PLC J Sainsbury PLC Johnson Matthey PLC Land Securities Group PLC Legal & General Group PLC Liberty International PLC Lloyds Banking Group PLC London Stock Exchange Group PLC Man Group PLC Old Mutual PLC Pearson PLC Petrofac Ltd. Prudential PLC Reckitt Benckiser Group PLC Rio Tinto PLC, Registered Rolls-Royce Group PLC Rolls-Royce Group PLC, Class ‘C’ Royal Bank of Scotland PLC (The) Royal Dutch Shell PLC, Class ‘A’ Royal Dutch Shell PLC, Class ‘B’ SABMiller PLC Schroders PLC Serco Group PLC Severn Trent PLC Shire PLC Smiths Group PLC Standard Chartered PLC Standard Life PLC Tesco PLC
Number of Shares
Average Cost ($000s)
Current Value ($000s)
50,220 290 1,050 20,259 1,452 169 9 10,822 88,566 43,346 12,206 5,366 145 348 8,702 7,426 590 141,992 1,070
804 49 965 812 153 469 274 212 4,224 2,447 1,010 412 232 633 388 2,126 235 2,465 260
827 67 1,130 945 201 509 289 205 5,172 2,543 1,439 640 243 761 700 3,300 259 2,324 276
20,846
25,801
1,129 1,616 1,084 195 373 1,666 352 1,771 90 271 553 2,040 445 1,935 1,888 33 948 1,386 22 1,464 733 168 649 1,505 598 2,949 861 470 1,989 1,136 212 608 18 793 1,254 634 1,023 194 259 872 1,333 1,064 462 92 429 1,505 — 443 1,548 616 1,828 189 167 1,133 2,455 1,145 1,575 641 26
1,249 1,595 1,095 249 671 2,341 383 1,588 88 342 561 2,342 446 1,932 2,025 33 1,785 1,366 26 1,507 818 176 959 1,260 588 2,342 1,060 695 2,157 1,046 211 603 20 793 1,186 652 888 197 263 869 1,468 1,420 478 105 570 1,843 33 347 1,642 657 2,483 268 156 1,261 2,721 1,309 1,487 612 21
52,972 69,142 61,047 4,773 26,580 343,989 20,827 34,936 4,330 8,515 132,098 61,058 54,510 168,528 715,103 2,910 101,857 208,641 558 291,765 90,368 9,504 36,764 65,137 90,536 229,793 127,150 35,682 315,903 37,949 192,598 102,926 641 75,402 785,177 100,219 862,793 15,082 56,909 452,584 93,406 57,317 45,883 1,914 8,017 189,639 21,045,648 566,606 49,309 19,895 70,671 9,282 17,998 54,679 113,172 67,538 55,254 181,569 3,227
% of Net Assets
9.6%
The accompanying notes are an integral part of these financial statements.
CIBC Disciplined International Equity Fund
Security
United Utilities Group PLC Vodafone Group PLC Weir Group PLC (The) Whitbread PLC
Number of Shares
Average Cost ($000s)
Current Value ($000s)
116,803 1,404,791 22,848 19,651
1,071 3,712 640 475
1,078 3,677 633 548
% of Net Assets
58,735
63,224
23.3%
TOTAL INTERNATIONAL EQUITIES
235,005
266,028
98.6%
TOTAL EQUITY
235,005
266,028
98.6%
266,028
98.6%
Less: Transaction costs included in average cost TOTAL INVESTMENTS Other Assets, less Liabilities TOTAL NET ASSETS
(371) 234,634
3,709
1.4%
269,737
100.0%
The accompanying notes are an integral part of these financial statements.
CIBC Disciplined International Equity Fund Supplemental Schedule to Statement of Investment Portfolio
As at December 31, 2010
Risk Management
EUR GBP JPY CHF SEK HKD AUD SGD DKK USD NOK
Currency (note 2l)
Investment Objective: CIBC Disciplined International Equity Fund (the Fund) seeks to provide long-term growth through capital appreciation by investing primarily in a diversified portfolio of equity securities of foreign companies located in Europe, the Far East, and the Pacific Rim. Investment Strategies: The Fund intends to apply a mathematical process to construct an investment portfolio from the universe of common stocks within its benchmark, the MSCI EAFE Index. The goal is to build a more efficient version than the benchmark by searching for stocks within the benchmark that have high relative volatility (providing the potential for excess returns) but have low correlation with each other (providing the potential for lower relative risk). The Statement of Investment Portfolio presents the securities held by the Fund as at December 31, 2010 and groups the securities by asset type, industry sector, geographic region, or currency exposure. Significant risks that are relevant to the Fund are discussed below. General information on risk management and specific discussion on credit, currency, interest rate, liquidity, and other price/market risk can be found in note 2 of the financial statements. Summary of Investment Portfolio as at December 31, 2009 The following chart presents the investment sectors held by the Fund as at December 31, 2009 and groups the securities by asset type, industry sector, geographic region, or currency exposure: Portfolio Breakdown
International Equities Australia Austria Belgium Bermuda China Cyprus Denmark Finland France Germany Greece Guernsey Hong Kong Israel Italy Japan Jersey Channel Islands Luxembourg Netherlands New Zealand Norway Portugal Singapore Spain Sweden Switzerland United Kingdom Other Assets, Less Liabilities Total
% of Net Assets
11.6 0.5 0.9 0.2 0.1 0.3 1.1 1.9 8.1 5.1 0.9 0.1 4.4 0.6 2.9 16.8 0.2 0.1 3.7 0.5 0.8 1.0 2.6 5.4 3.6 7.1 18.3 1.2 100.0
Credit Risk Credit ratings represent a consolidation of the ratings provided by various outside service providers and are subject to change, which could be material. See the Statement of Investment Portfolio for counterparty from over-the-counter derivative contracts, where applicable. As at December 31, 2010 and 2009, the Fund had no significant investments in debt instruments.
