financial information as of december 31, 2016 · 2017. 7. 11. · desjardins insurance refers to...

DFS GUARANTEED INVESTMENT FUNDS

Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.

Financial Information as of December 31, 2016

2016 Annual Report

MAY 2017

DFS Guaranteed Investment Funds are established by Desjardins Financial Security Life Assurance Company.

1DFS GUARANTEED INVESTMENT FUNDS

What’s a DFS GIF?

DFS stands for Desjardins Financial Security.

GIF stands for Guaranteed Investment Fund.

A Guaranteed Investment Fund (GIF), commonly known as “segregated fund“ is an investment fund created and issued exclusively by life insurance companies. It is offered through Contracts which provide maturity and death benefit guarantees.

Is this document available online?

Yes, at desjardinslifeinsurance.com/ GIFreports.

Is it possible to opt out of receiving paper copies of this financial report?

Yes. Please send a letter to:

Desjardins Financial Security GIF Administration 1 Complexe Desjardins P.O. Box 9000 Montreal, QC H5B 1H5

Or send an email to:

[email protected].

Please include your name, mailing address, telephone number, email address and client number in your request, and indicate whether your request applies to the annual financial report and/or the semi- annual financial report.

TABLE OF CONTENTS


Investment SolutionsDFS GIF – Conservative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4DFS GIF – Moderate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12DFS GIF – Balanced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20DFS GIF – Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28DFS GIF – Maximum Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Individual FundsIncome

DFS GIF – Money Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46DFS GIF – Income – Fiera Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53DFS GIF – Canadian Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Balanced and Asset AllocationDFS GIF – Diversified Income – Franklin Quotential . . . . . . . . . . . . . . . . . . . . . . . 72DFS GIF – Balanced Income – Franklin Quotential . . . . . . . . . . . . . . . . . . . . . . . . 79DFS GIF – Canadian Balanced – Fidelity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86DFS GIF – U .S . Monthly Income – Fidelity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93DFS GIF – Balanced – Desjardins Societerra . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100DFS GIF – Global Balanced – Jarislowsky Fraser . . . . . . . . . . . . . . . . . . . . . . . . . 107DFS GIF – Canadian Balanced – Fiera Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 114DFS GIF – Canadian Balanced – Franklin Bissett . . . . . . . . . . . . . . . . . . . . . . . . . 129DFS GIF – Balanced Growth – Franklin Quotential . . . . . . . . . . . . . . . . . . . . . . . 136DFS GIF – Canadian Balanced – CI Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . 143DFS GIF – Income And Growth – CI Signature . . . . . . . . . . . . . . . . . . . . . . . . . . 150DFS GIF – Growth And Income – NEI Northwest . . . . . . . . . . . . . . . . . . . . . . . . 157DFS GIF – Global Growth – NEI Select . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164DFS GIF – Canadian Asset Allocation – CI Cambridge . . . . . . . . . . . . . . . . . . . . 171DFS GIF – Growth – Franklin Quotential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

Canadian EquityDFS GIF – Dividend Income – Franklin Bissett . . . . . . . . . . . . . . . . . . . . . . . . . . 185DFS GIF – Canadian Dividend – NEI Northwest . . . . . . . . . . . . . . . . . . . . . . . . . 192DFS GIF – Canadian Equity – Jarislowsky Fraser . . . . . . . . . . . . . . . . . . . . . . . . . 199DFS GIF – Canadian Equity – Fidelity True North® . . . . . . . . . . . . . . . . . . . . . . . 206DFS GIF – Canadian Equity – Franklin Bissett . . . . . . . . . . . . . . . . . . . . . . . . . . . 213DFS GIF – Specialty Equity – NEI Northwest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220DFS GIF – Small Cap – Franklin Bissett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227

Foreign EquityDFS GIF – American Equity – MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234DFS GIF – American Equity Value – Desjardins . . . . . . . . . . . . . . . . . . . . . . . . . . 241DFS GIF – Global Dividend – Desjardins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248DFS GIF – Global Equity – MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255DFS GIF – International Equity – MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262DFS GIF – International Equity Growth – Desjardins . . . . . . . . . . . . . . . . . . . . . . 269

NOTES TO THE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276INDEPENDENT AUDITOR’S REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING IN THE AUDITED ANNUAL FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295

Investment Solutions


4 DFS GUARANTEED INVESTMENT FUNDS

DFS GIF – CONSERVATIVE*

* This Fund is composed of units of the corresponding underlying investment funds.

SUMMARY FACTS STATEMENT — unaudited

The following unaudited section shows the Top holdings of the Fund and performance data for the year ending December 31, 2016 . The current objective and strategy of the Fund can be found in the audited Financial Instruments Disclosures as at December 31, 2016 section of this document under the section heading “Strategy in using Financial Instruments” .For a detailed description of each Fund’s investment policy and where applicable, the investment policy and/or prospectus and financial statements of the underlying fund(s) is available upon request by writing to the Company at 1 Complexe Desjardins, P .O . Box 9000, Montreal, Quebec, H5B 1H5 .

TOP MAJOR HOLDINGS AS OF DECEMBER 31, 2016

Security Name Percentage of Portfolio

DGIA Canadian Bond Fund 55 .5%Desjardins Enhanced Bond Fund 23 .7%BlackRock CDN US Equity Index Fund 6 .4%Desjardins Overseas Equity Value Fund 3 .0%Desjardins Overseas Equity Growth Fund 2 .9%Franklin Bissett Canadian Equity Fund 2 .9%BlackRock Active Canadian Equity DC Fund 2 .8%Fidelity True North® Fund 2 .8%

PERFORMANCE INFORMATION FOR THE YEAR ENDING DECEMBER 31, 2016

Series 5** Series 5** Series 6 Series 6 Series 7 Series 7

$10,000 Lump Sum Value

Total Gain (Annualized)





1 Year 10,102 1 .0% 10,113 1 .1% 10,176 1 .8%Since Inception 10,185 1 .5% 10,577 2 .0% 10,713 2 .4%

** Beginning of operations in October 2015.

Series 5** Series 6 Series 7


STATEMENT OF FINANCIAL POSITION

As at December 312016

$2015

$ASSETSCurrent AssetsCash 75,146 70,175Investments at fair value through profit

or loss (FVTPL) 14,278,214 8,395,967Premiums receivable 85,122 —Receivable for securities sold 108 31,167

14,438,590 8,497,309

LIABILITIESCurrent LiabilitiesAccrued expenses 27,947 16,359Withdrawals payable 125,416 32,351Payable for securities purchased 1,298 399

154,661 49,109

NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 14,283,929 8,448,200

NET ASSETS PER UNITSeries 5 5.09 5 .04Series 6 5.29 5 .23Series 7 5.36 5 .26

The accompanying Notes are an integral part of these financial statements.

STATEMENT OF COMPREHENSIVE INCOME

Years Ended December 312016

$2015

$INCOMEInterest for attribution purposes 267,322 160,624Dividends 66,274 33,044Changes in fair value:

Net realized gain (loss) on investments 149,650 (13,233)Net unrealized gain (loss) on investments (112,885) (31,061)

370,361 149,374

EXPENSESManagement fees and guarantee charge 248,244 130,439Operating expenses 25,645 13,417

273,889 143,856Withholding taxes 3,077 1,599

276,966 145,455

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 93,395 3,919

DATA PER SERIESSERIES 5*Increase (Decrease) in Net Assets

from Operations (3,440) 349- per unit (0.03) 0 .07

Average Number of Units 105,251 4,845

SERIES 6Increase (Decrease) in Net Assets

from Operations 65,918 (4,339)- per unit 0.04 —

Average Number of Units 1,776,661 987,539


from Operations 30,917 7,909- per unit 0.11 0 .06


* Beginning of operations in October 2015.



STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERSYears Ended December 31

2016$

2015$

NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF YEAR 8,448,200 2,870,803 Increase (Decrease) in Net Assets

from operations attributable to contract owners 93,395 3,919

PremiumsSeries 5* 1,098,525 82,376 Series 6 7,496,140 5,123,094 Series 7 1,973,253 1,252,778

10,567,918 6,458,248

WithdrawalsSeries 5* (229,161) (15,189)Series 6 (2,917,657) (843,441)Series 7 (1,678,766) (26,140)

(4,825,584) (884,770)

NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF YEAR 14,283,929 8,448,200


STATEMENT OF CASH FLOWS


$2015

$CASH FLOWS FROM (USED IN) OPERATING ACTIVITIESIncrease (Decrease) in Net Assets


Adjustments for:Net realized gain (loss) (149,650) 13,233 Net unrealized gain (loss) 112,885 31,061 Non-cash distribution from investments (330,519) (192,069)

Proceeds from sale/maturity of investments 2,874,806 3,502,457

Investments purchased (8,389,769) (8,882,795)Receivable for securities sold 31,059 (31,167)Accrued expenses 11,588 11,162 Payable for securities purchased 899 (272)

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (5,745,306) (5,544,471)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIESPremium payments 10,482,796 6,467,716 Amounts paid on withdrawals (4,732,519) (853,597)

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 5,750,277 5,614,119

Increase (Decrease) in cash/bank overdraft 4,971 69,648

Cash (bank overdraft), beginning of year 70,175 527

CASH (BANK OVERDRAFT), END OF YEAR 75,146 70,175

DFS GIF – CONSERVATIVE (cont.)


SCHEDULE OF INVESTMENT PORTFOLIO

as at December 31, 2016Number of Units

Cost

$

Fair Value

$

INVESTMENT FUNDS (100.0%)BlackRock Active Canadian Equity DC Fund 12,432 408,586 406,896BlackRock CDN US Equity Index Fund, Class D 47,059 843,423 920,809Desjardins Enhanced Bond Fund, I-Class 307,341 3,471,569 3,382,594Desjardins Overseas Equity Growth Fund, I-Class 22,928 428,345 414,951Desjardins Overseas Equity Value Fund, I-Class 30,240 429,841 431,337DGIA Canadian Bond Fund 785,085 8,094,712 7,918,147Fidelity True North® Fund, Series O 8,301 378,705 396,370Franklin Bissett Canadian Equity Fund, Series O 2,747 367,923 407,110

TOTAL INVESTMENTS 14,423,104 14,278,214

OTHER NET ASSETS (0.0%) 5,715

NET ASSETS (100%) 14,283,929


TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited


DGIA CANADIAN BOND FUND 55.5%Canada Housing Trust, 1 .25%, June 15, 2021 6 .8%Province of Ontario, 2 .60%, June 2, 2025 4 .1%Province of Ontario, 2 .10%, September 8, 2019 4 .0%Canada Housing Trust, 2 .00%, December 15, 2019 3 .8%NHA MBS Merrill Lynch, 1 .35%, May 1, 2020 3 .1%

DESJARDINS ENHANCED BOND FUND 23.7%Government of Canada, 1 .50%, June 1, 2026 8 .7%Government of Canada, 2 .25%, June 1, 2025 3 .0%Province of British Columbia, 2 .70%, December 18, 2022 2 .7%Province of Quebec, 3 .50%, December 1, 2048 2 .5%Province of Ontario, 2 .40%, June 2, 2026 2 .4%

BLACKROCK CDN US EQUITY INDEX FUND 6.4%Apple 3 .2%Microsoft Corporation 2 .5%Exxon Mobil Corporation 1 .9%Johnson & Johnson 1 .6%Berkshire Hathaway 1 .6%

DESJARDINS OVERSEAS EQUITY VALUE FUND 3.0%Novartis AG 4 .2%Roche Holding AG 4 .0%Nestlé SA 3 .5%Japan Tobacco 3 .4%Royal Dutch Shell 3 .1%



TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited (cont.)


DESJARDINS OVERSEAS EQUITY GROWTH FUND 2.9%Tencent Holdings 5 .2%Inditex 5 .0%AIA Group 4 .9%Softbank Corporation 4 .7%ASML Holding 4 .5%

FRANKLIN BISSETT CANADIAN EQUITY FUND 2.9%Brookfield Asset Management 5 .8%Canadian National Railway Company 5 .2%Royal Bank of Canada 5 .1%Toronto-Dominion Bank 5 .0%Canadian Imperial Bank of Commerce 4 .6%

BLACKROCK ACTIVE CANADIAN EQUITY DC FUND 2.8%Royal Bank of Canada 7 .5%Toronto-Dominion Bank 7 .2%Scotiabank 5 .3%Canadian National Railway Company 4 .5%Canadian Imperial Bank of Commerce 3 .2%

FIDELITY TRUE NORTH® FUND 2.8%Toronto-Dominion Bank 8 .8%Canadian National Railway Company 4 .1%Suncor Energy 3 .6%CGI Group 3 .4%Rogers Communications 3 .3%


NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION

STRATEGY IN USING FINANCIAL INSTRUMENTS

Investment ObjectiveTo generate a consistent flow of income with an emphasis on the preservation of capital by investing in a number of different fixed income and equity underlying funds .

Investment StrategyTo invest in a wide array of underlying funds managed by using a multi-manager approach provided by acclaimed fund managers and sub-advisors .

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE (Note 7)

Hierarchy of Financial Instruments Measured at Fair ValueThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . Fair value measurement is described in the “Significant Accounting Policies” section of Note 2 .

Investment Measured at Fair Value at the End of Year, within the Following Levels:

December 31, 2016 Level 1$

Level 2$

Level 3$

Total$

Financial Assets at FVTPLInvestment Funds 5,032,362 9,245,852 — 14,278,214 TOTAL 5,032,362 9,245,852 — 14,278,214


Level 2$

Level 3$

Total$


Transfers between Levels 1 and 2During the years ended December 31, 2016 and 2015, there were no transfers of securities between Levels 1 and 2 .

Investment Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds (including limited partnerships) and master asset vehicles (included in the bonds) in the table “Investment Measured at Fair Value within the Levels” also represent the fair value of the investments in structured entities .

FINANCIAL INSTRUMENTS RISKS (Note 7)

Underlying Funds Risk ManagementMonthly, the investment strategy team compares the Funds’ performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Funds’ performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Funds’ investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Funds’ managers through an exhaustive questionnaire and periodic meetings .

Currency RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying funds . Detailed disclosure about the currency risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .

Interest Rate RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying funds . Detailed disclosure about the interest rate risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .




Concentration RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying funds . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .

Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying funds . Detailed disclosure about the price risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, with all other variables held constant, is as follows:

BenchmarksChange in Price

%

Impact on Net Assets Attributable to Contract Owners

December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (80%) 1 .00 114,271 67,586S&P/TSX (8%) 3 .00 34,281 20,276S&P 500 (6%) 3 .00 25,711 15,207MSCI EAFE Net (6%) 3 .00 25,711 15,207

When there is more than one benchmark, the effect of each benchmark must be considered individually, as each benchmark might fluctuate independently from the others .In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .

