IFIC INDUSTRY OVERVIEW September 2016

Data for the report was comprised of data from the following companies who report to IFIC: AGF Investments Inc. ATB Investment Management Inc. BlackRock Asset Management Canada Ltd. BMO Financial Group 6 Bridgehouse Asset Managers Bullion Management Group Inc. Caldwell Investment Management Ltd. Canoe Financial 4 Capital International Asset Management (Canada) Inc. CIBC Asset Management Counsel Portfolio Services Inc. Educators Financial Group Inc. Fidelity Investments Canada ULC Fiera Capital Fonds Desjardins Franklin Templeton Foresters Financial Investment Management Gestion Férique HSBC Global Asset Management (Canada) Limited IA Clarington Investments Investors Group Inc. Mackenzie Financial Corporation

Manulife Mutual Funds MD Management Limited OceanRock Investments National Bank Securities NGAM Canada L.P. Norrep Funds Northwest & Ethical Investments L.P. 5 PIMCO Canada Corp. RBC Global Asset Management Russell Investment Group 2 Scotia Global Asset Management Sentry Investments Stone & Co. Limited Tangerine Investment Funds TD Asset Management Tradex Management Inc.

and from the following companies providing data to, or estimated by, Investor Economics1: A.P.M. Acker Finley Aston Hill Asset Management Barreau du Quebec Beutel Goodman BluMont Capital Brigata Capital International Castlerock Investments CC&L Managed Portfolios Chou Associates CI Investments Cormel Creststreet Asset Management Dimensional Fund Advisors Canada EdgePoint Excel Funds Management Inc. First Asset FMOQ Friedberg Front Street Capital frontierAlt Fund Management Galileo Funds

1

Gatehouse Capital GBC Goodwood Highstreet I.A. Michael ING Direct Asset Management Integra Capital Invesco Trimark JovFunds Leith Wheeler Lincluden Matrix Asset Management Inc. Middlefield Montrusco Bolton OceanRock Investments PenderFund Capital Mgmt. PIMCO Canada Pro-Financial Prosperata QE Funds Quebec Professionals REA Redwood Ridgewood Capital Asset

Management ROI Fund Sceptre SEI Investments Canada Sprott Steadyhand 3 Sun Life Global Investments Universal Savings Fund Mgmt. Value Partners Vertex One Asset Management Webb Asset Management

Investor Economics provides the aggregated totals used in this file. Data is compiled from IFIC and other sources to comprehensively reflect the size and activity of the Canadian Retail Mutual Fund Industry. 2 Scotia Asset Management has changed its name to Scotia Global Asset Management and now encompasses all Dynamic Mutual Funds. (Aug 2012) 3 Capital International Asset Management (Canada), Inc. began providing data to IFIC as of March 2013 4 PIMCO Canada Corp. began providing data to IFIC as of June 2013 5 Brandes Investment Partners has changed its name to Bridgehouse Asset Management as of June 2013 6 Fiera Capital began reporting in July 2014

Table of Contents Table of Contents ........................................................................................................................................ 3 Highlights ..................................................................................................................................................... 4 Top Line Metrics ..............................................................................................Error! Bookmark not defined. Glossary of Terms ....................................................................................................................................... 6

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IFIC Industry Overview | September 2016

Highlights Overall Results for September 2016 »

Industry net sales for September 2016 were $1.89 billion and year-to-date net sales were $21.9 billion.

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Long-term funds’ net sales were $1.92 billion and year-to-date net sales were $24.7 billion.

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Money Market funds’ net redemptions were $25.8 million and year-to-date net redemptions were $846.8 million.

Results by Broad Asset Class for September 2016 

Balanced funds’ net sales in September 2016 totalled $2.28 billion compared to net sales of $2.36 billion last month. Year-to-date net sales for balanced funds totalled $21.1 billion compared to net sales of $40.2 billion for the same period last year.

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Bond funds’ net sales in September 2016 totalled $1.00 billion compared to net sales of $0.9 billion last month. Year-to-date net sales for bond funds totalled $6.85 billion compared to net sales of $2.84 billion for the same period last year.

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Equity funds’ net redemptions in September 2016 totalled $1.33 billion compared to net redemptions of $0.51 billion last month. Year-to-date net redemptions for equity funds totalled $3.51 billion compared to net sales of $4.30 billion for the same period last year.