Total Currency Exposure* ($000s)
% of Net Assets
79,242 63,793 33,009 25,664 17,944 17,831 15,534 6,888 5,742 2,843 2,734
29.4 23.7 12.2 9.5 6.7 6.6 5.8 2.6 2.1 1.1 1.0
*Amounts reflect the carrying value of monetary and non-monetary items (including the notional amount of forward foreign currency contracts, if any). As at December 31, 2009 Currency (note 2l)
Total Currency Exposure* ($000s)
% of Net Assets
73,441 45,171 40,152 28,002 17,009 10,680 8,563 6,333 2,592 2,568 2,517 1,197
30.8 19.0 16.9 11.8 7.1 4.5 3.6 2.7 1.1 1.1 1.1 0.5
EUR GBP JPY AUD CHF HKD SEK SGD USD DKK NOK NZD
*Amounts reflect the carrying value of monetary and non-monetary items (including the notional amount of forward foreign currency contracts, if any). The table below indicates how, if the Canadian dollar had strengthened or weakened by 1% in relation to all foreign currencies, net assets as at December 31, 2010 and 2009 would have decreased or increased. This analysis assumes that all other variables remain unchanged. In practice, the actual results may differ from this analysis and the difference could be material. Impact on Net Assets ($000s)
December 31, 2010
December 31, 2009
2,719
2,382
Interest Rate Risk As at December 31, 2010 and 2009, the majority of the Fund’s financial assets and liabilities are non-interest bearing and short-term in nature; accordingly, the Fund is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. Liquidity Risk The Fund is exposed to daily cash redemptions of redeemable units. As at December 31, 2010 and 2009, the Fund retains sufficient cash and cash equivalent positions to maintain adequate liquidity. Other Price/Market Risk The table below indicates the change in net assets had the value of the Fund’s benchmark(s) increased or decreased by 1%, as at December 31, 2010 and 2009. This change is estimated based on the historical correlation between the return of Class A units of the Fund as compared to the return of the Fund’s benchmark(s), using 36 monthly data points, as available, based on the monthly net returns of the Fund. This analysis assumes that all other variables remain unchanged. The historical correlation may not be representative of the future correlation and, accordingly, the impact on net assets could be materially different. Impact on Net Assets ($000s) Benchmark
MSCI EAFE Index
December 31, 2010
December 31, 2009
2,890
2,235
Currency Risk The tables below indicate the currencies to which the Fund had significant exposure as at December 31, 2010 and 2009, based on the market value of the Fund’s financial instruments (including cash and cash equivalents) and the underlying principal amounts of forward foreign currency contracts, as applicable.
The accompanying notes are an integral part of these financial statements.
CIBC Disciplined International Equity Fund Fair Value of Financial Instruments The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund’s financial assets and financial liabilities, carried at fair value: Classification
Level 1 (i) ($000s)
Level 2 (ii) ($000s)
Level 3 (iii) ($000s)
Total ($000s)
Financial Assets Equities
1,032
264,996
—
266,028
Total Financial Assets
1,032
264,996
—
266,028
(i) Quoted prices in active markets for identical assets (ii) Significant other observable inputs (iii) Significant unobservable inputs
Transfer of assets between Level 1 and Level 2 Financial assets and liabilities transferred from Level 1 to Level 2 are the result of securities no longer being traded in an active market. ($000s)
Fair value of assets transferred from Level 1 to Level 2 during the period
70
Financial assets and liabilities transferred from Level 2 to Level 1 are the result of the securities now being traded in an active market. There were no transfers of financial assets and liabilities from Level 2 to Level 1 in the current period. Reconciliation of financial asset and liability movement — Level 3 The Fund did not hold any significant positions of Level 3 investments at the beginning of, during, or at the end of the period.
The accompanying notes are an integral part of these financial statements.
CIBC Disciplined International Equity Fund Statements of Net Assets (in 000s, except per unit amounts)
Statements of Operations (in 000s, except per unit amounts)
As at December 31, 2010 and 2009 (note 1)
For the periods ended December 31, 2010 and 2009 (note 1) 2010
Assets Investments at current value† (notes 2 and 3) Cash including foreign currency holdings, at current value Accrued interest and dividends receivable Receivable for portfolio securities sold Receivable for units issued Unrealized currency gain on receivables and payables
$
Total Assets
2009
266,028 $ 5,850 771 33,832 137 87
235,234 2,990 659 25 27 —
306,705
238,935
36,961 3 — 4 —
374 16 363 40 24
Liabilities Payable for portfolio securities purchased Payable for units redeemed Management fees payable Other accrued expenses Unrealized currency loss on receivables and payables Total Liabilities
36,968
817
Total Net Assets
$
269,737 $
238,118
Net Assets per Class (note 11) Class A Class O
$ $
10,736 $ 259,001
238,118 n/a
Net Assets per Unit †† (notes 4 and 11) Class A Class O
$ $
8.43 $ 11.89
8.08 n/a
†
Securities Lending The Fund has assets involved in securities lending transactions outstanding as at December 31, 2010: Aggregate Value of Securities on Loan ($000s)
Aggregate Value of Collateral for Loan ($000s)
9,126
9,591
2010
Income Dividend revenue Securities lending revenue Expenses (notes 5 and 8) Management fees± Audit fees Custodial fees Regulatory fees Unitholder reporting costs
Net Investment Income (Loss) Realized and Unrealized Gain (Loss) on Investments Net realized gain (loss) on sale of investments Net realized gain (loss) on foreign currency (notes 2d and e) Transaction costs±± Increase (decrease) in unrealized appreciation (depreciation) of investments Net Gain (Loss) on Investments
ii
iii
iv
v
9,162
—
58
371
Reconciliation of Net Assets per Unit (note 11)
Class A Class O
Net Assets per Unit
Adjustment for CICA 3855 Valuation Difference per Unit
Net Asset Value per Unit
$ 8.43 $11.89
$ — $ —
$ 8.43 $11.89
Organization of the Fund (note 1)
Class A Class O
7,246
2,242 9 133 16 42
4,504 14 248 18 45
2,442
4,829
(452)
(650)
1,990
4,179
4,125
3,067
(507) (473) (767)
(25,739) (639) (294)
11,640
38,624
9,893
11,952
14,018
$
15,019
Increase (Decrease) in Net Assets from Operations per Class Class A Class O
$ $
(31,466) $ 45,484
15,019 n/a
Increase (Decrease) in Net Assets from Operations per Unit Class A Class O
$ $
(2.27) $ 2.08
0.52 n/a
±
Maximum Chargeable Management Fee Rates (note 5)
±±
2.00% 0.00%
Brokerage Commissions and Fees (notes 7 and 8) 2010
2009
405 — —
297 — —
— —
— —
2010
2009
10
37
Brokerage commissions and other fees ($000s) Total Paid Paid to CIBC World Markets Inc. Paid to CIBC World Markets Corp. Soft dollars ($000s) Total Paid Paid to CIBC World Markets Inc. and CIBC World Markets Corp. Administrative and Other Fund Operating Expenses (note 8)
($000s)
The Fund was established on August 29, 2006 (Date Established).
6,115
$
*See note 2h for Collateral Type definitions. ††
7,044 202
Increase (Decrease) in Net Assets from Operations
Class A Class O
i
5,969 $ 146
Expenses waived/absorbed by the Manager
Collateral Type* ($000s)
—
$
2009
Inception Date
Service Provider (note 8)
September 29, 2006 June 1, 2010
The amounts paid by the Fund (including all applicable taxes) to CIBC Mellon Trust Company for custodial fees, and to CIBC Mellon Global Securities Services Company (CIBC GSS) for securities lending, fund accounting and reporting, and portfolio valuation (all net of absorptions) for the periods ended December 31, 2010 and 2009 are as follows:
($000s)
2010
2009
134
334
The accompanying notes are an integral part of these financial statements.