Credit RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying funds . Detailed disclosure about the credit risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .

Liquidity RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying funds . Detailed disclosure about the liquidity risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturities of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .


FINANCIAL HIGHLIGHTS — unaudited

The following table shows selected key financial information about the Fund and is intended to help you understand the Fund’s financial performance for the past three years . This information is derived from the Fund’s audited annual financial statements .

Net Assets and Net Asset Value Per Unit as at December 31st ($) 2016 2015 2014

Series 5* 5.09 5.04 —Series 6 5.29 5.23 5.18Series 7 5.36 5.26 5.19

Ratios and Supplemental Data Net Asset Value ($000’s)

Series 5* 933 68 —Series 6 11,770 7,126 2,850Series 7 1,580 1,255 20

Number of units outstanding (000)Series 5* 183 13 —Series 6 2,226 1,363 550Series 7 295 238 4

Management expense ratio (MER)1 (%)Series 5* 2.59 2 .59 —Series 6 2.47 2 .49 2 .51Series 7 1.88 2 .01 2 .01

Portfolio turnover rate2 (%) 26.04 60 .19 11 .83

* Beginning of operations in October 2015.1 The management expense ratio is based on total expenses (excluding commissions and other portfolio transaction costs and withholding taxes) for the stated

year and is expressed as an annualized percentage of daily average net asset value during the year. The management expense ratios reflected are those presented in the Fund Facts for each series.

2 The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher a Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of a Fund.


DFS GIF – MODERATE*






DGIA Canadian Bond Fund 44 .0%Desjardins Enhanced Bond Fund 18 .8%BlackRock CDN US Equity Index Fund 10 .9%Desjardins Overseas Equity Value Fund 5 .2%Desjardins Overseas Equity Growth Fund 5 .0%Franklin Bissett Canadian Equity Fund 4 .9%BlackRock Active Canadian Equity DC Fund 4 .8%Fidelity True North® Fund 4 .7%Cash and Cash Equivalents 1 .7%















$2015


or loss (FVTPL) 26,582,702 13,580,031Premiums receivable 437,404 18,755

27,411,483 14,052,759

LIABILITIESCurrent LiabilitiesAccrued expenses 51,363 27,384Withdrawals payable 122,636 7,033Payable for securities purchased 265,043 77,584

439,042 112,001






$2015


Net realized gain (loss) on investments 305,481 41,868Net unrealized gain (loss) on investments (10,368) (67,411)

867,309 266,369



480,947 237,749



from Operations 15,897 424- per unit 0.18 0 .03




Average Number of Units 3,116,323 1,682,360








2016$

2015$

NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF YEAR 13,940,758 5,361,120Increase (Decrease) in Net Assets


PremiumsSeries 5* 669,622 113,021Series 6 12,168,567 8,876,039Series 7 3,414,873 805,967

16,253,062 9,795,027

WithdrawalsSeries 5* (125,108) (15,215)Series 6 (3,011,529) (1,228,789)Series 7 (471,104) (5)

(3,607,741) (1,244,009)





$2015



Adjustments for:Net realized gain (loss) (305,481) (41,868)Net unrealized gain (loss) 10,368 67,411Non-cash distribution from investments (562,950) (287,509)


Investments purchased (14,842,018) (12,248,020)Accrued expenses 23,979 17,135Payable for securities purchased 187,459 68,141


CASH FLOWS FROM (USED IN) FINANCING ACTIVITIESPremium payments 15,834,413 9,818,235Amounts paid on withdrawals (3,492,138) (1,239,697)


Increase (Decrease) in cash/bank overdraft (62,596) 424,245

Cash (bank overdraft), beginning of year 453,973 29,728


DFS GIF – MODERATE (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (98.6%)BlackRock Active Canadian Equity DC Fund 39,988 1,327,562 1,308,762BlackRock CDN US Equity Index Fund, Class D 151,409 2,717,021 2,962,696Desjardins Enhanced Bond Fund, I-Class 461,926 5,227,730 5,083,955Desjardins Overseas Equity Growth Fund, I-Class 74,275 1,389,126 1,344,218Desjardins Overseas Equity Value Fund, I-Class 97,773 1,398,912 1,394,644DGIA Canadian Bond Fund 1,179,500 12,154,443 11,896,108Fidelity True North® Fund, Series O 26,802 1,229,546 1,279,892Franklin Bissett Canadian Equity Fund, Series O 8,857 1,198,187 1,312,427



NET ASSETS (100%) 26,972,441











Investment ObjectiveTo generate income while leaving room for some capital appreciation by investing in a number of different fixed income and equity underlying funds .






Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$











Concentration RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying funds . Detailed disclosure about the concentration risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .



%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (65%) 1 .00 175,321 90,615S&P/TSX (14%) 3 .00 113,284 58,551S&P 500 (10 .5%) 3 .00 84,963 43,913MSCI EAFE Net (10 .5%) 3 .00 84,963 43,913








Series 5* 5.14 5 .04 —Series 6 5.40 5 .29 5 .21Series 7 5.48 5 .34 5 .23







1 The management expense ratio is based on total expenses (excluding commissions and other portfolio transaction costs and withholding taxes) for the stated year and is expressed as an annualized percentage of daily average net asset value during the year. The management expense ratios reflected are those presented in the Fund Facts for each series.



DFS GIF – BALANCED*






DGIA Canadian Bond Fund 33 .8%BlackRock CDN US Equity Index Fund 15 .7%Desjardins Enhanced Bond Fund 14 .5%Desjardins Overseas Equity Value Fund 7 .4%Desjardins Overseas Equity Growth Fund 7 .1%Franklin Bissett Canadian Equity Fund 6 .9%BlackRock Active Canadian Equity DC Fund 6 .9%Fidelity True North® Fund 6 .8%Cash and Cash Equivalents 0 .9%















$2015


or loss (FVTPL) 54,212,097 30,993,618Premiums receivable 304,070 59,798Receivable for securities sold — 3,797

54,939,969 31,387,129


413,850 107,341






$2015

$INCOMEInterest for attribution purposes 603,390 315,733 Dividends 608,461 269,807 Changes in fair value:

Net realized gain (loss) on investments 681,873 182,073 Net unrealized gain (loss) on investments 679,574 (212,494)

2,573,298 555,119

EXPENSESManagement fees and guarantee charge 935,563 417,102 Operating expenses 92,349 40,796

1,027,912 457,898 Withholding taxes 28,205 12,919

1,056,117 470,817

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 1,517,181 84,302


from Operations 24,092 823 - per unit 0.26 0 .10



from Operations 1,271,874 70,826 - per unit 0.19 0 .02



from Operations 221,215 12,653 - per unit 0.21 0 .03






2016$

2015$


from operations attributable to contract owners 1,517,181 84,302

PremiumsSeries 5* 604,836 63,359Series 6 22,781,945 18,174,904Series 7 1,888,777 4,859,189

25,275,558 23,097,452

WithdrawalsSeries 5* (3,973) —Series 6 (2,917,073) (1,317,109)Series 7 (625,362) (181,540)

(3,546,408) (1,498,649)





$2015



Adjustments for:Net realized gain (loss) (681,873) (182,073)Net unrealized gain (loss) (679,574) 212,494Non-cash distribution from investments (1,183,646) (572,621)


Investments purchased (24,027,633) (27,812,818)Receivable for securities sold 3,797 (3,797)Accrued expenses 46,099 43,436Payable for securities purchased 243,096 5,870







DFS GIF – BALANCED (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (99.4%)BlackRock Active Canadian Equity DC Fund 115,678 3,809,754 3,786,023BlackRock CDN US Equity Index Fund, Class D 438,005 7,864,568 8,570,641Desjardins Enhanced Bond Fund, I-Class 719,057 8,120,344 7,913,940Desjardins Overseas Equity Growth Fund, I-Class 214,720 4,032,159 3,886,003Desjardins Overseas Equity Value Fund, I-Class 282,862 4,047,983 4,034,739DGIA Canadian Bond Fund 1,835,995 18,877,659 18,517,328Fidelity True North® Fund, Series O 77,565 3,549,100 3,703,876Franklin Bissett Canadian Equity Fund, Series O 25,641 3,420,568 3,799,547



NET ASSETS (100%) 54,526,119











Investment ObjectiveTo provide investors with an attractive balance of current income and capital appreciation by investing in a number of different fixed income and equity underlying funds .






Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$













%


December 31, 2016$


December 31, 2015$













Number of units outstanding (000)Series 5* 132 13 —Series 6 8,543 4,848 1,703Series 7 1,238 1,008 139







DFS GIF – GROWTH*






DGIA Canadian Bond Fund 23 .5%BlackRock CDN US Equity Index Fund 20 .4%Desjardins Enhanced Bond Fund 10 .0%Desjardins Overseas Equity Value Fund 9 .5%Desjardins Overseas Equity Growth Fund 9 .1%BlackRock Active Canadian Equity DC Fund 9 .0%Franklin Bissett Canadian Equity Fund 8 .9%Fidelity True North® Fund 8 .7%Cash and Cash Equivalents 0 .9%
















$2015


Net realized gain (loss) on investments 525,104 175,094Net unrealized gain (loss) on investments 693,151 (174,861)

2,046,005 345,165



721,133 294,873

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 1,324,872 50,292





from Operations 1,102,785 26,770- per unit 0.26 0 .01








$2015



41,837,195 19,093,850


788,300 94,294






2016$

2015$



PremiumsSeries 5* 4,239,029 161,010Series 6 17,244,265 14,121,829Series 7 3,597,009 716,800

25,080,303 14,999,639

WithdrawalsSeries 5* (429,141) (78,976)Series 6 (3,426,521) (1,011,364)Series 7 (500,174) (250,516)

(4,355,836) (1,340,856)





$2015



Adjustments for:Net realized gain (loss) (525,104) (175,094)Net unrealized gain (loss) (693,151) 174,861Non-cash distribution from investments (802,975) (334,674)


Investments purchased (23,073,986) (16,271,510)Receivable for securities sold 34,057 (34,057)Accrued expenses 43,206 30,084Payable for securities purchased 381,973 (11,154)







DFS GIF – GROWTH (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (99.4%)BlackRock Active Canadian Equity DC Fund 113,991 3,757,274 3,730,850BlackRock CDN US Equity Index Fund, Class D 431,493 7,866,410 8,443,241Desjardins Enhanced Bond Fund, I-Class 374,209 4,216,037 4,118,543Desjardins Overseas Equity Growth Fund, I-Class 207,670 3,921,057 3,758,415Desjardins Overseas Equity Value Fund, I-Class 273,322 3,914,935 3,898,670DGIA Canadian Bond Fund 955,346 9,847,759 9,635,348Fidelity True North® Fund, Series O 74,825 3,442,054 3,573,029Franklin Bissett Canadian Equity Fund, Series O 24,705 3,340,419 3,660,706



NET ASSETS (100%) 41,048,895











Investment ObjectiveTo emphasize appreciation of capital while still generating some income by investing in a number of different fixed income and equity underlying funds .






Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$













%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (35%) 1 .00 143,671 66,498S&P/TSX (26%) 3 .00 320,181 148,197S&P 500 (19 .5%) 3 .00 240,136 111,147MSCI EAFE Net (19 .5%) 3 .00 240,136 111,147











Series 5* 4,003 82 —Series 6 32,851 17,931 4,794Series 7 4,195 986 497








DFS GIF – MAXIMUM GROWTH*






BlackRock CDN US Equity Index Fund 25 .4%DGIA Canadian Bond Fund 13 .3%Desjardins Overseas Equity Value Fund 11 .6%BlackRock Active Canadian Equity DC Fund 11 .2%Desjardins Overseas Equity Growth Fund 11 .2%Franklin Bissett Canadian Equity Fund 10 .9%Fidelity True North® Fund 10 .6%Desjardins Enhanced Bond Fund 5 .7%Cash and Cash Equivalents 0 .1%















$2015



3,016,490 1,894,285

LIABILITIESCurrent LiabilitiesAccrued expenses 6,592 4,251Withdrawals payable 432 275Payable for securities purchased 1,207 1,174

8,231 5,700





$2015


Net realized gain (loss) on investments 53,601 29,842Net unrealized gain (loss) on investments 94,416 (13,151)

215,758 57,518



65,399 42,451




Average Number of Units 22,517 208







* Beginning of operations in October 2015.The accompanying Notes are an integral part of these financial statements.




2016$

2015$



PremiumsSeries 5* 129,447 2,003Series 6 891,994 959,772Series 7 438,703 —

1,460,144 961,775

WithdrawalsSeries 5* (11,468) —Series 6 (479,361) (116,110)Series 7 — —

(490,829) (116,110)





$2015




Proceeds from sale/maturity of investments 618,528 356,128

Investments purchased (1,524,761) (1,160,949)Accrued expenses 2,341 1,980Payable for securities purchased 33 965

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (966,760) (842,824)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIESPremium payments 1,457,423 962,719Amounts paid on withdrawals (490,672) (115,963)

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 966,751 846,756

Increase (Decrease) in cash/bank overdraft (9) 3,932



DFS GIF – MAXIMUM GROWTH (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (99.9%)BlackRock Active Canadian Equity DC Fund 10,337 345,548 338,341BlackRock CDN US Equity Index Fund, Class D 39,140 689,170 765,855Desjardins Enhanced Bond Fund, I-Class 15,496 174,691 170,544Desjardins Overseas Equity Growth Fund, I-Class 18,550 345,226 335,722Desjardins Overseas Equity Value Fund, I-Class 24,466 353,815 348,981DGIA Canadian Bond Fund 39,582 406,111 399,209Fidelity True North® Fund, Series O 6,698 304,221 319,845Franklin Bissett Canadian Equity Fund, Series O 2,214 297,138 328,052



NET ASSETS (100%) 3,008,259











Investment ObjectiveTo maximize the appreciation of capital while still generating some income by investing in a number of different fixed income and equity underlying funds .



Hierarchy of Financial Instruments Measured at Fair Value The following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . Fair value measurement is described in the “Significant Accounting Policies” section of Note 2 .