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IFIC Industry Overview | September 2016

Top Line Metrics Net Assets Sep 2016

Net Sales

Beginning of Aug 2016 Sep 2015 Year

Sep 2016

Aug 2016

Sep 2015

Stand-Alone vs. Fund-of-Funds

$Billions

Fund-of-Funds

YTD 2015

Last 12 Months

12 Months ending Sep 2015

Stand-Alone vs. Fund-of-Funds

882.1

879.5

839.2

819.6

-844.3

-160.7

-335.8

437.5

433.2

391.9

374.1

2,734.1

2,858.4

2,523.3

Broad Asset Classes Equity Funds

421.2

420.2

394.7

379.6

Balanced Funds

687.4

680.0

633.4

615.1

Bond Funds

174.4

173.2

153.2

Specialty Funds

12.4

12.5

Long-Term Funds Total

1295.5

1288.5

$Millions

Stand-Alone Funds

YTD

-4,716.4

10,039.2

-5,994.8

9,691.7

28,542.4

39,763.6

37,930.0

48,047.1

Broad Asset Classes -1,331.0

-513.5

276.8

-3,508.9

4,304.2

-2,503.9

3,785.7

2,279.1

2,357.8

1,823.6

21,172.3

40,155.9

28,107.8

48,763.2

149.8

1,000.9

899.3

-81.7

6,851.8

2,843.1

6,760.0

3,416.1

24.6

24.0

-28.4

-33.8

198.2

157.5

2,864.7

454.1

3,249.3

1206.0

1168.6

1,915.6

2,702.3

2,217.0

24,672.7

50,167.8

32,817.9

59,214.2

Short-Term Funds

24.2

24.2

25.2

25.1

-25.8

-4.6

-29.5

-846.8

-365.1

-882.8

-1,475.5

Total Industry

1319.6

1312.7

1231.1

1193.7

1,889.8

2,697.7

2,187.6

23,826.0

49,802.8

31,935.2

57,738.7

Total mutual fund assets under management (AUM) for September 2016 were $1,320 billion, compared to $1,313 billion in the previous month; an increase of $7 billion, or 0.53%. Since September 2015, total mutual fund assets have increased by $125.9 billion or 10.55%. Total net sales for September were $1.89 billion, and were down compared to net sales of $2.70 billion for the previous month, and were lower compared to net sales of $2.19 billion last August. Long-term fund net sales totalled $1.92 billion in September, and over the last 12 months ending September 2016 totalled $32.82 billion. Money Market fund net redemptions in September were $25.8 million. Over the last 12 months, Money Market fund net redemptions totalled $0.88 billion. Balanced funds’ net sales in September 2016 totalled $2.28 billion compared to net sales of $2.36 billion last month. Bond funds’ net sales in September 2016 totalled $1.00 billion compared to net sales of $0.90 billion last month. Equity funds’ net redemptions in September 2016 totalled $1.33 billion compared to net redemptions of $0.51 billion last month.

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IFIC Industry Overview | September 2016

Glossary of Terms Asset Class Refers to a broadly defined set of assets, grouped together by similar characteristics within CIFSC categories. An example of an asset class is Domestic Equity, which comprises the CIFSC categories of Canadian Equity, Canadian Focused and Canadian Small Cap (including others). CIFSC Categories Refers to a one or more of the investment fund categories established and maintained by the Canadian Investment Funds Standards Committee based on established criteria as defined from time to time. Definitions for each of the CIFSC Categories, and a list of funds included within each category, can be viewed at www.cifsc.org. Long-term funds All funds excluding money market funds Short-term funds Money Market funds Net sales Shown in this report do not include reinvested distributions and are calculated as: x = gross sales – redemptions + transfers in – transfers out. % Change The total percentage change over the period specified. For example, the year-over-year (% change) is the answer to the following equation: x = 100 x [(Current Assets/ Assets previous year same month) – 1] Cumulative (as used in Long-Term Funds Overview) The total net sales or market effect amount over the period specified.

Fund-of-Fund (Fund Wrap) A mutual fund product or program that is set up to purchase other mutual funds rather than invest directly in underlying securities. It is usually marketed as a ‘total solution’ product. Both the fund selection and the asset allocation decisions are often made by the fund manager however these decisions can be made by the investor depending on the level of customization available in the program. The investor may own the underlying funds directly or may only own the ‘top’ fund.

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IFIC Industry Overview | September 2016

ABC Fund-of-Fund (Top Fund)

ABC Mutual Fund A (Underlying Fund)

ABC Mutual Fund B (Underlying Fund)

ABC Mutual Fund C (Underlying Fund)

Proprietary Fund-of-Fund Fund-of-funds that are only invested in underlying mutual funds offered by the same fund company as the top fund. Example, an ABC fund-of-fund invested in ABC underlying funds only. 3rd Party Fund-of-Fund Fund-of-funds that invest in underlying mutual funds offered by a different fund company than the top fund. Example, an ABC fund-of-fund invested in XYZ underlying funds. Proprietary & 3rd Party Fund-of-Fund (Mixed Fund-of-Fund) Fund-of-funds that invest in underlying mutual funds offered by both the same company as the top fund and also by fund companies that are different from the top fund. Example, an ABC fund-of-fund invested in ABC underlying funds and XYZ underlying funds.

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IFIC Industry Overview | September 2016

IFIC Statistics Department Mo Rahmani Senior Research & Statistics Analyst Email: [email protected] Ph: (416) 309-2326 Ji Qi Research & Statistics Analyst Email: [email protected] Ph: (416) 309-2302

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IFIC Industry Overview | September 2016