CIBC Disciplined International Equity Fund Statements of Changes In Net Assets (in 000s) For the periods ended December 31, 2010 and 2009 (note 1) Class A Units
Class O Units
2010
2009
(31,466) $
15,019 $
45,484
—
(2,884)
(3,797)
—
(2,884)
(3,797)
Changes Due to Unitholder Transactions Amount received from the issuance of units Amount received from reinvestment of distributions Amount paid on redemptions of units
27,242 — (223,158)
22,197 2,883 (3,222)
226,134 3,797 (12,617)
(195,916)
21,858
217,314
Increase (Decrease) in Net Assets for the Period Net Assets at Beginning of Period
(227,382) 238,118
33,993 204,125
259,001 —
238,118 $
259,001
Increase (Decrease) in Net Assets from Operations
$
Distributions Paid or Payable to Unitholders† From net investment income
Net Assets at End of Period
$
10,736 $
2010
Units Issued and Outstanding (note 4) Balance — beginning of period Units issued for cash Units issued on reinvestment of distributions
29,454 3,587 —
26,246 3,281 359
— 22,572 321
Units redeemed
33,041 (31,768)
29,886 (432)
22,893 (1,108)
1,273
29,454
21,785
Balance — end of period †
Capital and Non-Capital Losses (note 6) As at December 2010, the Fund has available non-capital and capital losses (in $000s) for income tax purposes available to be carried forward as follows: Non-Capital Losses that Expire in:
Total Capital Losses
Total Non-Capital Losses
2011
2012 to 2014
2015 to 2019
2020 to 2030
67,705
—
—
—
—
—
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements December 31, 2010 and 2009 1. Organization of the Funds and Financial Reporting Periods Each of the CIBC Mutual Funds and CIBC Family of Managed Portfolios (individually, a Fund, and collectively, the Funds) is a mutual fund trust organized under the laws of Ontario and governed by a declaration of trust (Declaration of Trust). CIBC Securities Inc. is the principal distributor, Canadian Imperial Bank of Commerce (CIBC) is the manager (the Manager), and CIBC Trust Corporation is the trustee (the Trustee) of the Funds. Each Fund has an unlimited number of classes of units and may issue an unlimited number of units of each class. In the future, the offering of any classes of a Fund may be terminated or additional classes may be offered. The following table indicates the classes of units offered for sale for each of the Funds, as at the date of these financial statements: Funds
Class A
Class T4
Class T6
Class T8
Premium Class
Class O
CIBC Canadian T-Bill Fund
✓
✓
CIBC Money Market Fund
✓
✓
✓
CIBC U.S. Dollar Money Market Fund
✓
✓
✓
CIBC Short-Term Income Fund
✓
CIBC Canadian Bond Fund
✓
CIBC Monthly Income Fund
✓
✓
CIBC Global Bond Fund
✓
✓
CIBC Global Monthly Income Fund
✓
✓
CIBC Balanced Fund
✓
CIBC Dividend Income Fund
✓
✓
CIBC Dividend Growth Fund
✓
✓
CIBC Canadian Equity Fund
✓
CIBC Canadian Equity Value Fund
✓
CIBC Canadian Small-Cap Fund
✓
CIBC Disciplined U.S. Equity Fund
✓
✓
CIBC U.S. Small Companies Fund
✓
✓
CIBC Global Equity Fund
✓
CIBC Disciplined International Equity Fund
✓
✓
CIBC European Equity Fund
✓
✓
CIBC Emerging Markets Fund
✓
✓
CIBC Asia Pacific Fund
✓
✓
CIBC Latin American Fund
✓
CIBC International Small Companies Fund
✓
CIBC Financial Companies Fund
✓
CIBC Canadian Resources Fund
✓
CIBC Energy Fund
✓
CIBC Canadian Real Estate Fund
✓
CIBC Precious Metals Fund
✓
CIBC Global Technology Fund
✓
CIBC Canadian Short-Term Bond Index Fund
✓
CIBC Canadian Bond Index Fund
✓
CIBC Global Bond Index Fund
✓
CIBC Balanced Index Fund
✓
CIBC Canadian Index Fund
✓
✓
CIBC U.S. Broad Market Index Fund
✓
✓
CIBC U.S. Index Fund
✓
CIBC International Index Fund
✓
CIBC European Index Fund
✓
CIBC Emerging Markets Index Fund
✓
CIBC Asia Pacific Index Fund
✓
CIBC Nasdaq Index Fund
✓
CIBC Managed Income Portfolio
✓
✓
✓
CIBC Managed Income Plus Portfolio
✓
✓
✓
CIBC Managed Balanced Portfolio
✓
✓
CIBC Managed Monthly Income Balanced Portfolio
✓
CIBC Managed Balanced Growth Portfolio
✓
CIBC Managed Growth Portfolio CIBC Managed Aggressive Growth Portfolio
✓ ✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
CIBC U.S. Dollar Managed Income Portfolio
✓
✓
✓
CIBC U.S. Dollar Managed Balanced Portfolio
✓
✓
✓
✓
CIBC U.S. Dollar Managed Growth Portfolio
✓
✓
✓
✓
Notes to Financial Statements Each class of units may charge a different management fee. Operating expenses can be either common or class-specific. Class-specific expenses are allocated on a class-by-class basis. As a result, a separate net asset value per unit is calculated for each class. Class A units are available to all investors on a no-load basis with a minimum investment of $500. Class T4, Class T6, and Class T8 units have the same characteristics as Class A units, except that they each intend to pay a fixed distribution amount per unit, which also results in a separate net asset value per unit for each class, and may have different minimum investment requirements. Premium Class units are available to investors on a no-load basis with a minimum investment of $100,000 for CIBC Canadian T-Bill Fund, CIBC Money Market Fund, US$200,000 for and CIBC U.S. Dollar Money Market Fund and $50,000 for CIBC Canadian Bond Fund. Premium Class units also charge a lower management fee than Class A units. Class O units are only available to certain investors who have been approved by and have entered into a Class O account agreement with the Manager or whose dealer or discretionary manager offers separately managed accounts or similar programs and has entered into a Class O units account agreement with us. These investors are typically financial services companies, including the Manager, that use Class O units of the Funds to facilitate offering other products to investors. No management fees or operating expenses are charged to the Funds in respect of Class O units; instead, a negotiated management fee is charged by the Manager directly to, or as directed by, Class O unitholders or dealers and discretionary managers on behalf of unitholders. The date upon which each Fund was established by Declaration of Trust (Date Established) and the date upon which each class of units of each Fund was first sold to the public (Inception Date) are reported in footnote Organization of the Fund on the Statements of Net Assets. The Statement of Investment Portfolio of each of the Funds is as at December 31, 2010. The Statements of Net Assets of the Funds are as at December 31, 2010 and 2009 and the Statements of Operations and Statements of Changes in Net Assets of the Funds are for the years ended December 31, 2010 and 2009, except for Funds or classes established during either period, in which case the information presented is from the Date Established or the Inception Date to December 31, 2010 or December 31, 2009. 