Investment Measured at Fair Value at the End of the Year, within the Following Levels:


Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$

Financial Assets at FVTPLInvestment Funds 963,301 923,755 — 1,887,056 TOTAL 963,301 923,755 — 1,887,056













%


December 31, 2016$


December 31, 2015$











Series 5* 131 2 —Series 6 2,414 1,865 1,008Series 7 463 21 20

Number of units outstanding (000)Series 5* 24 1 —Series 6 421 344 192Series 7 80 4 4

Management expense ratio (MER)1 (%)







Individual Funds


Income

DFS GIF – MONEY MARKET*






Royal Bank of Canada, 2 .364%, September 21, 2017 8 .6%Société de transport de Montréal, Notes, March 15, 2017 7 .7%Canadian Imperial Bank of Commerce, Floating Rate, February 9, 2018 6 .5%National Bank of Canada, 2 .689%, August 21, 2017 5 .5%Daimler Canada Finance, 2 .28%, February 17, 2017 5 .4%Toyota Credit Canada, Notes, May 16, 2017 4 .7%Scotiabank, Notes, January 19, 2017 4 .6%Gaz Métro, Notes, January 6, 2017 4 .6%Toronto-Dominion Bank, Notes, November 6, 2017 4 .5%Bank of Montreal, Floating Rate, March 29, 2018 4 .3%


Series 1 Series 1 Series 3 Series 3 Series 5 Series 5 Series 6 Series 6 Series 7 Series 7











1 Year 9,964 -0 .4% 9,964 -0 .4% 9,998 0 .0% 10,024 0 .2% 10,075 0 .7%3 Years 9,896 -0 .3% 9,897 -0 .3% 9,996 0 .0% — — — —5 Years 9,853 -0 .3% 9,856 -0 .3% 10,019 0 .0% — — — —10 Years 10,149 0 .1% 10,147 0 .1% — — — — — —Since Inception 13,170 1 .3% 12,103 1 .1% 10,207 0 .2% 10,052 0 .2% 10,204 0 .7%

Series IGP Series IGP



1 Year 9,970 -0 .3%3 Years — —5 Years — —10 Years — —Since Inception 9,927 -0 .3 %

Series 1 Series 3 Series 5 Series 6

Series IGP

Series 7




$2015



36,585,506 35,756,826LIABILITIESCurrent LiabilitiesAccrued expenses 37,058 38,465Withdrawals payable 146,581 584,009Payable for securities purchased 81,033 17,606

264,672 640,080NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 36,320,834 35,116,746

NET ASSETS PER UNITSeries 1 6.59 6 .61Series 3 6.60 6 .62Series 5 6.80 6 .80Series 6 5.03 5 .01Series 7 5.10 5 .06Series IGP 9.93 9 .96



$2015

$INCOMEInterest for attribution purposes 684,077 718,683Changes in fair value:

Net realized gain (loss) on investments (443,915) (407,864)Net unrealized gain (loss) on investments 224,963 64,491

465,125 375,310EXPENSESManagement fees and guarantee charge 304,199 277,262Operating expenses 148,934 147,731

453,133 424,993

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 11,992 (49,683)

DATA PER SERIES


from Operations (1,538) (2,186)- per unit (0.02) (0 .03)






from Operations (5,356) (28,573)- per unit — (0 .01)



from Operations 22,405 (1,081)- per unit 0.01 —





SERIES IGPIncrease (Decrease) in Net Assets







2016$

2015$


from operations attributable to contract owners 11,992 (49,683)

PremiumsSeries 1 54,933 9,355Series 3 926,487 1,636,996Series 5 7,956,100 9,801,187Series 6 10,940,251 11,405,791Series 7 3,420,916 1,217,195Series IGP 329,539 421,480

23,628,226 24,492,004

WithdrawalsSeries 1 (118,668) (136,401)Series 3 (1,875,372) (1,386,131)Series 5 (9,399,717) (9,634,371)Series 6 (8,739,316) (4,517,664)Series 7 (1,750,945) (1,243,713)Series IGP (552,112) (561,985)

(22,436,130) (17,480,265)




$2015


from operations attributable to contract owners 11,992 (49,683)

Adjustments for:Net realized gain (loss) 443,915 407,864Net unrealized gain (loss) (224,963) (64,491)Non-cash distribution from investments (684,077) (718,689)


Investments purchased (16,099,923) (16,266,931)Accrued expenses (1,407) 6,234Payable for securities purchased 63,427 (95,374)

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (694,033) (7,063,160)



Increase (Decrease) in cash/bank overdraft 396,656 (86,869)



SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM (USED IN) OPERATING ACTIVITIESInterest paid — 10

Income

DFS GIF – MONEY MARKET (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (99.2%)DGIA Money Market Fund 3,743,767 34,692,836 36,019,646



NET ASSETS (100%) 36,320,834


TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited


Royal Bank of Canada, 2 .364%, September 21, 2017 8 .6%Société de transport de Montréal, Notes, March 15, 2017 7 .7%Canadian Imperial Bank of Commerce, Floating Rate, February 9, 2018 6 .5%National Bank of Canada, 2 .689%, August 21, 2017 5 .5%Daimler Canada Finance, 2 .28%, February 17, 2017 5 .4%Toyota Credit Canada, Notes, May 16, 2017 4 .7%Scotiabank, Notes, January 19, 2017 4 .6%Gaz Métro, Notes, January 6, 2017 4 .6%Toronto-Dominion Bank, Notes, November 6, 2017 4 .5%Bank of Montreal, Floating Rate, March 29, 2018 4 .3%BMW Canada, Floating Rate, June 14, 2019 3 .9%Province of Newfoundland and Labrador, Stripped, October 17, 2017 3 .8%Scotiabank, 4,10%, June 8, 2017 3 .1%Bank of Montréal, 2 .39%, July 12, 2017 3 .1%Daimler Canada Finance, Floating Rate, July 8, 2019 2 .7%Province of Ontario, Stripped, December 2, 2017 2 .5%Toyota Credit Canada, Floating Rate, January 22, 2018 2 .5%Province of Nova Scotia, Stripped, June 1, 2017 2 .4%Toronto-Dominion Bank, Floating Rate, March 28, 2018 2 .3%Gaz Métro, Notes, January 26, 2017 2 .1%Ontario Treasury Bills, March 22, 2017 1 .9%Ontario Treasury Bills, May 10, 2017 1 .9%Lower Mattagami Energy, 2 .228%, October 23, 2017 1 .6%Toyota Credit Canada, Floating Rate, February 25, 2019 1 .6%Province of Ontario, Stripped, August 7, 2017 1 .5%



as at December 31, 2016


Investment ObjectiveTo provide a higher level of interest income than can normally be obtained from savings accounts, combined with a high level of liquidity and safety of capital .

Investment StrategyTo invest primarily in Canadian government treasury bills and in bankers’ acceptances, which have a maximum maturity of 12 months . The Fund’s modified duration may not exceed 180 days .





Level 2$

Level 3$

Total$

Financial Assets at FVTPLInvestment Funds — 36,019,646 — 36,019,646 TOTAL — 36,019,646 — 36,019,646


Level 2$

Level 3$

Total$





Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Funds’ performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Funds’ performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Funds’ investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Funds’ managers through an exhaustive questionnaire and periodic meetings .

Currency RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .

Interest Rate RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .

Income





Concentration RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .

Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, with all other variables held constant, is as follows:


%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada 91 Day Treasury Bills 0 .25 90,802 87,792


Credit RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .

Liquidity RiskAs at December 31, 2016 and 2015, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturities of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .


Income



The following table shows selected key financial information about the Fund and is intended to help you understand the Fund’s financial performance for the past five years . This information is derived from the Fund’s audited annual financial statements . The net assets per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes .

Net Assets Per Unit as at December 31st ($) 2016* 2015* 2014* 2013* 2012

Series 1 6.59 6 .61 6 .64 6 .65 6 .66Series 3 6.60 6 .62 6 .65 6 .66 6 .67Series 5 6.80 6 .80 6 .81 6 .80 6 .78Series 6 5.03 5 .01 5 .01 — —Series 7 5.10 5 .06 5 .03 — —Series IGP 9.93 9 .96 10 .00 — —

Net Asset Value Per Unit as at December 31st ($)

Series 1 6.59 6 .61 6 .64 6 .65 6 .66Series 3 6.60 6 .62 6 .65 6 .66 6 .67Series 5 6.80 6 .80 6 .81 6 .80 6 .78Series 6 5.03 5 .01 5 .01 — —Series 7 5.10 5 .06 5 .03 — —Series IGP 9.93 9 .96 10 .00 — —


Series 1 388 453 582 642 642Series 3 2,273 3,232 2,997 4,012 5,158Series 5 18,941 20,390 20,252 25,127 30,543Series 6 10,738 8,515 1,628 — —Series 7 2,503 821 843 — —Series IGP 1,478 1,706 1,853 — —

Number of units outstanding (000)Series 1 59 69 88 96 96Series 3 345 488 451 602 773Series 5 2,787 2,999 2,975 3,695 4,502Series 6 2,137 1,698 325 — —Series 7 491 162 167 — —Series IGP 149 171 185 — —

Management expense ratio (MER)1 (%)Series 1 1.72 1 .72 1 .72 1 .72 1 .55Series 3 1.71 1 .72 1 .73 1 .72 1 .55Series 5 1.38 1 .39 1 .39 1 .40 1 .25Series 6 1.12 1 .10 1 .11 — —Series 7 0.61 0 .63 0 .63 — —Series IGP 1.66 1 .66 1 .67 — —

Portfolio turnover rate2 (%) 43.22 27 .15 287 .24 n/a n/a

* For the period beginning on or after January 1, 2013, financial information is shown in accordance with IFRS, while for the years’ ended December 31, 2012 and prior, financial information is shown in accordance with GAAP.

1 The management expense ratio is based on total expenses (excluding commissions and other portfolio transaction costs and withholding taxes) for the stated year and is expressed as an annualized percentage of the daily average net asset value during the year. Starting in 2013, the determination of the management expense ratio was revised to include all taxes (not included before 2013). The management expense ratios reflected are those presented in the Fund Facts for each series.



Income

DFS GIF – INCOME – FIERA CAPITAL*






Government of Canada, 0 .25%, May 1, 2018 12 .9%Fiera Active Short Term Canadian Municipal Bond Fund 9 .2%Province of Ontario, 2 .85%, June 2, 2023 8 .0%Province of Ontario, 3 .50%, June 2, 2024 4 .0%Ontario School Boards Financing Corporation, 7 .20%, June 9, 2025 2 .9%Government of Canada, 0 .50%, February 1, 2019 2 .9%Royal Office Finance, 5 .209%, November 12, 2032 2 .3%Province of Ontario, 2 .80%, June 2, 2048 2 .2%Province of Ontario, 2 .90%, December 2, 2046 2 .2%Province of Quebec, 3 .50%, December 1, 2045 2 .0%













1 Year 9,890 -1 .1% 9,922 -0 .8% 9,988 -0 .1% 10,008 0 .1% 10,055 0 .5%3 Years 10,479 1 .6% 10,578 1 .9% 10,786 2 .6% — — — —5 Years 10,184 0 .4% 10,351 0 .7% 10,691 1 .3% — — — —10 Years 12,583 2 .3% 12,979 2 .6% — — — — — —Since Inception 20,068 3 .4% 17,196 3 .0% 13,711 3 .5% 10,602 2 .1% 10,748 2 .6%

Series 1 Series 3 Series 5 Series 6 Series 7




$2015

$ASSETSCurrent AssetsInvestments at fair value through profit

or loss (FVTPL) 84,355,749 95,095,603Investments at fair value through profit

or loss (FVTPL) pledged as collateral 14,399,694 12,171,098Premiums receivable 148,258 49,071Receivable for securities sold 1,229,118 —Cash guarantee received for repurchase

transactions 13,421,407 12,107,884Interest, dividends and other receivables 468,394 521,404

114,022,620 119,945,060LIABILITIESCurrent LiabilitiesBank overdraft 35,818 10,221 Accrued expenses 166,273 182,647 Withdrawals payable 695,862 287,615Payable for securities purchased 1,158,574 —Commitments related to repurchase

transactions 13,421,407 12,107,88415,477,934 12,588,367


NET ASSETS PER UNITSeries 1 10.03 10 .15Series 3 10.61 10 .69Series 5 11.22 11 .24Series 6 5.30 5 .30 Series 7 5.37 5 .34



$2015

$INCOMEInterest for attribution purposes 3,143,932 3,372,242Revenue from securities lending and

repurchase transactions 17,033 15,798Changes in fair value:

Net realized gain (loss) on investments 860,210 4,184,355Net unrealized gain (loss) on investments (1,990,455) (3,966,417)

2,030,720 3,605,978EXPENSESManagement fees and guarantee charge 1,423,048 1,461,291Operating expenses 690,707 733,763

2,113,755 2,195,054

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS (83,035) 1,410,924

DATA PER SERIES


from Operations (18,053) 11,176 - per unit (0.09) 0 .04



from Operations (43,607) 84,403 - per unit (0.04) 0 .10



from Operations 53,635 1,285,549- per unit 0.01 0 .16



from Operations (63,631) 28,398- per unit (0.04) 0 .04






Income

DFS GIF – INCOME – FIERA CAPITAL (cont.)



STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS


$2015

$


from operations attributable to contract owners (83,035) 1,410,924

PremiumsSeries 1 99,059 47,904 Series 3 599,692 4,944,743 Series 5 8,330,614 8,579,411 Series 6 5,055,842 4,109,975 Series 7 1,358,442 233,964

15,443,649 17,915,997

WithdrawalsSeries 1 (707,419) (510,786)Series 3 (2,721,479) (1,953,239)Series 5 (18,991,379) (18,419,640)Series 6 (1,238,813) (846,561)Series 7 (513,531) (4,085)

(24,172,621) (21,734,311)




$2015



Adjustments for:Net realized gain (loss) (860,210) (4,184,355)Net unrealized gain (loss) 1,990,455 3,966,417Non-cash distribution from investments (182,155) (29,257)


Investments purchased (316,592,879) (244,048,159)Receivable for securities sold (1,229,118) 2,305,571 Cash guarantee received for

repurchase transactions (1,313,523) 16,273,444 Interest, dividends and other

receivables 53,010 98,230Accrued expenses (16,374) (3,417)Commitments related to repurchase

transactions 1,313,523 (16,273,444)Payable for securities purchased 1,158,574 (2,281,104)

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES 8,394,349 3,685,498


NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES (8,419,912) (3,680,265)

Effect of exchange rate changes on foreign cash (34) 188


Cash (bank overdraft), beginning of year (10,221) (15,642)

CASH (BANK OVERDRAFT), END OF YEAR (35,818) (10,221)

SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES

Interest received 3,014,804 3,441,250Interest paid 17 38


Income



Schedule of Investment Portfolioas at December 31, 2016For ease of comprehension to the reader, for the DFS GIF – Income – Fiera Capital, the entire portfolio of securities in the Schedule of Investment Portfolio as at June 30, 2016, has not been disclosed . Instead, the major categories of assets are listed along with the percentages that each of these categories hold . The total costs, fair values, number of units, total investments and net assets are also listed .