2. Summary of Significant Accounting Policies These financial statements, prepared in accordance with Canadian generally accepted accounting principles (GAAP), include estimates and assumptions made by management that affect the reported amounts of assets, liabilities, income, and expenses during the reporting periods. Actual results may differ from such estimates. a) Risk management The Funds’ overall risk management approach includes formal guidelines that govern the extent of exposure to various types of risk, including diversification within asset classes and limits on the exposure to individual investments and counterparties. In addition, derivative financial instruments may be used to manage certain risk exposures. The Manager also has various internal controls to oversee the Funds’ investment activities, including monitoring compliance with the investment objective and strategies, internal guidelines, and securities regulations. Please refer to each Fund’s Supplemental Schedule to Statement of Investment Portfolio for specific risk disclosures. Fair value of financial instruments by using valuation techniques The process of valuing investments for which no quoted market exists is inevitably based on inherent uncertainties and the resulting values may differ from values that would have been used had an active market existed for these investments. The valuation of such securities can be based on various valuation techniques that could include mathematical models, comparable valuation models, fundamental valuation models, or other techniques that would reflect the specific business situation or market the security operates within. The models would use observable market data as inputs where possible. However, in some instances, certain investments are fair valued based on assumptions that may not be supported by observable inputs. Securities without observable market value inputs in their valuation require judgment in establishing their fair value. Changes in any of these assumptions could affect the reported fair value of financial assets or financial liabilities. For Funds that hold Level 3 investments, a reconciliation from the beginning balances to ending balances is included in the Supplemental Schedule to Statement of Investment Portfolio. Level 3 investments are those that have inputs based on unobservable market data. In addition, the impact of using reasonable alternative assumptions for valuing Level 3 investments is disclosed. Credit risk Credit risk is the risk that a counterparty to a financial instrument, such as a fixed income security or a derivative contract, will fail to discharge an obligation or commitment that it has entered into with the Funds. The value of fixed income securities and derivatives as presented on the Statement of Investment Portfolio includes consideration of the creditworthiness of the issuer and, accordingly, represents the maximum credit risk exposure of the Funds. Certain Funds may invest in short-term fixed income securities issued or guaranteed primarily by the Government of Canada or any Canadian provincial government, obligations of Canadian chartered banks or trust companies, and commercial paper with approved credit ratings. The risk of default on these short-term fixed income securities is considered low and these securities primarily have credit ratings of ‘A-1 (Low)’ (as rated by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or equivalent rating from another rating service) or higher. Currency risk Currency risk is the risk that the value of an investment will fluctuate due to changes in foreign exchange rates. This is because mutual funds may invest in securities denominated or traded in currencies other than the Funds’ reporting currency. Interest rate risk Prices of fixed income securities generally increase when interest rates decline and decrease when interest rates rise. This risk is known as interest rate risk. Prices of longer-term fixed income securities will generally fluctuate more in response to interest rate changes than would shorter-term securities. Due to the nature of short-term fixed income securities with a remaining term-to-maturity of less than one year, these investments are not generally exposed to a significant risk that their value will fluctuate in response to changes in the prevailing levels of market interest rates. Liquidity risk The Funds are exposed to daily cash redemptions of redeemable units. The Funds retain sufficient cash and cash equivalent positions to maintain adequate liquidity. In accordance with securities regulations, the Funds are restricted from purchasing additional illiquid assets if, immediately after the purchase, more than 10% of Fund assets, based on market value at time of purchase, would consist of illiquid assets. Other price/market risk Other price/market risk is the risk that the value of investments will fluctuate as a result of changes in market conditions. Several factors can influence market trends, such as economic developments, changes in interest rates, political changes, and catastrophic events. All investments are exposed to other price/market risk. b) Investment Transactions, Income Recognition, and Recognition of Realized and Unrealized Gains and Losses i) Each transaction of purchase or sale of a portfolio asset by a Fund is reflected in the net assets no later than the first computation of net assets made after the date on which the transaction becomes binding upon the Fund. ii) Interest income is recorded on the accrual basis. iii) Dividend income is recorded on the ex-dividend date. iv) Securities that are exchange-traded are recorded at current value established by the closing bid price. Debt securities are recorded at current value, established by the closing bid price on the over-the-counter market (OTC). Unlisted securities are recorded at current value using fair valuation techniques established by the Manager in establishing a current value. v) Realized gains and losses on investments and unrealized appreciation or depreciation of investments are calculated using the average cost, excluding transaction costs, of the related investments. vi) Other income is the sum of income other than that which is separately classified on the Statements of Operations. c) Portfolio Securities The cost of securities of the Fund is determined in the following manner. Securities are purchased and sold at a market-traded price to arrive at a value for the position traded. The total purchased value represents the total cost of the security to the Fund. When additional units of the same security are purchased, the cost of those additional units is added to the total security cost. When units of the same security are sold, the proportionate cost of the units of the security sold is deducted from the total security cost. If there is a return of capital paid by a security, the amount of this return of capital is deducted from the total security cost. This method of tracking security cost is known as “average cost” and the current total for any one security is referred to as the “adjusted cost base” or “ACB” of the security. Transaction costs incurred in portfolio transactions are excluded from the average cost of investments and are recognized immediately in net income and are presented as a separate expense item on the financial statements.
Notes to Financial Statements The difference between the current value of securities and their average cost, excluding transaction costs, represents the unrealized appreciation (depreciation) in value of the portfolio investments. The applicable period change in unrealized appreciation (depreciation) of investments is included on the Statements of Operations. Short-term investments on the Statement of Investment Portfolio are presented at their current value. Accrued interest for bonds is disclosed separately on the Statements of Net Assets. d) Foreign Exchange The value of investments and other assets and liabilities denominated in foreign currencies is translated into Canadian dollars (except for CIBC U.S. Dollar Money Market Fund, CIBC U.S. Dollar Managed Income Portfolio, CIBC U.S. Dollar Managed Balanced Portfolio, and CIBC U.S. Dollar Managed Growth Portfolio, which are valued in U.S. dollars) at the current rates prevailing on each valuation date. Purchases and sales of investments, income, and expenses are translated into Canadian dollars (with the exception of the above mentioned Funds which are valued in U.S. dollars) at the foreign exchange rates prevailing on the dates of such transactions. Foreign currency translation gains (losses) on investments and income transactions are included in Net realized gain (loss) on foreign currency and in Income, respectively, on the Statements of Operations. e) Forward Foreign Currency Contracts The Funds may enter into forward foreign currency contracts for either hedging or non-hedging purposes where such activity is consistent with their investment objectives and as permitted by the Canadian securities regulatory authorities. Changes in the current value of forward foreign currency contracts are recorded as Unrealized gain or loss on forward foreign currency contracts on the Statements of Net Assets, and are recorded as an Increase (decrease) in unrealized appreciation (depreciation) of investments during the applicable period on the Statements of Operations. The gain or loss arising from the difference between the value of the original forward foreign currency contract and the contract at close or delivery is realized and recorded as Net realized gain or loss on foreign currency when the Fund uses the forward foreign currency contracts for hedging, or as Income (loss) from forward foreign currency contracts when the Fund does not use the forward foreign currency contracts for hedging. f) Futures Contracts The margin deposits with brokers relating to futures contracts are included in Margin on the Statements of Net Assets. Any change in the margin requirement is settled daily, and is included in Receivable for portfolio securities sold or Payable for portfolio securities purchased on the Statements of Net Assets. Any difference between the settlement value at the close of business on each valuation date and the settlement value at the close of business on the previous valuation date is recorded as Income (loss) from futures contracts on the Statements of Operations. g) Options Premiums paid for purchased call and put options are included in Investments at current value on the Statements of Net Assets. When a purchased option expires, the Fund will realize a loss in the amount of the cost of the option. For a closing transaction, the Fund will realize a gain or loss depending on whether the proceeds are greater or less than the premium paid at the time of purchase. When a purchased call option is exercised, the cost of the security purchased is increased by the premium paid at the time of purchase. Premiums received from writing options are included in Investments at current value on the Statements of Net Assets as initial reductions in the value of investments. Premiums received from writing options that expire unexercised are recorded as Income on the Statements of Operations. For a closing transaction, if the cost of closing the transaction exceeds the premium received, the Fund will record a realized loss, or if the premium received at the time the option was written is greater than the amount paid, the Fund will record a realized gain. If a written put option is exercised, the cost for the security delivered is reduced by the premiums received at the time the option was written. h) Securities Lending The Fund may lend portfolio securities in order to earn additional revenue, which is disclosed on the Statements of Operations. The loaned assets of any one Fund are not permitted to exceed 50% of the current value of the assets of that Fund (excluding collateral debt for the loaned securities). The minimum allowable collateral is 102% of the current value of the loaned securities as per the requirements of National Instrument 81-102 — Mutual Funds. Collateral can consist of the following: i) Cash. ii) An evidence of indebtedness that is issued or fully and unconditionally guaranteed as to the principal and interest by: a) the government of Canada, or a province or territory of Canada; b) the government of the United States of America or the government of one of the states of the United States of America; c) the government of another sovereign state, or a permitted supranational agency, if, in each case, the evidence of indebtedness has an approved credit rating; or d) a Canadian financial institution or a financial institution that is not incorporated or organized under the laws of Canada or of a province or territory of Canada, if, in either case, evidences of indebtedness of that issuer or guarantor that are rated as short-term debt by an approved credit rating organization have an approved credit rating. iii) Irrevocable letters of credit issued by a Canadian financial institution, if evidences of indebtedness of the Canadian financial institution that are rated as short-term debt by an approved credit rating organization have an approved credit rating. iv) Securities that are immediately convertible into securities of the same issuer, class, or type, and the same term, as the securities loaned. v) Commercial paper with a term-to-maturity of 365 days or less with an approved credit rating and that was issued by a company other than a government or permitted supranational agency. The market value of the loaned securities is determined on the close of any valuation date and any additional required collateral is delivered to the Fund on the next business day. The securities on loan continue to be included on the Statement of Investment Portfolio, and are included in the total value on the Statements of Net Assets in Investments at current value. Where applicable, a Fund’s securities lending transactions are reported in footnote Securities Lending on the Statements of Net Assets. i) Multi-Class Structured Funds Each Fund may issue an unlimited number of classes of units. The realized and unrealized capital gains or losses, income, and common expenses (other than class-specific operating expenses and management fees) of the Fund are allocated on each valuation date to the unitholders in proportion to the respective prior day’s net asset value, which includes unitholder trade(s) dated for that day, of each class at the date on which the allocation is made. All class-specific operating expenses and management fees do not require allocation. All class-specific operating expenses are paid by the Manager and are collected from the Funds on a recoverable basis. j) Other Assets and Liabilities Other assets and liabilities are recorded at cost, which approximates their current value. k) International Financial Reporting Standards In January 2011, the Accounting Standards Board (AcSB) amended the Introduction to Part I of the CICA Handbook — Accounting to allow investment companies, which include investment funds, to adopt International Financial Reporting Standards (IFRS) for the first time no later than interim and annual financial statements relating to annual periods beginning on or after January 1, 2013. Investment companies electing to defer the first time adoption may continue to apply existing Canadian GAAP until the changeover to IFRS. The Fund will defer the first time adoption and adopt IFRS beginning January 1, 2013. As at December 31, 2010, the Manager has developed a changeover plan to meet this timetable. The potential qualitative impact of the changeover to IFRS is currently expected to include the presentation of Statements of Cash Flows, starting with the 2013 financial statements with comparatives for 2012. There will also be additional changes to the Statements of Net Assets around the presentation of unitholders’ equity, and also the potential to consolidate investments where one fund holds a controlling position of another fund. Additional note disclosures as required will be added to support the new changes and comply with the increased disclosure requirements. Disclosures of the quantitative impact, if any, will be in the 2012 financial statements. Based on the Manager’s current understanding of the differences between Canadian GAAP and IFRS, the Manager does not expect an impact to net assets or net assets per unit from the changeover to IFRS.