SCHEDULE OF INVESTMENT PORTFOLIOas at December 31, 2016

Par Fair Value Cost Value $ $BONDS (89.3%)

Canadian Bonds (89.2%)

Government of Canada (19.9%)Broadcast Center Trust 7 .530%, 2027-05-01 CAD 174,678 172,361 224,496 Government of Canada 0 .250%, 2018-05-01* CAD 12,818,000 12,734,521 12,745,201 Series G401, 0 .500%, 2019-02-01* CAD 2,853,000 2,835,126 2,837,184 Series WL43, 5 .750%, 2029-06-01* CAD 109,000 161,756 153,806 5 .750%, 2033-06-01 CAD 478,000 756,009 711,371 2 .750%, 2048-12-01 CAD 324,000 349,110 356,014 PSP Capital Series 7, 3 .290%, 2024-04-04 CAD 345,000 330,135 368,046 Royal Office Finance Series A, 5 .209%, 2032-11-12 CAD 1,847,691 1,675,726 2,220,370

19,014,744 19,616,488

Provincial Governments and Crown Corporations (32.4%)New Brunswick (F-M) Project Company 6 .470%, 2027-11-30 CAD 446,324 467,511 547,376 Ontario Infrastructure 4 .700%, 2037-06-01 CAD 80,000 71,858 93,194 Ontario School Boards Financing Corporation Series 00A1, 7 .200%, 2025-06-09 CAD 2,342,740 2,500,436 2,850,874 Series 01A3, 6 .550%, 2026-10-19 CAD 1,491 1,527 1,788 Private Placement, Series 06A1, 5 .070%, 2031-04-18 CAD 506,045 453,985 570,462 Ornge Issuer Trust 5 .727%, 2034-06-11 CAD 264,768 242,425 309,541 Province of British Columbia 3 .200%, 2044-06-18* CAD 640,000 565,375 644,864 2 .800%, 2048-06-18 CAD 441,000 420,804 412,160 Province of Ontario 3 .150%, 2022-06-02* CAD 694,000 705,308 740,495 2 .850%, 2023-06-02 CAD 7,544,000 6,809,058 7,904,703 3 .500%, 2024-06-02 CAD 3,610,000 3,597,186 3,920,678 2 .600%, 2025-06-02 CAD 1,864,000 1,933,614 1,894,178 2 .400%, 2026-06-02* CAD 729,000 748,683 723,734 2 .900%, 2046-12-02 CAD 2,302,000 2,240,763 2,157,590 2 .800%, 2048-06-02 CAD 2,403,000 2,262,082 2,212,657 Province of Québec 3 .500%, 2022-12-01* CAD 190,000 208,282 206,596 2 .750%, 2025-09-01* CAD 933,000 986,001 957,614 2 .500%, 2026-09-01 CAD 970,000 1,020,710 969,090 5 .750%, 2036-12-01 CAD 296,000 407,829 405,415 4 .250%, 2043-12-01 CAD 796,000 777,244 935,082 3 .500%, 2045-12-01 CAD 1,887,000 1,935,590 1,970,670 3 .500%, 2048-12-01 CAD 276,000 311,138 290,827

*Securities pledged as collateral, in part or in whole, through the securities lending program.



Par Fair Value Cost Value $ $

Provincial Governments and Crown Corporations (cont.)TCHC Issuer Trust 4 .877%, 2037-05-11 CAD 287,000 238,639 335,881 Series B, 5 .395%, 2040-02-22 CAD 690,000 637,841 875,759

29,543,889 31,931,228

Corporations (36.9%)Bank of Montreal 2 .390%, 2017-07-12 CAD 33,000 31,161 33,243 2 .240%, 2017-12-11 CAD 529,000 502,045 534,676 3 .340%, (floating rate from 2020-12-08), 2025-12-08 CAD 775,000 774,713 789,627 3 .320%, (floating rate from 2021-06-01), 2026-06-01 CAD 637,000 636,911 647,581 Blackbird Infrastructure 407 General Partners 1 .713%, (floating rate from 2020-01-08), 2021-10-08 CAD 229,000 227,216 226,520 Caisse centrale Desjardins 2 .443%, 2019-07-17 CAD 840,000 805,831 858,650 Canadian Imperial Bank of Commerce 2 .350%, 2017-10-18 CAD 578,000 552,315 583,736 2 .350%, 2019-06-24 CAD 56,000 53,675 57,161 3 .000%, (floating rate from 2019-10-28), 2024-10-28* CAD 88,000 88,208 88,789 3 .420%, (floating rate from 2021-01-26), 2026-01-26 CAD 697,000 699,458 710,470 Canadian Utilities 4 .543%, 2041-10-24 CAD 556,000 579,901 623,504 4 .722%, 2043-09-09 CAD 223,000 251,453 257,413 4 .085%, 2044-09-02 CAD 184,000 188,443 193,054 Capital City Link Series A, 4 .386%, 2046-03-31 CAD 847,000 759,585 867,958 Cominar Real Estate Investment Trust Series 9, 4 .164%, 2022-06-01 CAD 645,000 645,000 657,557 Series 10, 4 .247%, 2023-05-23 CAD 342,000 342,190 345,807 CSS (FSCC) Partnership 6 .915%, 2042-07-31 CAD 95,376 110,111 126,341 CU 3 .763%, 2046-11-19 CAD 196,000 196,000 195,296 Enbridge 3 .940%, 2023-06-30* CAD 425,000 401,286 451,587 7 .220%, 2030-07-24 CAD 150,000 157,438 189,467 4 .570%, 2044-03-11 CAD 958,000 884,436 947,370 Grand Renewable Solar Series 1A, 3 .926%, 2035-01-31 CAD 282,034 282,034 279,486 Health Montréal Collective, Private Placement Series 144A, 6 .721%, 2049-09-30 CAD 1,370,000 1,575,576 1,702,805 Hospital Infrastructure Series A, 5 .439%, 2045-01-31 CAD 431,313 396,895 481,448 Integrated Team Solutions SJHC 5 .946%, 2042-11-30 CAD 198,997 183,931 243,979 Laurentian Bank of Canada 2 .750%, 2021-04-22 CAD 285,000 284,393 287,689 Melancthon Wolfe Wind 3 .834%, 2028-12-31 CAD 308,502 308,539 314,932




Income



Par Fair Value Cost Value $ $Corporations (cont.)

North West Redwater Partnership Series A, 3 .200%, 2024-07-22 CAD 505,000 484,491 524,440 3 .200%, 2026-04-24 CAD 263,000 262,440 268,042 Series F, 4 .250%, 2029-06-01 CAD 310,000 309,138 331,906 Northland Power Solar Finance Limited Partnership Series A, 4 .958%, 2032-12-31 CAD 387,671 369,540 427,514 Plenary Properties 6 .288%, 2044-01-31 CAD 828,759 804,246 1,059,616 Reliance Series 2, 5 .187%, 2019-03-15 CAD 394,000 371,084 411,212 Royal Bank of Canada 2 .364%, 2017-09-21 CAD 802,000 757,861 809,472 2 .260%, 2018-03-12 CAD 515,000 486,798 521,346 2 .820%, 2018-07-12 CAD 250,000 239,188 255,671 1 .400%, 2019-04-26 CAD 1,095,000 1,094,650 1,095,244 2 .860%, 2021-03-04 CAD 8,000 7,670 8,292 2 .030%, 2021-03-15 CAD 865,000 864,671 868,251 1 .583%, 2021-09-13 CAD 510,000 510,000 499,714 3 .040%, (floating rate from 2019-07-17), 2024-07-17 CAD 165,000 158,228 166,715 2 .990%, (floating rate from 2019-12-06), 2024-12-06 CAD 1,070,000 1,008,613 1,104,319 2 .480%, (floating rate from 2020-06-04), 2025-06-04 CAD 825,000 824,843 816,991 Scotiabank 2 .370%, 2018-01-11* CAD 1,510,000 1,439,255 1,528,959 2 .242%, 2018-03-22 CAD 916,000 865,789 927,426 3 .270%, 2021-01-11 CAD 1,105,000 1,063,793 1,164,123 2 .898%, (floating rate from 2017-08-03), 2022-08-03 CAD 734,000 700,439 740,103 3 .367%, (floating rate from 2020-12-08), 2025-12-08* CAD 1,301,000 1,301,000 1,326,652 2 .620%, 2026-12-02 CAD 463,000 462,921 459,327 SGTP Highway Bypass Series A, 4 .105%, 2045-01-31 CAD 435,000 435,000 438,167 SNC-Lavalin Innisfree McGill Finance 6 .632%, 2044-06-30 CAD 401,344 423,672 512,092 Teranet Holdings 3 .646%, 2022-11-18 CAD 300,000 300,000 307,471 Teranet Income Fund 5 .754%, 2040-12-17 CAD 560,000 542,786 601,378 6 .100%, 2041-06-17 CAD 964,000 917,870 1,080,995 Toronto-Dominion Bank 2 .447%, 2019-04-02 CAD 805,000 772,170 822,502 2 .563%, 2020-06-24 CAD 250,000 239,817 256,985 1 .680%, 2021-06-08 CAD 270,000 269,897 268,138 3 .226%, 2024-07-24* CAD 468,000 451,175 492,018 2 .692%, (floating rate from 2020-06-24), 2025-06-24 CAD 456,000 456,000 455,149 2 .982%, (floating rate from 2020-09-30), 2025-09-30* CAD 386,000 386,000 388,695 5 .763%, (floating rate from 2017-12-18), 2106-12-18 CAD 1,456,000 1,517,281 1,514,854 TransCanada PipeLines 6 .890%, 2028-08-07 CAD 500,000 409,578 636,494 8 .050%, 2039-02-17 CAD 356,000 529,596 540,932

33,956,244 36,327,351

TOTAL CANADIAN BONDS 82,514,877 87,875,067




TOP FIVE HOLDINGS OF THE UNDERLYING FUND – unaudited


FIERA ACTIVE SHORT TERM CANADIAN MUNICIPAL BOND FUND 9.2%Province of Ontario, 1 .90%, September 8, 2017 2 .4%City of Magog, 2 .00%, September 2, 2020 2 .3%Province of Quebec, 4 .50%, December 1, 2017 2 .2%City of Beloeil, 2 .00%, September 8, 2020 1 .5%City of Côte St-Luc, 2 .00%, August 25, 2020 1 .4%


Par Fair Value Cost Value $ $

U.S. Bonds (0.1%)Sinai Health System Series A, 3 .527%, 2056-06-09 CAD 151,000 151,000 140,302

TOTAL BONDS 82,665,877 88,015,369

Number of UnitsINVESTMENT FUNDS (9.2%)

Fiera Active Short Term Canadian Municipal Bond Fund 909,475 9,096,577 9,103,703

Par Value

MONEY MARKET SECURITIES (0.8%)Canada Treasury Bills 2017-01-04 CAD 110,000 109,974 109,974 2017-03-09 CAD 680,000 679,387 679,387

TOTAL MONEY MARKET SECURITIES 789,361 789,361

ASSET-BACKED SECURITIES (0.7%)CHIP Mortgage Trust 3 .663%, 2038-09-25 CAD 626,000 598,829 643,947

MORTGAGE-BACKED SECURITIES (0.2%)Merrill Lynch Financial Assets Series 2007-CA22, Class A3, 4 .878%, 2017-04-12 CAD 250,000 185,130 203,063

TOTAL INVESTMENTS (100.2%) 93,335,774 98,755,443

OTHER NET ASSETS (-0.2%) (210,757)

NET ASSETS (100%) 98,544,686






Investment ObjectiveTo provide above-average interest income with some potential for capital growth by investing primarily in bonds and other interest-bearing instruments of Canadian federal and provincial governments and investment-grade corporations .

Investment StrategyTo place emphasis primarily on medium and long-term maturities . Such maturities normally provide higher returns and better potential for capital gains but also higher variability of performance during periods of rapidly changing interest rates .




December 31, 2016 Level 1 $

Level 2 $

Level 3 $

Total $

Financial Assets at FVTPLBonds 47,577,216 40,438,153 — 88,015,369Investment Funds — 9,103,703 — 9,103,703Mortgage-Backed Securities — 203,063 — 203,063Asset-Backed Securities — 643,947 — 643,947Money Market Securities 789,361 — — 789,361TOTAL 48,366,577 50,388,866 — 98,755,443

December 31, 2015 Level 1 $

Level 2 $

Level 3 $

Total $

Financial Assets at FVTPLBonds 47,190,319 48,296,032 — 95,486,351Investment Funds — 8,938,322 — 8,938,322Mortgage-Backed Securities — 1,305,466 — 1,305,466Asset-Backed Securities — 657,388 — 657,388Money Market Securities 879,174 — — 879,174TOTAL 48,069,493 59,197,208 — 107,266,701




Currency RiskAs at December 31, 2016 and 2015, the majority of the Fund’s financial assets and liabilities are denominated in Canadian dollars . As a result, the Fund is not significantly exposed to currency risk .

Income





Interest Rate RiskThe following table summarizes the Fund’s exposure to interest rate risk . It includes the Fund’s financial assets and liabilities at fair value, categorized by the earlier of contractual re-pricing or maturity dates . The table also illustrates the impact on the Net Assets Attributable to Contract Owners, had prevailing interest rates changed by 0 .25%, assuming a parallel shift in the yield curve, with all other variables held constant .

Less than 1 Year

$1 to 5 Years

$5 to 10 Years

$

Greater than 10 Years

$Total

$

Impact on Net Assets Attributable to

Contract Owners$

December 31, 2016 5,172,690 32,135,256 24,044,045 28,263,931 89,615,922 1,459,471December 31, 2015 4,627,791 36,027,633 28,039,485 29,623,249 98,318,158 1,616,019

In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .

Concentration RiskThe following table summarizes the concentration risk, as a percentage of the Net Assets Attributable to Contract Owners:

MARKET SEGMENT December 31, 2016%

Canadian BondsCorporations 36 .9Provincial Governments and Crown Corporations 32 .4Government of Canada 19 .9

U .S . Bonds 0 .1Income Investment Funds 9 .2Money Market Securities 0 .8Asset-Backed Securities 0 .7Mortgage-Backed Securities 0 .2Other Net Assets (0 .2)TOTAL 100


Canadian BondsCorporations 40 .9 Provincial Governments and Crown Corporations 32 .5 Government of Canada 15 .6

Income Investment Funds 8 .3 Mortgage-Backed Securities 1 .2 Money Market Securities 0 .8 Asset-Backed Securities 0 .6 Other Net Assets 0 .1 TOTAL 100

Price RiskThe Fund may trade in financial instruments and take positions in over-the-counter instruments .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .


%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe 1 .00 919,997 1,021,326





Credit RiskThe Fund’s credit risk is mainly concentrated in fixed-income securities . Their fair values include consideration of the issuers’ creditworthiness and accordingly, represent the Fund’s maximum exposure to credit risk .

Portfolio’s Fixed-Income Securities by Credit Rating Category

Credit Rating Percentage of Fixed-Income Securities

December 31, 2016%

Percentage of Fixed-Income Securities

December 31, 2015%

AAA 26 20AA 39 44A 21 26BBB 14 10Total 100 100

Securities Lending and Repurchase TransactionsAs part of its securities lending against cash and repurchase transactions, the Fund is exposed to counterparty credit risk .The carrying amount of financial assets lent as part of repurchase transactions is:

$December 31, 2016 13,449,419December 31, 2015 12,113,751

As part of its reverse repurchase transactions, the Fund is permitted to sell or repledge in the absence of default the financial assets held as collateral .The fair value of those financial assets is:

$December 31, 2016 9,655,994 December 31, 2015 5,988,222

Liquidity RiskFor further information on maturities of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .

DERECOGNITION OF FINANCIAL ASSETS

Securities Lending and Repurchase TransactionsAs part of transactions involving securities lending or repurchase transactions, the Fund transfers financial assets under terms and conditions providing for their future repurchase . These financial assets remain recognized in the "Investments at fair value through profit or loss pledged as collateral" of the Statement of Financial Position as the Fund retains substantially all the risks and rewards related to these assets .

December 31, 2016$

December 31, 2015$

Investments at FVTPL pledged as Collateral 14,399,694 12,171,098Value of Collateral received 14,687,688 12,414,521

The Funds require collateral in the form of cash or such other securities as may be acceptable to Desjardins Financial Security and that have an aggregate value of no less than 102% of the loaned securities fair value .

Income





The following table presents the carrying amount and the fair value of financial assets transferred by the Fund but not derecognized as well as the related liabilities recognized in ”Commitments related to repurchase transactions” and ”Commitments related to securities lending” of the Statement of Financial Position .

Fair Value* December 31, 2016

$


$Financial Assets 13,449,419 12,113,751Related Liabilities 13,421,407 12,107,884

*The fair value equals the carrying amount .

RECONCILIATION OF INCOME FROM SECURITY LENDING AND REPURCHASE TRANSACTION (Note 2)The following table shows a reconciliation of the total income generated from securities lending transactions of the Fund and the revenue from securities lending and repurchase transactions disclosed in the Fund’s Statement of Comprehensive Income .

December 31, 2016

$

December 31, 2016

%

December 31, 2015

$

December 31, 2015

%Total Income 28,388 100 26,330 100Net Income received by

the Fund 17,033 60 15,798 60Net Income received by

Desjardins Trust 11,355 40 10,532 40


Income





Series 1 10.03 10 .15 10 .11 9 .58 9 .99Series 3 10.61 10 .69 10 .63 10 .03 10 .43Series 5 11.22 11 .24 11 .09 10 .40 10 .75Series 6 5.30 5 .30 5 .22 — —Series 7 5.37 5 .34 5 .24 — —




Series 1 1,967 2,593 3,045 3,557 4,258Series 3 9,265 11,430 8,354 10,367 14,161Series 5 76,630 87,237 95,792 114,786 143,038Series 6 9,559 5,805 2,513 — —Series 7 1,124 291 60 — —

Number of units outstanding (000)Series 1 196 256 301 371 426Series 3 873 1,069 786 1,034 1,356Series 5 6,829 7,765 8,637 11,034 13,292Series 6 1,803 1,096 482 — —Series 7 209 54 11 — —

Management expense ratio (MER)1 (%)Series 1 2.93 2 .93 2 .94 2 .93 2 .65Series 3 2.61 2 .61 2 .62 2 .61 2 .33Series 5 1.96 1 .96 1 .96 1 .95 1 .75Series 6 1.77 1 .79 1 .80 — —Series 7 1.22 1 .31 1 .32 — —

Portfolio turnover rate2 (%) 289.12 180 .62 198 .10 209 .96 260 .24





Income

DFS GIF – CANADIAN BOND*



The following unaudited section shows the Top holdings of the Fund and performance data for the period ending December 31, 2016 . The current objective and strategy of the Fund can be found in the audited Financial Instruments Disclosures as at December 31, 2016 section of this document under the section heading “Strategy in using Financial Instruments” .For a detailed description of each Fund’s investment policy and where applicable, the investment policy and/or prospectus and financial statements of the underlying fund(s) is available upon request by writing to the Company at 1 Complexe Desjardins, P .O . Box 9000, Montreal, Quebec, H5B 1H5 .



Canada Housing Trust, 1 .25%, June 15, 2021 6 .8%Province of Ontario, 2 .60%, June 2, 2025 4 .1%Province of Ontario, 2 .10%, September 8, 2019 4 .0%Canada Housing Trust, 2 .00%, December 15, 2019 3 .8%NHA MBS Merrill Lynch, 1 .35%, May 1, 2020 3 .1%Government of Canada, 1 .50%, June 1, 2026 2 .6%Financement-Québec, 2 .45%, December 1, 2019 2 .6%Province of Ontario, 2 .85%, June 2, 2023 2 .5%Canada Housing Trust, 2 .90%, June 15, 2024 2 .4%Government of Canada, 5 .00%, June 1, 2037 2 .3%

PERFORMANCE INFORMATION FOR THE PERIOD ENDING DECEMBER 31, 2016

Series 5** Series 5** Series 6** Series 6** Series 7** Series 7**









Series 5** Series 6** Series 7**




$2015

$ASSETSCurrent AssetsCash 6,230 —Investments at fair value through profit

or loss (FVTPL) 40,138,962 41,285,987Premiums receivable 166,413 21,713Receivable for securities sold 58,765 54,840

40,370,370 41,362,540LIABILITIESCurrent LiabilitiesBank overdraft — 14,263Accrued expenses 63,066 66,808Withdrawals payable 269,234 108,098




Periods Ended December 312016

(12 months)$

2015* (3 months)

$INCOMEInterest for attribution purposes 1,084,074 264,572Changes in fair value:

Net realized gain (loss) on investments 232,642 151,068Net unrealized gain (loss) on investments (499,642) 108,110

817,074 523,750EXPENSESManagement fees and guarantee charge 533,230 109,926Operating expenses 265,899 55,734

799,129 165,660


DATA PER SERIES










* Beginning of operations in October 2015.The accompanying Notes are an integral part of these financial statements.

Income

DFS GIF – CANADIAN BOND (cont.)



STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERSPeriods Ended December 31

2016 (12 months)

$

2015* (3 months)

$

NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 41,173,371 —Increase (Decrease) in Net Assets


PremiumsSeries 5 3,809,938 39,915,913Series 6 3,862,779 2,596,812Series 7 13,423 154,948

7,686,140 42,667,673

WithdrawalsSeries 5 (7,911,331) (1,785,192)Series 6 (927,429) (67,052)Series 7 (626) (148)

(8,839,386) (1,852,392)

NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 40,038,070 41,173,371




(12 months)$

2015* (3 months)



Adjustments for:Net realized gain (loss) (232,642) (151,068)Net unrealized gain (loss) 499,642 (108,110)Non-cash distribution from investments (1,071,082) (264,589)

Proceeds from sale/maturity of investments 5,287,903 995,716

Investments purchased (3,336,796) (41,757,936)Receivable for securities sold (3,925) (54,840)Accrued expenses (3,742) 66,808

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES 1,157,303 (40,915,929)


NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES (1,136,810) 40,901,666


Cash (bank overdraft), beginning of period (14,263) —

CASH (BANK OVERDRAFT), END OF PERIOD 6,230 (14,263)





Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)DGIA Canadian Bond Fund 3,979,781 40,530,493 40,138,962



NET ASSETS (100%) 40,038,070




Canada Housing Trust, 1 .25%, June 15, 2021 6 .8%Province of Ontario, 2 .60%, June 2, 2025 4 .1%Province of Ontario, 2 .10%, September 8, 2019 4 .0%Canada Housing Trust, 2 .00%, December 15, 2019 3 .8%NHA MBS Merrill Lynch, 1 .35%, May 1, 2020 3 .1%Government of Canada, 1 .50%, June 1, 2026 2 .6%Financement-Québec, 2 .45%, December 1, 2019 2 .6%Province of Ontario, 2 .85%, June 2, 2023 2 .5%Canada Housing Trust, 2 .90%, June 15, 2024 2 .4%Government of Canada, 5 .00%, June 1, 2037 2 .3%NHA Laurentian Bank of Canada, 1 .30%, October 1, 2021 2 .2%Province of Ontario, 6 .50%, March 8, 2029 2 .1%Province of Ontario, 3 .15%, June 2, 2022 1 .8%Scotiabank, 1 .33%, May 1, 2018 1 .8%Province of Quebec, 3 .50%, December 1, 2045 1 .7%Toronto-Dominion Bank, 2 .447%, April 2, 2019 1 .7%Canada Housing Trust, 2 .40%, December 15, 2022 1 .6%Province of Ontario, 4 .65%, June 2, 2041 1 .6%Royal Bank of Canada, 1 .92%, July 17, 2020 1 .5%Government of Canada, 2 .75%, December 1, 2048 1 .5%Province of British Columbia, 2 .80%, June 18, 2048 1 .3%Government of Canada, 5 .75%, June 1, 2029 1 .3%Province of Quebec, 3 .75%, September 1, 2024 1 .3%Canadian Imperial Bank of Commerce, 2 .35%, June 24, 2019 1 .2%Province of Ontario, 2 .90%, December 2, 2046 1 .2%

Income






Investment ObjectiveTo provide regular income and capital security by investing in a portfolio of fixed-income securities from the Canadian bond market .

Investment StrategyThis Fund, actively managed, aims to provide regular income and capital security by investing in a portfolio of fixed-income securities from the Canadian bond market . The Fund employs a fundamental investment approach targeting a consistent allocation of value added sources . The strategy seeks to add value through management of duration, yield curve and credit risk .



Investment Measured at Fair Value at the End of the Period, within the Following Levels:


Level 2$

Level 3$

Total$

Financial Assets at FVTPLInvestment Funds — 40,138,962 — 40,138,962TOTAL — 40,138,962 — 40,138,962


Level 2$

Level 3$

Total$


Transfers between Levels 1 and 2During the periods ended December 31, 2016 and 2015, there were no transfers of securities between Levels 1 and 2 .












%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe 1 .00 400,381 411,734




Income




The following table shows selected key financial information about the Fund and is intended to help you understand the Fund’s financial performance for the past two years . This information is derived from the Fund’s audited annual financial statements .

Net Assets and Net Asset Value Per Unit as at December 31st ($) 2016 2015*

Series 5 5.04 5 .04Series 6 5.05 5 .05Series 7 5.08 5 .05


Series 5 34,427 38,465Series 6 5,441 2,552Series 7 170 156

Number of units outstanding (000)Series 5 6,829 7,626Series 6 1,076 506Series 7 34 31

Management expense ratio (MER)1 (%)Series 5 1.96 1 .96Series 6 1.77 1 .75Series 7 1.22 1 .32

Portfolio turnover rate2 (%) 10.91 2 .80





Balanced and Asset Allocation

DFS GIF – DIVERSIFIED INCOME – FRANKLIN QUOTENTIAL*





Security Names Percentage of Portfolio

Franklin Bissett Core Plus Bond Fund 24 .4%Franklin Strategic Income Fund 9 .9%Franklin Bissett Canadian Short Term Bond Fund 9 .7%Templeton Global Bond Fund 8 .9%Cash and Cash Equivalents 7 .7%Franklin Bissett Canadian Dividend Fund 5 .3%iShares TIPS Bond ETF 4 .1%Franklin U .S . Rising Dividends Fund 3 .7%Franklin Bissett Canadian Governement Fund 3 .3%iShares Intermediate Credit Bond ETF 2 .6%


Series 3 Series 3 Series 5 Series 5 Series 6 Series 6 Series 7 Series 7









1 Year 10,080 0 .8% 10,103 1 .0% 10,122 1 .2% 10,174 1 .7%3 Years 10,697 2 .3% 10,768 2 .5% — — — —5 Years 11,822 3 .4% 11,952 3 .6% — — — —10 Years 13,083 2 .7% — — — — — —Since Inception 14,587 2 .4% 13,537 3 .4% 10,563 1 .9% 10,717 2 .5%





$2015



200,497,355 201,217,340LIABILITIESCurrent LiabilitiesBank overdraft — 37,246Accrued expenses 476,436 480,766Withdrawals payable 506,981 246,484Payable for securities purchased 99,805 104,011

1,083,222 868,507NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 199,414,133 200,348,833

NET ASSETS PER UNITSeries 3 7.29 7 .24Series 5 7.44 7 .36Series 6 5.28 5 .22Series 7 5.36 5 .27




$2015

$INCOMEDividends 3,261,100 3,936,151Changes in fair value:

Net realized gain (loss) on investments 4,816,376 10,947,671Net unrealized gain (loss) on investments (93,603) (5,289,596)

7,983,873 9,594,226EXPENSESManagement fees and guarantee charge 4,630,175 4,535,987Operating expenses 1,083,571 1,113,891

5,713,746 5,649,878Withholding taxes 155,281 151,411

5,869,027 5,801,289

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 2,114,846 3,792,937

DATA PER SERIES





from Operations 1,642,995 3,584,536- per unit 0.07 0 .15






from Operations 46,977 (163)- per unit 0.08 —






$2015

$


from operations attributable to contract owners 2,114,846 3,792,937

PremiumsSeries 3 1,148,716 1,147,562Series 5 15,145,898 22,791,206Series 6 12,881,179 14,827,674Series 7 1,258,484 2,502,588

30,434,277 41,269,030

WithdrawalsSeries 3 (1,896,086) (1,530,887)Series 5 (28,182,037) (27,964,661)Series 6 (3,221,098) (1,940,969)Series 7 (184,602) (5,839)

(33,483,823) (31,442,356)




$2015



Adjustments for:Net realized gain (loss) (4,816,376) (10,947,671)Net unrealized gain (loss) 93,603 5,289,596Non-cash distribution from investments (3,105,819) (3,784,740)


Investments purchased (9,924,682) (19,211,471)Receivable for securities sold (84,252) 10,233Accrued expenses (4,330) 30,413Payable for securities purchased (4,206) (5,785)


CASH FLOWS FROM (USED IN) FINANCING ACTIVITIESPremium payments 30,392,618 41,283,084 Amounts paid on withdrawals (33,223,326) (31,484,282)




CASH (BANK OVERDRAFT), END OF YEAR 40,306 (37,246)


DFS GIF – DIVERSIFIED INCOME – FRANKLIN QUOTENTIAL (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.4%)Franklin Quotential Diversified Income Portfolio 27,457,215 173,376,768 200,163,092



NET ASSETS (100%) 199,414,133


TOP HOLDINGS OF THE UNDERLYING FUND – unaudited


Franklin Bissett Core Plus Bond Fund 24 .4%Franklin Strategic Income Fund 9 .9%Franklin Bissett Canadian Short Term Bond Fund 9 .7%Templeton Global Bond Fund 8 .9%Cash and Cash Equivalents 7 .7%Franklin Bissett Canadian Dividend Fund 5 .3%iShares TIPS Bond ETF 4 .1%Franklin U .S . Rising Dividends Fund 3 .7%Franklin Bissett Canadian Governement Fund 3 .3%iShares Intermediate Credit Bond ETF 2 .6%Franklin Bisset All Canadian Focus Fund 2 .2%Franklin Global Listed Infrastructure Fund 2 .0%S&P Depositary Receipt Gold Trust ETF 2 .0%Franklin U .S . Core Equity Fund 2 .0%Franklin Mutual European Fund 2 .0%BMO Mid Federal Bond Index ETF 1 .8%Franklin Global Real Estate Fund 1 .5%Templeton Emerging Markets Fund 1 .5%PowerShares Senior Loan Portfolio ETF 1 .4%iShares S&P/TSX 60 Index ETF 1 .3%Franklin Japan Fund 1 .0%iShares MSCI Japan ETF 0 .9%BMO MSCI Europe High Quality Hedged to CAD Index ETF 0 .8%





Investment ObjectiveTo provide a balance of capital growth and interest income by investing primarily in units of an underlying fund in order to gain the desired exposure to the equity and fixed income markets .