Notes to Financial Statements l) Legend for Abbreviations The following is a list of abbreviations (foreign currency translation and others) that may be used in the Statement of Investment Portfolio: Currency Abbreviations ARS AUD BRL CAD CHF CLP CNY COP CZK DKK EUR GBP HKD HUF IDR ILS INR JPY
– – – – – – – – – – – – – – – – – –
Argentine Peso Australian Dollar Brazilian Real Canadian Dollar Swiss Franc Chilean Peso Chinese Renminbi Colombian Peso Czech Koruna Danish Krone Euro British Pound Hong Kong Dollar Hungarian Forint Indonesian Rupiah Israeli New Shekel Indian Rupee Japanese Yen
KRW – MXN – MYR – NOK – NZD – PEN – PHP – PLN – RUB – SEK – SGD – THB – TRY – TWD – USD – ZAR –
South Korean Won Mexican Peso Malaysian Ringgit Norwegian Krone New Zealand Dollar Peruvian Nuevo Sol Philippine Peso Polish Zloty Russian Ruble Swedish Krona Singapore Dollar Thai Baht New Turkish Lira Taiwan Dollar United States Dollar South African Rand
Other Abbreviations ADR CVO ETF GDR NVDR
– – – – –
American Depositary Receipt Contingent Value Obligations Exchange-Traded Fund Global Depositary Receipt Securities Non-Voting Depository Receipt
3. Valuation of Investments The valuation date (Valuation Date) for a Fund is any day the when the Manager’s head office is open for business. The Trustee may, at its discretion, establish other Valuation Dates. The value of the investments or assets of a Fund is determined as follows: a) Cash and Other Assets Cash, accounts receivable, dividends receivable, distributions receivable, and accrued interest are valued at current value or at their recorded cost, plus or minus any foreign exchange between recognition of the asset by the Fund and the current Valuation Date, which approximates current value. Short-term investments (money market instruments) are valued at current value. b) Bonds, Debentures, and Other Debt Obligations Bonds, debentures, and other debt obligations are valued at current value using the bid price provided by a recognized vendor upon the close of trading on a Valuation Date. c) Listed Securities, Unlisted Securities, and Fair Value Pricing of Foreign Securities Any security that is listed or traded on a securities exchange is valued at current value using the closing bid price or, if there is no closing bid price on that exchange, and in the case of securities traded on an OTC market, at the current value as determined by the Manager as an appropriate basis for valuation. In such situations, a fair value will be determined by the Manager to establish current value. If any securities are inter-listed or traded on more than one exchange or market, the Manager will use the principal exchange or market for the current value of such securities. Units of each mutual fund in which a Fund invests will be valued at current value using the most recent net asset value quoted by the Trustee or Manager of the mutual fund on the Valuation Date. Unlisted securities are valued at current value using the bid price quoted by a recognized dealer, or the Manager may determine a price that more accurately reflects the fair value of these securities if the Manager feels the bid price does not reflect current value. Fair value pricing is designed to avoid stale prices and to provide a more accurate current value, and may assist in the deterrence of harmful short-term or excessive trading in the Fund. When securities listed or traded on markets or exchanges that close prior to North or South American markets or exchanges are valued by the Manager at their fair market value, instead of using quoted or published prices, the prices of such securities used to calculate the Fund’s net assets or net asset value may differ from quoted or published prices of such securities. d) Derivatives Long positions in options, debt-like securities, and listed warrants are valued at current value using the closing bid price as established on either their principal trading exchange or by a recognized dealer in such securities. The credit rating of each counterparty (as rated by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.) meet or exceeds the minimum approved credit rating. When any option is written by any Fund, the premium received by the Fund will be reflected as a liability that will be valued at an amount equal to the current market value of the option that would have the effect of closing the position. Any difference resulting from revaluation shall be treated as an unrealized gain or loss on investment; the liability shall be deducted in arriving at the net assets of the Fund. The securities that are the subject of a written option, if any, will be valued in the manner described above for listed securities. Futures contracts, forward contracts, or swaps will be valued at current value of the gain or loss, if any, that would be realized on the Valuation Date if the position in the futures contracts, forward contracts, or swaps were to be closed out. Margin paid or deposited in respect of futures contracts and forward contracts will be reflected as an account receivable and margin consisting of assets other than cash will be noted as held as collateral. Other derivatives and margin are valued at current value in a manner that the Manager determines to represent their current value. e) Restricted Securities Restricted securities purchased by any Fund will be valued at current value in a manner that the Manager determines to represent their current value. f) Other Investments All other investments of the Funds will be valued at current value in accordance with the laws of the Canadian securities regulatory authorities where applicable. The value of any security or other property of a Fund for which a market quotation is not readily available or where the market quotations do not properly reflect the current value of such securities will be determined by the Manager by valuing the securities at their current value. In such situations, current value will be determined using fair valuation techniques that most accurately reflect their fair value as established by the Manager. 4. Units Issued and Outstanding Each Fund has an unlimited number of classes of units and may issue an unlimited number of units of each class. The outstanding units represent the capital of a Fund. Each unit has no par value and the value of each unit is the net asset value next determined. Settlement of the cost for units issued is completed as per security regulations in place at the time of issue. Distributions made by a Fund, and reinvested by unitholders in additional units also constitute issued capital of the Funds.
Notes to Financial Statements Units are redeemed at the net asset value per unit of a Fund. A right to redeem units of a Fund may be suspended with the approval of the Canadian securities regulatory authorities or when normal trading is suspended on a stock, options, or futures exchange in Canada or outside of Canada on which securities or derivatives that make up more than 50% of the value or underlying exposure of the total assets of a Fund, not including any liabilities of a Fund, are traded and when those securities or derivatives are not traded on any other exchange that represents a reasonably practical alternative for a Fund. The Funds are not subject to any externally imposed capital requirements. The capital received by a Fund is utilized within the respective investment mandate of a Fund. This includes for all Funds the ability to make liquidity available to satisfy unitholder unit redemption requirements upon unitholder request. Changes in issued and outstanding units for the periods ended December 31, 2010 and 2009 can be found on the Statements of Changes in Net Assets. 