Investment StrategyTo emphasize investments in fixed income underlying funds in order to provide income and capital preservation . The Fund also invests, to a lesser extent, in equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon .





Level 2$

Level 3$

Total$

Financial Assets at FVTPLInvestment Funds 200,163,092 — — 200,163,092 TOTAL 200,163,092 — — 200,163,092


Level 2$

Level 3$

Total$














Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .


%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (55%) 1 .00 1,220,923 1,177,847Bloomberg Barclays Multiverse Bond (25%)* 1 .00 554,965 535,385S&P/TSX (15%) 3 .00 998,937 963,693MSCI All Country World Net (5%) 3 .00 332,979 321,231

* On August 24, 2016, “Barclays Capital” was renamed “Bloomberg Barclays” .When there is more than one benchmark, the effect of each benchmark must be considered individually, as each benchmark might fluctuate independently from the others .In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .







The following table shows selected key financial information about the Fund and is intended to help you understand the Fund’s financial performance for the past five years . This information is derived from the Fund’s audited annual financial statements .

Net Assets and Net Asset Value Per Unit as at December 31st ($) 2016* 2015* 2014* 2013* 2012

Series 3 7.29 7 .24 7 .11 6 .82 6 .52Series 5 7.44 7 .36 7 .22 6 .91 6 .59Series 6 5.28 5 .22 5 .10 — —Series 7 5.36 5 .27 5 .13 — —


Series 3 5,643 6,349 6,610 6,977 6,893Series 5 159,398 170,791 172,380 173,963 167,962Series 6 30,636 20,592 7,619 — —Series 7 3,737 2,616 120 — —

Number of units outstanding (000)Series 3 774 878 930 1,023 1,058Series 5 21,424 23,191 23,884 25,177 25,480Series 6 5,801 3,947 1,494 — —Series 7 697 497 23 — —

Management expense ratio (MER)1 (%)Series 3 3.14 3 .13 3 .14 3 .15 2 .80Series 5 2.91 2 .92 2 .92 2 .92 2 .60Series 6 2.71 2 .68 2 .72 — —Series 7 2.20 2 .27 2 .30 — —







DFS GIF – BALANCED INCOME – FRANKLIN QUOTENTIAL*





Franklin Bissett Core Plus Bond Fund 27 .9%Franklin Strategic Income Fund 7 .4%Templeton Global Bond Fund 6 .4%Franklin Bissett Canadian Equity Fund 4 .3%Franklin U .S . Rising Dividends Fund 4 .0%iShares TIPS Bond ETF 3 .9%Franklin U .S . Core Equity Fund 3 .7%Franklin Bisset All Canadian Focus Fund 3 .4%Franklin Mutual European Fund 2 .8%Franklin U .S . Opportunities Fund 2 .7%

















$2015



253,180,860 259,973,049LIABILITIESCurrent LiabilitiesBank overdraft 9,852 12,448Accrued expenses 614,329 630,536Withdrawals payable 704,383 295,171Payable for securities purchased 4,329 114,512

1,332,893 1,052,667NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 251,847,967 258,920,382





$2015


Net realized gain (loss) on investments 12,127,098 18,890,498Net unrealized gain (loss) on investments (5,603,172) (6,281,089)

10,476,990 17,653,062EXPENSESManagement fees and guarantee charge 5,946,948 6,085,794Operating expenses 1,435,857 1,526,503


7,641,420 7,942,284


DATA PER SERIES














DFS GIF – BALANCED INCOME – FRANKLIN QUOTENTIAL (cont.)




2016$

2015$



PremiumsSeries 3 862,723 1,013,502Series 5 17,954,598 18,438,082Series 6 9,733,502 12,149,558Series 7 1,226,532 3,936,749

29,777,355 35,537,891

WithdrawalsSeries 3 (2,120,497) (1,948,513)Series 5 (32,718,474) (34,334,425)Series 6 (2,812,251) (871,710)Series 7 (2,034,118) (45,192)

(39,685,340) (37,199,840)




$2015



Adjustments for:Net realized gain (loss) (12,127,098) (18,890,498)Net unrealized gain (loss) 5,603,172 6,281,089Non-cash distribution from investments (3,694,449) (4,713,666)


Investments purchased (6,817,683) (11,528,400)Receivable for securities sold (325,834) 34,226Accrued expenses (16,207) 16,378Payable for securities purchased (110,183) 106,707





Cash (bank overdraft), beginning of year (12,448) 31,643





Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)Franklin Quotential Balanced Income Portfolio 26,568,524 200,922,874 252,666,664



NET ASSETS (100%) 251,847,967




Franklin Bissett Core Plus Bond Fund 27 .9%Franklin Strategic Income Fund 7 .4%Templeton Global Bond Fund 6 .4%Franklin Bissett Canadian Equity Fund 4 .3%Franklin U .S . Rising Dividends Fund 4 .0%iShares TIPS Bond ETF 3 .9%Franklin U .S . Core Equity Fund 3 .7%Franklin Bisset All Canadian Focus Fund 3 .4%Franklin Mutual European Fund 2 .8%Franklin U .S . Opportunities Fund 2 .7%Franklin Templeton Canadian Large Cap Fund 2 .5%Franklin Bissett Canadian Governement Fund 2 .3%iShares Intermediate Credit Bond ETF 2 .1%S&P Depositary Receipt Gold Trust ETF 2 .0%iShares Russell 1000 Value ETF 2 .0%Franklin Japan Fund 1 .9%Templeton Asian Growth Fund 1 .8%iShares MSCI Japan ETF 1 .7%Franklin Bissett Small Cap Fund 1 .7%PowerShares Senior Loan Portfolio ETF 1 .1%BMO MSCI Europe High Quality Hedged to CAD Index ETF 1 .1%BMO Mid Federal Bond Index ETF 1 .0%Templeton Emerging Markets Smaller Companies Fund 0 .9%S&P Depositary Receipt EURO STOXX 50 ETF 0 .8%iShares S&P/TSX 60 Index ETF 0 .8%







Investment ObjectiveTo provide a balance of capital growth and interest income by investing primarily in units of an individual underlying fund in order to gain the desired exposure to the equity and fixed income markets .

Investment StrategyTo invest in fixed income underlying funds in order to provide income and capital preservation . The Fund also invests in equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (45%) 1 .00 1,340,927 1,279,171Bloomberg Barclays Multiverse Bond (15%)* 1 .00 446,976 426,390S&P/TSX (20%) 3 .00 1,787,902 1,705,561MSCI All Country World Net (20%) 3 .00 1,787,902 1,705,561* On August 24, 2016, “Barclays Capital” was renamed “Bloomberg Barclays” .When there is more than one benchmark, the effect of each benchmark must be considered individually, as each benchmark might fluctuate independently from the others .In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .











Series 3 8,650 9,846 10,400 10,967 11,850Series 5 215,069 227,546 234,342 233,894 223,830Series 6 23,360 16,024 4,616 — —Series 7 4,770 5,504 1,515 — —

Number of units outstanding (000)Series 3 1,287 1,478 1,617 1,803 2,121Series 5 31,189 33,382 35,692 37,751 39,436Series 6 4,289 2,981 893 — —Series 7 865 1,016 292 — —








DFS GIF – CANADIAN BALANCED – FIDELITY*






Royal Bank of Canada 4 .9%Toronto-Dominion Bank 3 .7%Restaurant Brands International 2 .7%Scotiabank 2 .6%Canadian Pacific Railway 2 .6%Enbridge 2 .1%Sun Life Financial 1 .9%Canadian Natural Resources 1 .7%Waste Connections 1 .5%Brookfield Asset Management 1 .4%











1 Year 10,411 4 .1% 10,454 4 .5% 10,468 4 .7% 10,522 5 .2%3 Years 11,674 5 .3% 11,825 5 .7% — — — —5 Years 13,622 6 .4% 13,900 6 .8% — — — —Since Inception 18,653 8 .0% 19,244 8 .4% 11,463 4 .9% 11,620 5 .4%





$2015

$ASSETSCurrent AssetsCash — 102,954Investments at fair value through profit


880,124,622 883,541,089LIABILITIESCurrent LiabilitiesBank overdraft 137,055 —Accrued expenses 2,163,067 2,169,456Withdrawals payable 2,036,216 1,356,538Payable for securities purchased 19,774 610,271






$2015

$INCOMEInterest for attribution purposes 1,236,995 2,102,512Dividends 23,750,288 21,500,951Changes in fair value: Net realized gain (loss)

on investments 60,236,122 83,360,750 Net unrealized gain (loss)

on investments (20,540,064) (55,997,599)64,683,341 50,966,614

EXPENSESManagement fees and guarantee charge 20,772,117 21,576,240Operating expenses 5,052,305 5,312,352


26,071,821 27,122,298


DATA PER SERIES








from Operations 1,370,618 (179,117)- per unit 0.26 (0 .06)



from Operations 65,251 (8,828)- per unit 0.27 (0 .06)





2016$

2015$



PremiumsSeries 3 2,259,276 2,591,373Series 5 85,809,811 86,012,903Series 6 13,462,909 23,196,679Series 7 926,248 906,865

102,458,244 112,707,820


(144,706,078) (138,744,333)




$2015









Increase (Decrease) in cash/bank overdraft (240,009) (1,500)


CASH (BANK OVERDRAFT), END OF YEAR (137,055) 102,954



DFS GIF – CANADIAN BALANCED – FIDELITY (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)Fidelity Canadian Balanced Fund, Series O 39,269,995 757,763,944 878,642,563


OTHER NET ASSETS (-0.3%) (2,874,053)

NET ASSETS (100%) 875,768,510




Royal Bank of Canada 4 .9%Toronto-Dominion Bank 3 .7%Restaurant Brands International 2 .7%Scotiabank 2 .6%Canadian Pacific Railway 2 .6%Enbridge 2 .1%Sun Life Financial 1 .9%Canadian Natural Resources 1 .7%Waste Connections 1 .5%Brookfield Asset Management 1 .4%EOG Resources 1 .3%Constellation Software 1 .2%Suncor Energy 1 .2%Morgan Stanley 1 .0%CGI Group 1 .0%Manulife Financial Corporation 1 .0%Alimentation Couche-Tard 1 .0%Methanex Corporation 0 .9%ARC Resources 0 .9%National Bank of Canada 0 .9%Bank of America Corporation 0 .9%Province of Ontario, 3 .15%, June 2, 2022 0 .9%First Quantum Minerals 0 .9%Province of Ontario, 4 .20%, June 2, 2020 0 .8%Ball Corporation 0 .8%







Investment ObjectiveTo achieve high total investment return using a diversified portfolio targeting long-term capital appreciation and a regular income stream through investment in any kind of equity or fixed-income security or money market instrument . The fundamental investment objective of the Fund is to provide investors with a balanced asset mix with the potential for capital growth .

Investment StrategyTarget fixed asset allocation to deliver superior long-term growth potential and reduced levels of risk . The Fund invests primarily in a mix of Canadian equity securities, investment grade bonds, high yield securities and money market instruments . The equity investment decisions are based on a thorough examination of the company, financial conditions and long-term earnings potential .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (40%) 1 .00 3,492,586 3,477,627Merrill Lynch High Yield Master II (10%) 2 .00 1,746,293 1,738,814S&P/TSX Capped (50%) 3 .00 13,097,197 13,041,103













Number of units outstanding (000)Series 3 1,173 1,206 1,132 1,152 1,335Series 5 85,995 91,416 96,289 103,238 109,001Series 6 6,218 4,736 1,482 — —Series 7 302 234 77 — —








DFS GIF – U.S. MONTHLY INCOME – FIDELITY*






JPMorgan Chase & Company 1 .7%Freddie Mac, 3 .50%, 30 Year 1 .3%Williams Companies 1 .2%Cisco Systems 1 .2%General Electric Company 1 .1%U .S . Treasury Note, 1,25 %, October 31, 2021 1 .1%U .S . Treasury Note, 1 .25%, March 31, 2021 1 .0%U .S . Treasury Note, 0 .375%, July 15, 2025 1 .0%Chevron Corporation 1 .0%Procter & Gamble Company 1 .0%















$2015


or loss (FVTPL) 9,226,163 2,641,839Premiums receivable 113,114 34,992Receivable for securities sold 14,695 —

9,353,972 2,688,168LIABILITIESCurrent LiabilitiesBank overdraft 14,695 —Accrued expenses 21,190 5,288Withdrawals payable 34,741 393Payable for securities purchased 41,570 46,330






(12 months)$

2015* (3 months)

$INCOMEInterest for attribution purposes — 12,544Dividends 262,269 14,035Changes in fair value: Net realized gain (loss)

on investments (3,277) 111,142 Net unrealized gain (loss)

on investments 451,729 (62,342)710,721 75,379

EXPENSESManagement fees and guarantee charge 178,199 7,801Operating expenses 14,851 661


225,268 10,431


DATA PER SERIES












DFS GIF – U.S. MONTHLY INCOME – FIDELITY (cont.)