5. Management Fees and Operating Expenses Management fees are based on the net asset value of the Funds, and are calculated daily. Management fees are paid to the Manager in consideration for providing, or arranging for the provision of, management, distribution, and portfolio advisory services. The maximum annual management fee expressed as a percentage of the average net asset value for each class of units of the Fund is reported in footnote Maximum Chargeable Management Fee Rates on the Statements of Operations. For Class O units, management fees are negotiated with and paid by, or as directed by, unitholders or dealers and discretionary managers on behalf of unitholders. In addition to the management fees, the Funds are responsible for all expenses relating to the operation and conduct of the business of the Funds, including interest, operating, and administrative costs (other than advertising and promotional expenses, which are the responsibility of the Manager), brokerage fees, commissions, spreads, regulatory fees, Independent Review Committee fees, taxes, audit and legal fees and expenses, safekeeping and custodial fees, investor servicing costs, and costs of unitholder reports, prospectuses, and other reports. All such operating expenses are paid by the Manager and recovered from the Funds. The Funds do not pay a fee to the Trustee. The Manager may recover less than the actual operating expenses paid by the Manager from a Fund, resulting in the Manager absorbing expenses. The Manager may also charge less than the maximum management fee in footnote Maximum Chargeable Management Fee Rates on the Statements of Operations, resulting in the Manager waiving management fees. At its sole discretion, the Manager may stop absorbing operating expenses and/or waiving management fees at any time. Operating expenses absorbed and/or management fees waived by the Manager are disclosed on the Statements of Operations. In some cases, the Manager may charge management fees to an investor that are less than the management fees the Manager is entitled to charge in respect of certain investors in a Fund. The difference in the amount of the management fees will be paid out by the Fund to the applicable investors as a distribution of additional units of the Fund (Management Fee Distributions). Management Fee Distributions are negotiable between the Manager and the investor and are dependent primarily on the size of the investor’s investment in the Fund. Management Fee Distributions paid to qualified investors do not adversely impact the Fund or any of the Fund’s other investors. The Manager may increase or decrease the amount of Management Fee Distributions to certain investors from time to time. Certain Funds may invest in units of other Funds (the Underlying Funds). Where a Fund invests in units of an Underlying Fund, the Fund does not pay duplicate management fees on the portion of its assets that it invests in units of the Underlying Fund. In addition, the Fund will not pay duplicate sales fees or redemption fees with respect to the purchase or redemption by it of units of the Underlying Fund. Some of the Underlying Funds held by the Funds may offer Management Fee Distributions. Such Management Fee Distributions of an Underlying Fund will be paid out as required for taxable distribution payments by a Fund. The manager of an Underlying Fund may, in some cases, waive a portion of an Underlying Fund’s management fee and/or absorb a portion of an Underlying Fund’s operating expenses. 6. Income Taxes The Funds qualify as mutual fund trusts under the Income Tax Act (Canada). No income tax is payable by the Funds on net income and/or net realized capital gains that are distributed to unitholders. In addition, income taxes payable on undistributed net realized capital gains are refundable on a formula basis when units of the Funds are redeemed. Sufficient net income and realized capital gains of the Funds have been, or will be, distributed to the unitholders such that no tax is payable by the Funds and accordingly, no provision for income taxes has been made in the financial statements. Occasionally, a Fund may pay distributions in excess of net income and net realized capital gains of the Fund. This excess distribution is called a return of capital and is nontaxable to the unitholder. However, a return of capital reduces the average cost of the unitholder’s units for tax purposes, which may result in a capital gain to the unitholder to the extent the average cost becomes less than zero. CIBC U.S. Dollar Money Market Fund, CIBC U.S. Dollar Managed Income Portfolio, CIBC U.S. Dollar Managed Balanced Portfolio, and CIBC U.S. Dollar Managed Growth Portfolio may realize net foreign currency gains and losses on the translation of their net realized capital gains to Canadian dollars for tax purposes. These gains will be distributed to investors annually unless these Funds elect to retain them, with the result that the tax would be payable by the Funds. Non-capital losses that arose in taxation years before 2004 are available to be carried forward for seven years and applied against future taxable income. Non-capital losses that arose in 2004 and 2005 are available to be carried forward for 10 years. Non-capital losses that arose in 2006 and after are available to be carried forward for 20 years. Capital losses for income tax purposes may be carried forward indefinitely and applied against capital gains realized in future years. Where applicable, a Fund’s capital and non-capital losses are reported in footnote Capital and Non-Capital Losses on the Statements of Changes in Net Assets. The Funds have a taxation year-end of December 15 (except for CIBC Canadian T-Bill Fund, CIBC Money Market Fund, CIBC U.S. Dollar Money Market Fund, CIBC Managed Income Portfolio, CIBC Managed Income Plus Portfolio, CIBC Managed Balanced Portfolio, CIBC Managed Monthly Income Balanced Portfolio, CIBC Managed Balanced Growth Portfolio, CIBC Managed Growth Portfolio, CIBC Managed Aggressive Growth Portfolio, CIBC U.S. Dollar Managed Income Portfolio, CIBC U.S. Dollar Managed Balanced Portfolio, and CIBC U.S. Dollar Managed Growth Portfolio, which have a taxation year-end of December 31). 7. Brokerage Commissions and Fees The total commissions paid by the Funds to brokers in connection with portfolio transactions are reported in footnote Brokerage Commissions and Fees on the Statement of Operations of each Fund. In allocating brokerage business to a dealer, consideration may be given by the portfolio sub-advisors of the Funds for the provision of goods and services by dealer or a third party, other than order execution (referred to in the industry as “soft dollar” arrangements). These goods and services are paid for with a portion of brokerage commissions and assist the portfolio sub-advisor with their investment decision-making services to the Funds or relate directly to executing portfolio transactions on behalf of the Funds. The total soft dollar payments paid by the Funds to brokers is reported in footnote Brokerage Commissions and Fees on the Statements of Operations of each Fund. In addition, the Manager may enter into commission recapture arrangements with certain dealers with respect to the Fund. Any commission recaptured will be paid to the applicable Fund. Fixed income and certain other securities are transacted in an OTC market, where participants are dealing as principals. Such securities are generally traded on a net basis and do not normally involve brokerage commissions, but will typically include a “spread” (being the difference between the bid and the offer prices on the security of the applicable marketplace). Spreads associated with fixed income securities trading and certain other securities are not ascertainable and, for that reason, are not included in the dollar amounts. In addition, the soft dollar amounts only include the value of research and other services supplied by a third party to the portfolio sub-advisors, as the value of the services supplied to the portfolio sub-advisors by the dealer is not ascertainable. When these services benefit more than one Fund, the costs are allocated among the Funds based on transaction activity or some other fair basis as determined by the portfolio sub-advisors. 8. Related Party Transactions CIBC and its affiliates have the following roles and responsibilities with respect to the Funds and receive the fees described below in connection with their roles and responsibilities. The Funds may hold securities of CIBC. CIBC and its affiliates may also be involved in underwriting or lending to issuers that may be held by the Funds, have purchased or sold securities from or to the Funds while acting as principal, have purchased or sold securities from or to the Funds on behalf of another investment fund managed by CIBC or an affiliate, or have been involved as a counterparty to derivative transactions. Management fees payable and other accrued expenses on the Statements of Net Assets are amounts generally payable to a related party of the Fund. Manager, Trustee, Portfolio Advisor, and Portfolio Sub-Advisor of the Funds CIBC is the Manager, CIBC Trust Corporation is the Trustee, and CIBC Asset Management Inc. is the portfolio advisor (the Portfolio Advisor) of each of the Funds. CIBC Global Asset Management (CIBC Global) is the portfolio sub-advisor of certain of the Funds. The Manager also arranges for Fund administrative services (other than advertising and promotional, which are the responsibility of the Manager), legal, investor servicing, and costs of unitholder reports, prospectuses, and other reports. The Manager is the registrar and transfer agent for the Funds and provides, or arranges for the provision of, all other administrative services required by the Funds. The dollar amount (including all applicable taxes) of all fund administrative expenses (net of absorptions) that the Manager recovers from the Fund is reported in footnote Administrative and Other Fund Operating Expenses on the Statements of Operations.