2016 (12 months)

$

2015* (3 months)

$



PremiumsSeries 5 2,668,804 650,588Series 6 4,046,860 1,693,215Series 7 675,257 229,884

7,390,921 2,573,687

WithdrawalsSeries 5 (517,878) (1,934)Series 6 (463,906) (544)Series 7 (288,971) —

(1,270,755) (2,478)



STATEMENT OF CASH FLOWSPeriods Ended December 31

2016 (12 months)

$

2015* (3 months)



Adjustments for:Net realized gain (loss) 3,277 (111,142)Net unrealized gain (loss) (451,729) 62,342Non-cash distribution from investments (230,051) (24,610)

Proceeds from sale/maturity of investments 617,085 —

Investments purchased (6,522,906) (2,568,429)Receivable for securities sold (14,695) —Accrued expenses 15,902 5,288Payable for securities purchased (4,760) 46,330


CASH FLOWS FROM (USED IN) FINANCING ACTIVITIESPremium payments 7,312,799 2,538,695Amounts paid on withdrawals (1,236,407) (2,085)



Cash (bank overdraft), beginning of period 11,337 —

CASH (BANK OVERDRAFT), END OF PERIOD (14,695) 11,337






Cost

$

Fair Value

$

INVESTMENT FUNDS (99.8%)Fidelity U .S . Monthly Income Fund, Series O 395,643 8,836,777 9,226,163



NET ASSETS (100%) 9,241,776




JPMorgan Chase & Company 1 .7%Freddie Mac, 3 .50%, 30 Year 1 .3%Williams Companies 1 .2%Cisco Systems 1 .2%General Electric Company 1 .1%U .S . Treasury Note, 1,25 %, October 31, 2021 1 .1%U .S . Treasury Note, 1 .25%, March 31, 2021 1 .0%U .S . Treasury Note, 0 .375%, July 15, 2025 1 .0%Chevron Corporation 1 .0%Procter & Gamble Company 1 .0%iShares TIPS Bond ETF 1 .0%Johnson & Johnson 1 .0%U .S . Treasury Bill, 3 .00%, May 15, 2045 0 .8%Chubb 0 .8%Wells Fargo & Company 0 .8%Fannie Mae, 3 .00%, 30 Year 0 .7%M&T Bank Corporation 0 .7%US Bancorp 0 .7%CVS Health Corporation 0 .7%Verizon Communications 0 .7%United Technologies Corporation 0 .7%Bank of America Corporation 0 .7%Comcast Corporation 0 .7%Ginnie Mae, 3 .50%, 30 Year 0 .6%Qualcomm 0 .6%





Investment ObjectiveTo achieve a combination of a steady flow of income and the potential for capital gains by investing in a mix of U .S . income-producing securities .

Investment StrategyThe Fund invests primarily in a mix of U .S . income-producing securities, either directly or indirectly through investments in underlying funds . The Fund’s neutral mix is 50% exposure to equity securities and 50% exposure to fixed-income securities . These securities may be U .S . securities or non-U .S . securities but at least 70% of the Fund’s net assets will be invested in U .S . dollar-denominated investments .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$
















%


December 31, 2016$


December 31, 2015$

Bloomberg Barclays U .S . Aggregate Bond (31%)* 1 .50 42,974 12,258

Bank of America ML all US Convertibles (5%) 1 .50 6,931 1,977Bank of America ML High Yield Master II

Constrained (12%) 2 .00 22,180 6,327JP Morgan EMBI Global Diversified (5%) 2 .00 9,242 2,636Russell 3000 Value (40%) 3 .00 110,901 31,634FTSE NAREIT Equity REITs (7%) 3 .00 19,408 5,536





FINANCIAL HIGHLIGHTS — UNAUDITED





Series 5 2,966 664Series 6 5,614 1,732Series 7 662 240

Number of units outstanding (000)Series 5 535 126Series 6 1,013 328Series 7 119 45








DFS GIF – BALANCED – DESJARDINS SOCIETERRA*






Desjardins SocieTerra Canadian Bond Fund 47 .4%NEI Ethical Canadian Equity Fund 12 .5%Desjardins SocieTerra American Equity Fund 11 .7%NEI Ethical International Equity Fund 10 .8%Desjardins SocieTerra Environment Fund 7 .5%Desjardins SocieTerra Environmental Bond Fund 5 .3%NEI Ethical Special Equity Fund 2 .8%Desjardins SocieTerra Cleantech Fund 1 .6%Cash and Cash Equivalents 0 .4%















$2015


or loss (FVTPL) 15,688,599 8,142,045Premiums receivable 1,091 109,603Receivable for securities sold — 349

15,699,275 8,251,997LIABILITIESCurrent LiabilitiesBank overdraft — 355Accrued expenses 34,371 18,806Withdrawals payable 11,887 6,385Payable for securities purchased 10,548 13,507






(12 months)$

2015* (3 months)

$INCOMEDividends 257,841 18,870Changes in fair value: Net realized gain (loss)

on investments 3,310 662,294 Net unrealized gain (loss)

on investments 391,075 (507,386)652,226 173,778


319,590 45,976


DATA PER SERIES














2016 (12 months)

$

2015* (3 months)

$



PremiumsSeries 5 908,130 7,112,836Series 6 6,549,104 1,125,320Series 7 1,375,603 20,232

8,832,837 8,258,388

WithdrawalsSeries 5 (1,004,817) (171,342)Series 6 (688,303) (1,904)Series 7 (42,828) —

(1,735,948) (173,246)



STATEMENT OF CASH FLOWSPeriods Ended December 31

2016 (12 months)

$

2015* (3 months)





Investments purchased (7,721,310) (8,078,151)Receivable for securities sold 349 (349)Accrued expenses 15,565 18,806Payable for securities purchased (2,959) 13,507


CASH FLOWS FROM (USED IN) FINANCING ACTIVITIESPremium payments 8,941,349 8,148,785Amounts paid on withdrawals (1,730,446) (166,861)


Increase (Decrease) in cash/bank overdraft 9,940 (355)

Cash (bank overdraft), beginning of period (355) —

CASH (BANK OVERDRAFT), END OF PERIOD 9,585 (355)


DFS GIF – BALANCED – DESJARDINS SOCIETERRA (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)SocieTerra Balanced Portfolio, I-Class 1,628,800 15,804,911 15,688,599



NET ASSETS (100%) 15,642,469




Desjardins SocieTerra Canadian Bond Fund 47 .4%NEI Ethical Canadian Equity Fund 12 .5%Desjardins SocieTerra American Equity Fund 11 .7%NEI Ethical International Equity Fund 10 .8%Desjardins SocieTerra Environment Fund 7 .5%Desjardins SocieTerra Environmental Bond Fund 5 .3%NEI Ethical Special Equity Fund 2 .8%Desjardins SocieTerra Cleantech Fund 1 .6%Cash and Cash Equivalents 0 .4%







Investment ObjectiveTo achieve a balance between long-term capital appreciation and income by investing primarily in Canadian, and to a lesser extent, foreign equity and fixed-income securities and/or in units of mutual funds which themselves invest primarily in Canadian or foreign equity and fixed-income securities . The Fund follows a socially responsible approach to investing .

Investment StrategyTo reach the Fund’s investment objective, selection of the securities and/or the underlying funds as well as the percentage of the assets that will be invested in each of these securities or underlying funds will be based on the following target weightings: Fixed-income (55%) and Growth (45%) .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (55%) 1 .00 86,034 45,171S&P/TSX (14%) 3 .00 65,698 34,494MSCI World Net (31%) 3 .00 145,475 76,380












Series 5 7,124 7,056Series 6 7,139 1,136Series 7 1,380 21

Number of units outstanding (000)Series 5 1,371 1,389Series 6 1,374 224Series 7 264 4








DFS GIF – GLOBAL BALANCED – JARISLOWSKY FRASER*






Jarislowsky Fraser International Pooled Fund 18 .5%Toronto-Dominion Bank 2 .0%Jarislowsky Fraser Special Equity Fund 1 .7%Province of Ontario, 2 .40%, June 2, 2026 1 .7%Royal Bank of Canada 1 .6%Scotiabank 1 .4%Enbridge 1 .2%Canadian Natural Resources 1 .1%Microsoft Corporation 1 .1%Canadian National Railway Company 1 .0%


Series 3 Series 3 Series 5 Series 5 Series 6** Series 6** Series 7** Series 7**











Series 3 Series 5 Series 6** Series 7**




$2015









$2015

$INCOMEInterest for attribution purposes 2,479,988 1,810,243Dividends 3,438,148 2,708,739Changes in fair value:

Net realized gain (loss) on investments 7,996,641 11,824,467Net unrealized gain (loss) on investments 268,163 (1,164,405)

14,182,940 15,179,044



6,629,733 5,037,392


DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets






SERIES 6*Increase (Decrease) in Net Assets








DFS GIF – GLOBAL BALANCED – JARISLOWSKY FRASER (cont.)



2016$

2015$



PremiumsSeries 3 1,284,309 2,880,260Series 5 38,200,658 58,363,706Series 6* 26,374,106 7,901,781Series 7* 4,087,605 596,583

69,946,678 69,742,330

WithdrawalsSeries 3 (2,085,661) (1,557,555)Series 5 (37,615,906) (26,424,518)Series 6* (3,052,621) (29,627)Series 7* (419,970) (265)

(43,174,158) (28,011,965)



STATEMENT OF CASH FLOWSYears Ended December 31

2016$

2015$

CASH FLOWS FROM (USED IN) OPERATING ACTIVITIESIncrease (Decrease) in Net Assets


Adjustments for:Net realized gain (loss) (7,996,641) (11,824,467)Net unrealized gain (loss) (268,163) 1,164,405Non-cash distribution from investments (5,636,314) (4,302,745)

Proceeds from sale/maturity of,investments 12,849,758 11,300,138

Investments purchased (33,842,297) (47,833,903)Accrued expenses 76,845 117,527Payable for securities purchased 617,122 (117,939)













Cost

$

Fair Value

$

INVESTMENT FUNDS (100.1%)Jarislowsky Fraser Global Balanced Fund 18,101,340 202,706,806 238,765,804



NET ASSETS (100%) 238,582,179




Jarislowsky Fraser International Pooled Fund 18 .5%Toronto-Dominion Bank 2 .0%Jarislowsky Fraser Special Equity Fund 1 .7%Province of Ontario, 2 .40%, June 2, 2026 1 .7%Royal Bank of Canada 1 .6%Scotiabank 1 .4%Enbridge 1 .2%Canadian Natural Resources 1 .1%Microsoft Corporation 1 .1%Canadian National Railway Company 1 .0%Manulife Financial Corporation 0 .9%Canada Housing Trust, 1 .20%, June 15, 2020 0 .8%Government of Canada, Floating Rate, December 1, 2047 0 .8%Government of Canada, 3 .50%, December 1, 2045 0 .8%Open Text Corporation 0 .8%Alimentation Couche-Tard 0 .8%Canadian Imperial Bank of Commerce, 1 .70%, October 9, 2018 0 .8%Berkshire Hathaway 0 .7%JPMorgan Chase & Company 0 .7%Province of Ontario, 2 .85%, June 2, 2023 0 .7%Comcast Corporation 0 .7%Bank of Montréal, 2 .12%, March 16, 2022 0 .7%National Bank of Canada, 2 .794%, August 9, 2018 0 .7%Alphabet 0 .7%Walgreens Boots Alliance 0 .7%





Investment ObjectiveTo provide investors with an opportunity to achieve a high rate of return by investing in a diversified portfolio consisting of a balance of equity and fixed-income securities of issuers located throughout the world .

Investment StrategyTo provide such an opportunity through a diversified portfolio consisting of a balance of mainly large cap equity and mainly investment grade fixed-income securities of issuers located throughout the world .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$
















%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada 91 Day Treasury Bills (6%) 0 .25 37,932 31,196FTSE TMX Canada Universe (40%) 1 .00 1,011,519 831,884S&P/TSX (22%) 3 .00 1,669,006 1,372,609S&P 500 (16%) 3 .00 1,213,823 998,261MSCI EAFE Net (16%) 3 .00 1,213,823 998,261







Net Assets and Net Asset Value Per Unit as at December 31st ($) 2016** 2015** 2014** 2013** 2012

Series 3 8.22 8 .02 7 .60 7 .02 6 .10Series 5 8.60 8 .35 7 .87 7 .23 6 .25Series 6* 5.29 5 .12 — — —Series 7* 5.31 5 .13 — — —


Series 3 9,346 9,915 8,104 8,869 9,120Series 5 192,371 185,784 144,280 135,404 111,607Series 6* 32,488 7,957 — — —Series 7* 4,377 600 — — —

Number of units outstanding (000)Series 3 1,137 1,236 1,066 1,263 1,495Series 5 22,370 22,251 18,342 18,719 17,850Series 6* 6,145 1,553 — — —Series 7* 824 117 — — —

Management expense ratio (MER)1 (%)Series 3 3.39 3 .40 3 .40 3 .40 3 .00Series 5 2.85 2 .85 2 .86 2 .86 2 .55Series 6* 2.63 2 .59 — — —Series 7* 2.24 2 .24 — — —


** For the period beginning on or after January 1, 2013, financial information is shown in accordance with IFRS, while for the years’ ended December 31, 2012 and prior, financial information is shown in accordance with GAAP.






DFS GIF – CANADIAN BALANCED – FIERA CAPITAL*






Fiera Global Equity Fund 20 .3%Canada Treasury Bills, March 9, 2017 5 .1%Royal Bank of Canada 4 .0%Toronto-Dominion Bank 3 .9%Scotiabank 3 .2%Government of Canada, 0 .25%, May 1, 2018 2 .8%Canadian Natural Resources 2 .4%Manulife Financial Corporation 2 .3%CGI Group 2 .3%Canadian National Railway Company 1 .9%













1 Year 10,532 5 .3% 10,597 6 .0% 10,661 6 .6% 10,656 6 .6% 10,706 7 .1%3 Years 11,523 4 .8% 11,738 5 .5% 11,961 6 .2% — — — —5 Years 13,030 5 .4% 13,431 6 .1% 13,820 6 .7% — — — —10 Years 11,965 1 .8% 12,674 2 .4% — — — — — —Since Inception 20,176 3 .4% 17,710 3 .2% 13,075 3 .0% 11,602 5 .4% 11,766 5 .9%





$2015


or loss (FVTPL) 157,480,174 161,011,034Investments at fair value through profit

or loss (FVTPL) pledged as collateral 27,680,152 21,876,504Premiums receivable 320,025 64,188Receivable for securities sold 923,434 2,346,923Cash guarantee received for repurchase

transactions 13,316,482 5,685,138Interest, dividends and other receivables 344,050 379,735

200,064,317 191,363,522LIABILITIESCurrent LiabilitiesBank overdraft 52,020 785Accrued expenses 403,497 410,645Withdrawals payable 441,040 67,850Payable for securities purchased 1,171,869 —Commitments related to repurchase

transactions 13,316,482 5,685,13815,384,908 6,164,418


NET ASSETS PER UNITSeries 1 10.09 9 .58Series 3 11.16 10 .53Series 5 11.78 11 .05Series 6 5.80 5 .44Series 7 5.88 5 .50




$2015

$INCOMEInterest for attribution purposes 1,316,490 1,514,193Dividends 3,141,981 2,941,033Revenue from securities lending and

repurchase transactions 17,601 21,334Foreign exchange gain (loss) on cash 1,690 10,554Changes in fair value:

Net realized gain (loss) on investments 8,534,276 9,540,425Net unrealized gain (loss) on investments 3,488,247 (5,008,855)

16,500,285 9,018,684


4,786,719 5,159,794Withholding taxes 125,220 115,489Commissions and other portfolio

transaction costs 240,181 137,0165,152,120 5,412,299




















2016$

2015$



PremiumsSeries 1 270,205 313,763Series 3 563,256 1,066,937Series 5 12,420,755 13,646,307Series 6 5,999,460 6,309,713Series 7 347,734 281,335

19,601,410 21,618,055

WithdrawalsSeries 1 (1,145,032) (1,867,231)Series 3 (3,379,193) (4,430,779)Series 5 (25,908,495) (26,593,356)Series 6 (1,023,185) (450,868)Series 7 (13,365) (63,261)

(31,469,270) (33,405,495)



2016$

2015$



Adjustments for:Foreign exchange gain (loss) on cash (1,690) (10,554)Net realized gain (loss) (8,534,276) (9,540,425)Net unrealized gain (loss) (3,488,247) 5,008,855 Non-cash distribution from investments (894,429) (824,913)


Investments purchased (353,390,993) (293,365,766)Receivable for securities sold 1,423,489 (1,799,689)Cash guarantee received for repurchase

transactions (7,631,344) 8,245,830 Interest, dividends and other receivables 35,685 (51,435)Accrued expenses (7,148) (15,019)Commitments related to repurchase

transactions 7,631,344 (8,245,830)Payable for securities purchased 1,171,869 (553,776)




Effect of exchange rate changes on foreign cash 1,084 5,371


Cash (bank overdraft), beginning of year (785) 77,260

CASH (BANK OVERDRAFT), END OF YEAR (52,020) (785)

SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES

Interest received 1,344,194 1,436,771Dividends received, net of

withholding taxes 2,123,043 1,931,447Interest paid — 95


DFS GIF – CANADIAN BALANCED – FIERA CAPITAL (cont.)