Notes to Financial Statements Brokerage Arrangements and Soft Dollars Portfolio sub-advisors make decisions, including the selection of markets and dealers and the negotiation of commissions, with respect to the purchase and sale of portfolio securities, certain derivative products (including futures), and the execution of portfolio transactions. Brokerage business may be allocated by portfolio sub-advisors, including CIBC Global Asset Management Inc. (CIBC Global), to CIBC World Markets Inc. and CIBC World Markets Corp., each a subsidiary of CIBC. The total commissions paid to related brokers in connection with portfolio transactions are reported in footnote Brokerage Commissions and Fees on the Statements of Operations of each Fund. CIBC World Markets Inc. and CIBC World Markets Corp. may also earn spreads on the sale of fixed income, other securities, and certain derivative products (including forwards) to the Funds. Dealers, including CIBC World Markets Inc. and CIBC World Markets Corp., may furnish goods and services, other than order execution, to portfolio sub-advisors, including CIBC Global, that process trades through them (referred to in the industry as “soft dollar” arrangements). These goods and services are paid for with a portion of brokerage commissions and assist the portfolio sub-advisors with their investment decision-making services to the Fund or relate directly to executing portfolio transactions on behalf of the Fund. As per the terms of the portfolio sub-advisory agreements, such soft dollar arrangements are in compliance with applicable laws. The Portfolio Advisor has entered into an expense reimbursement agreement with CIBC Global on behalf of the Funds sub-advised by CIBC Global. The agreement provides that custodial fees directly related to portfolio transactions incurred by a Fund, otherwise payable by the Fund, shall be paid by CIBC Global, and/or dealer(s) directed by CIBC Global, up to the amount of the credits generated under soft dollar arrangements from trading on behalf of the Fund, or portion of the Fund, during that month. The total soft dollar payments paid by the Fund to related brokers are reported in footnote Brokerage Commissions and Fees on the Statements of Operations of each Fund. In addition, the Manager may enter into commission recapture arrangements with certain dealers with respect to the Funds. Any commission recaptured will be paid to the applicable Fund. Spreads associated with fixed income, other securities, and certain derivative products (including forwards) are not ascertainable and, for that reason, are not included in the dollar values. In addition, the soft dollar amounts only include the value of research and other services supplied by a third party to the portfolio sub-advisors, as the value of the services supplied to the portfolio sub-advisors by the dealer is not ascertainable. When these services benefit more than one Fund, the costs are allocated among the Funds based on transaction activity or some other fair basis as determined by the portfolio sub-advisors. Custodian The custodian holds all cash and securities for the Funds and ensures that those assets are kept separate from any other cash or securities that the custodian might be holding. CIBC Mellon Trust Company is the custodian of the Funds (the Custodian). The Custodian may hire sub-custodians for the Funds. The fees for services of the Custodian directly related to the execution of portfolio transactions by a Fund, or a portion of a Fund, for which CIBC Global acts as portfolio sub-advisor are paid by CIBC Global and/or dealer(s) directed by CIBC Global up to the amount of the credits generated under soft dollar arrangements from trading on behalf of the Fund during that month. All other fees for the services of the Custodian are paid by the Manager, and charged to the Funds on a recoverable basis. CIBC owns a 50% interest in CIBC Mellon Trust Company. Service Provider CIBC Mellon Global Securities Services Company (CIBC GSS) provides certain services to the Funds, including securities lending, fund accounting and reporting, and portfolio valuation. Such servicing fees are paid by the Manager and charged to the Pools on a recoverable basis. CIBC indirectly owns a 50% interest in CIBC GSS. The dollar amount paid by the Funds (including all applicable taxes) to CIBC Mellon Trust Company for custodial fees (net of absorptions) and to CIBC GSS for securities lending, fund accounting and reporting, and portfolio valuation (net of absorptions) for the periods ended December 31, 2010 and 2009 is reported in footnote Service Provider on the Statements of Operations. 9. Hedging Certain foreign currency denominated positions have been hedged, or partially hedged, by forward foreign currency contracts as part of the investment strategies of certain Funds. These hedges are indicated by a hedging reference number on the Statement of Investment Portfolio and a corresponding hedging reference number on the Forward Foreign Currency Contracts Schedule for those Funds. 10. Collateral on Specified Derivatives Short-term investments may be used as collateral for futures contracts outstanding with brokers. 11. Reconciliation of Net Assets Per Unit and Net Asset Value Per Unit The application of CICA Handbook Section 3855 — Financial Instruments — Recognition and Measurement may result in a different value of securities held by a Fund for financial reporting purposes (defined as Net Assets when referring to a Fund or Net Assets per Unit when on a per unit basis) than the value used for pricing unitholder transactions (defined as Net Asset Value when referring to a Fund or Net Asset Value per Unit when on a per unit basis). See footnote Reconciliation of Net Assets per Unit reported on the Statements of Net Assets. 12. Comparative Figures To conform to the presentation adopted in the current period, certain amounts from the prior period have been reclassified.
Independent Auditors’ Report To the Unitholders of CIBC Canadian T-Bill Fund CIBC Money Market Fund CIBC U.S. Dollar Money Market Fund CIBC Short-Term Income Fund CIBC Canadian Bond Fund CIBC Monthly Income Fund CIBC Global Bond Fund CIBC Global Monthly Income Fund CIBC Balanced Fund CIBC Dividend Income Fund CIBC Dividend Growth Fund CIBC Canadian Equity Fund CIBC Canadian Equity Value Fund CIBC Canadian Small-Cap Fund CIBC Disciplined U.S. Equity Fund CIBC U.S. Small Companies Fund CIBC Global Equity Fund CIBC Disciplined International Equity Fund CIBC European Equity Fund CIBC Emerging Markets Fund CIBC Asia Pacific Fund CIBC Latin American Fund CIBC International Small Companies Fund CIBC Financial Companies Fund CIBC Canadian Resources Fund CIBC Energy Fund
CIBC Canadian Real Estate Fund CIBC Precious Metals Fund CIBC Global Technology Fund CIBC Canadian Short-Term Bond Index Fund CIBC Canadian Bond Index Fund CIBC Global Bond Index Fund CIBC Balanced Index Fund CIBC Canadian Index Fund CIBC U.S. Broad Market Index Fund CIBC U.S. Index Fund CIBC International Index Fund CIBC European Index Fund CIBC Emerging Markets Index Fund CIBC Asia Pacific Index Fund CIBC Nasdaq Index Fund CIBC Managed Income Portfolio CIBC Managed Income Plus Portfolio CIBC Managed Balanced Portfolio CIBC Managed Monthly Income Balanced Portfolio CIBC Managed Balanced Growth Portfolio CIBC Managed Growth Portfolio CIBC Managed Aggressive Growth Portfolio CIBC U.S. Dollar Managed Income Portfolio CIBC U.S. Dollar Managed Balanced Portfolio CIBC U.S. Dollar Managed Growth Portfolio
(collectively, the “Funds”)
We have audited the accompanying financial statements which comprise the Statement of Investment Portfolio of each of the Funds as at December 31, 2010, the Statements of Net Assets as at December 31, 2010 and 2009, and the Statements of Operations and Changes in Net Assets for the years then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as at December 31, 2010 and 2009, and the results of each of their operations and each of their changes in net assets for the years then ended in accordance with Canadian generally accepted accounting principles.
Toronto, Canada March 8, 2011
Chartered Accountants Licensed Public Accountants
CIBC Mutual Funds CIBC Family of Managed Portfolios
CIBC 5650 Yonge Street, 20th Floor Toronto, Ontario M2M 4G3
CIBC Securities Inc. 1-888-465-3863
Website www.cibc.com/mutualfunds
CIBC Securities Inc. is a wholly-owned subsidiary of CIBC and is the principal distributor of the CIBC Mutual Funds and the CIBC Family of Managed Portfolios. CIBC Family of Managed Portfolios are mutual funds that primarily invest in other CIBC Mutual Funds. To obtain a copy of the prospectus, call CIBC Securities Inc. at 1-800-465-3863 or ask your advisor. The CIBC logo and “CIBC For what matters.” are registered trademarks of CIBC.
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