Schedule of Investment Portfolioas at December 31, 2016For ease of comprehension to the reader, for the DFS GIF – Income – Fiera Capital, the entire portfolio of securities in the Schedule of Investment Portfolio as at June 30, 2016, has not been disclosed . Instead, the major categories of assets are listed along with the percentages that each of these categories hold . The total costs, fair values, number of units, total investments and net assets are also listed .


Number Fair of Shares Cost Value $ $EQUITIES (48.9%)

Energy (12.2%)Canadian Natural Resources 105,094 4,054,814 4,496,972 Cenovus Energy 78,030 1,543,930 1,584,009 Enbridge* 54,486 2,892,578 3,078,459 Husky Energy* 87,917 1,384,985 1,432,168 Peyto Exploration & Development 49,142 1,588,136 1,632,006 Raging River Exploration 154,556 1,607,086 1,632,111 Seven Generations Energy 92,400 2,846,089 2,893,044 Spartan Energy 468,900 1,572,550 1,561,437 Suncor Energy 39,420 1,397,424 1,730,538 TransCanada* 40,382 1,926,331 2,444,726

20,813,923 22,485,470

Materials (5.4%)Agnico Eagle Mines 25,000 1,607,355 1,411,250 Agrium 13,389 1,658,510 1,806,979 CCL Industries, Class B 10,449 1,420,912 2,756,446 Detour Gold 55,121 1,448,249 1,008,163 First Quantum Minerals 121,273 1,273,055 1,618,995 Guyana Goldfields 234,463 2,127,215 1,434,914

9,535,296 10,036,747

Industrials (4.3%)Canadian National Railway Company 38,940 2,491,897 3,518,618 Canadian Pacific Railway 10,095 1,709,712 1,933,798 Waste Connections 23,521 2,005,008 2,477,702

6,206,617 7,930,118

Consumer Discretionary (4.6%)Dollarama 14,730 746,091 1,449,137 Gildan Activewear* 85,462 2,805,569 2,913,400 Magna International, Class A 43,627 2,173,670 2,543,454 Quebecor, Class B 43,115 1,459,869 1,609,052

7,185,199 8,515,043

Consumer Staples (1.9%)Alimentation Couche-Tard, Class B 37,251 1,841,675 2,267,841 Loblaw Companies 16,532 924,590 1,171,127

2,766,265 3,438,968

Health Care (0.2%)Valeant Pharmaceuticals International* 17,065 3,450,499 332,256

Financials (17.4%)Brookfield Asset Management, Class A 45,617 2,013,996 2,020,833 ECN Capital 181,641 559,490 599,415 Element Fleet Management Corporation 169,641 1,988,079 2,113,727 Intact Financial Corporation 14,930 1,274,186 1,434,773 Manulife Financial 178,993 3,620,819 4,279,723 Royal Bank of Canada 80,319 5,442,665 7,298,588






Number Fair of Shares Cost Value $ $Financials (cont.)

Scotiabank* 78,213 4,779,142 5,847,204 Sun Life Financial 27,600 1,196,752 1,422,780 Toronto-Dominion Bank 107,762 4,967,277 7,136,000

25,842,406 32,153,043

Information Technology (2.3%)CGI Group, Class A 65,153 3,327,012 4,198,459

Utilities (0.6%)Algonquin Power & Utilities Corp .* 98,726 1,111,372 1,124,489

TOTAL EQUITIES 80,238,589 90,214,593

Par ValueBONDS (20.3%)

Canadian Bonds (20.3%)

Government of Canada (5.1%)Broadcast Center Trust 7 .530%, 2027-05-01 CAD 198,363 214,979 254,936 Canada Housing Trust 2 .350%, 2018-12-15 CAD 488,000 511,188 501,535 Government of Canada 0 .250%, 2018-05-01* CAD 5,122,000 5,088,891 5,092,910 Series G401, 0 .500%, 2019-02-01 CAD 1,644,000 1,633,317 1,634,886 5 .750%, 2033-06-01* CAD 133,000 215,492 197,934 2 .750%, 2048-12-01 CAD 761,000 858,556 836,192 PSP Capital Series 7, 3 .290%, 2024-04-04 CAD 120,000 119,939 128,016 Royal Office Finance Series A, 5 .209%, 2032-11-12 CAD 711,440 705,399 854,938

9,347,761 9,501,347

Provincial Governments and Crown Corporations (7.9%)Ontario Infrastructure 4 .700%, 2037-06-01 CAD 70,000 70,093 81,545 Ontario School Boards Financing Corporation Series 00A1, 7 .200%, 2025-06-09 CAD 314,363 381,354 382,547 Series 04A1, 5 .483%, 2029-11-26 CAD 374,651 399,833 443,562 Private Placement, Series 06A1, 5 .070%, 2031-04-18 CAD 361,461 361,461 407,472 Province of British Columbia 3 .200%, 2044-06-18 CAD 206,000 190,344 207,566 2 .800%, 2048-06-18 CAD 212,000 201,081 198,136 Province of Ontario 4 .400%, 2019-06-02* CAD 651,000 734,099 701,114 4 .000%, 2021-06-02* CAD 24,000 26,238 26,426 3 .150%, 2022-06-02* CAD 1,322,000 1,348,465 1,410,568 2 .850%, 2023-06-02 CAD 2,171,000 2,137,575 2,274,802 3 .500%, 2024-06-02 CAD 950,000 1,006,992 1,031,757 2 .600%, 2025-06-02 CAD 848,000 880,012 861,729 2 .400%, 2026-06-02* CAD 251,000 257,777 249,187

*Securities pledged as collateral, in part or in whole, through the securities lending program.The accompanying Notes are an integral part of these financial statements.



Par Fair Value Cost Value $ $Provincial Governments and Crown Corporations (cont.)

3 .500%, 2043-06-02 CAD 24,000 22,362 25,099 2 .900%, 2046-12-02 CAD 791,000 766,426 741,379 2 .800%, 2048-06-02 CAD 1,071,000 1,003,991 986,165 Province of Québec 4 .500%, 2019-12-01 CAD 1,110,000 1,228,858 1,211,991 3 .500%, 2022-12-01* CAD 612,000 638,452 665,455 2 .750%, 2025-09-01* CAD 314,000 329,800 322,284 2 .500%, 2026-09-01 CAD 665,000 689,111 664,376 5 .750%, 2036-12-01* CAD 103,000 141,913 141,074 4 .250%, 2043-12-01 CAD 133,000 136,103 156,238 3 .500%, 2045-12-01 CAD 1,056,000 1,100,443 1,102,823 3 .500%, 2048-12-01 CAD 52,000 58,620 54,794 TCHC Issuer Trust 4 .877%, 2037-05-11 CAD 59,000 59,000 69,049 Series B, 5 .395%, 2040-02-22 CAD 110,000 112,200 139,614

14,282,603 14,556,752

Corporations (7.3%)Bank of Montreal 2 .390%, 2017-07-12 CAD 531,000 532,638 534,911 3 .340%, (floating rate from 2020-12-08), 2025-12-08 CAD 265,000 264,902 270,002 3 .320%, (floating rate from 2021-06-01), 2026-06-01 CAD 231,000 230,968 234,837 Blackbird Infrastructure 407 General Partners 1 .713%, (floating rate from 2020-01-08), 2021-10-08 CAD 77,000 76,400 76,166 British Columbia Ferry Services 5 .021%, 2037-03-20 CAD 70,000 70,000 82,965 Caisse centrale Desjardins 2 .443%, 2019-07-17 CAD 411,000 426,236 420,125 Canadian Imperial Bank of Commerce 2 .350%, 2017-10-18 CAD 672,000 676,989 678,669 3 .000%, (floating rate from 2019-10-28), 2024-10-28 CAD 30,000 30,534 30,269 3 .420%, (floating rate from 2021-01-26), 2026-01-26* CAD 217,000 217,795 221,194 Canadian Utilities 4 .543%, 2041-10-24 CAD 154,000 168,726 172,697 4 .722%, 2043-09-09 CAD 82,000 92,659 94,654 4 .085%, 2044-09-02 CAD 68,000 69,694 71,346 Capital City Link Series A, 4 .386%, 2046-03-31 CAD 182,000 181,662 186,503 Capital Desjardins Series G, 5 .187%, 2020-05-05 CAD 160,000 184,640 175,518 Cominar Real Estate Investment Trust Series 9, 4 .164%, 2022-06-01* CAD 245,000 245,000 249,770 Series 10, 4 .247%, 2023-05-23 CAD 129,000 129,183 130,436 CSS (FSCC) Partnership 6 .915%, 2042-07-31 CAD 34,683 46,405 45,943 CU 3 .763%, 2046-11-19 CAD 71,000 71,000 70,745 Enbridge 3 .940%, 2023-06-30* CAD 120,000 120,000 127,507 7 .200%, 2032-06-18 CAD 229,000 284,550 292,284 4 .570%, 2044-03-11* CAD 194,000 179,025 191,847 Grand Renewable Solar Series 1A, 3 .926%, 2035-01-31 CAD 102,558 102,558 101,631







Greater Toronto Airports Authority Series 99-1, 6 .450%, 2029-07-30 CAD 116,944 128,265 144,806 Health Montréal Collective, Private Placement Series 144A, 6 .721%, 2049-09-30 CAD 489,000 595,071 607,789 Hospital Infrastructure Series A, 5 .439%, 2045-01-31 CAD 152,634 152,632 170,375 Integrated Team Solutions SJHC 5 .946%, 2042-11-30 CAD 53,389 53,766 65,458 Laurentian Bank of Canada 2 .750%, 2021-04-22 CAD 105,000 104,776 105,991 Melancthon Wolfe Wind 3 .834%, 2028-12-31 CAD 117,250 117,264 119,694 North West Redwater Partnership Series A, 3 .200%, 2024-07-22 CAD 195,000 195,135 202,507 3 .200%, 2026-04-24 CAD 94,000 93,800 95,802 Series F, 4 .250%, 2029-06-01 CAD 110,000 109,694 117,773 Northland Power Solar Finance Limited Partnership Series A, 4 .958%, 2032-12-31 CAD 135,731 135,741 149,681 Plenary Health Care Partnerships Humber 4 .895%, 2039-05-31 CAD 126,871 126,871 140,565 Plenary Properties 6 .288%, 2044-01-31 CAD 271,692 325,743 347,374 Reliance Series 1, 4 .574%, 2017-03-15 CAD 69,000 69,000 69,337 Series 2, 5 .187%, 2019-03-15 CAD 149,000 149,000 155,509 Royal Bank of Canada 2 .364%, 2017-09-21 CAD 610,000 603,299 615,684 2 .260%, 2018-03-12 CAD 127,000 129,407 128,565 1 .400%, 2019-04-26 CAD 395,000 394,874 395,088 2 .860%, 2021-03-04* CAD 211,000 210,973 218,713 2 .030%, 2021-03-15 CAD 310,000 309,882 311,165 1 .583%, 2021-09-13 CAD 190,000 190,000 186,168 3 .040%, (floating rate from 2019-07-17), 2024-07-17* CAD 61,000 60,989 61,634 2 .990%, (floating rate from 2019-12-06), 2024-12-06 CAD 439,000 440,409 453,081 2 .480%, (floating rate from 2020-06-04), 2025-06-04* CAD 295,000 294,944 292,136 Scotiabank 2 .370%, 2018-01-11* CAD 321,000 319,058 325,030 3 .270%, 2021-01-11 CAD 325,000 351,302 342,389 2 .898%, (floating rate from 2017-08-03), 2022-08-03 CAD 412,000 416,315 415,425 3 .367%, (floating rate from 2020-12-08), 2025-12-08* CAD 457,000 457,000 466,011 2 .620%, 2026-12-02 CAD 170,000 169,971 168,651 SGTP Highway Bypass Series A, 4 .105%, 2045-01-31 CAD 164,000 164,000 165,194 SNC-Lavalin Innisfree McGill Finance 6 .632%, 2044-06-30 CAD 134,436 156,200 171,532 Teranet Holdings 3 .646%, 2022-11-18 CAD 110,000 110,000 112,739 Teranet Income Fund 5 .754%, 2040-12-17 CAD 86,000 88,754 92,354 6 .100%, 2041-06-17 CAD 425,000 473,988 476,580 Toronto-Dominion Bank 1 .680%, 2021-06-08 CAD 100,000 99,962 99,310 3 .226%, 2024-07-24* CAD 159,000 159,834 167,160





2 .692%, (floating rate from 2020-06-24), 2025-06-24 CAD 136,000 136,000 135,746 2 .982%, (floating rate from 2020-09-30), 2025-09-30* CAD 142,000 142,000 142,991 5 .763%, (floating rate from 2017-12-18), 2106-12-18 CAD 263,000 293,076 273,631 TransCanada PipeLines 8 .050%, 2039-02-17* CAD 121,000 192,202 183,857

13,122,761 13,353,514

TOTAL CANADIAN BONDS 36,753,125 37,411,613

U.S. Bonds (0.0%)Sinai Health System Series A, 3 .527%, 2056-06-09 CAD 55,000 55,000 51,103

TOTAL BONDS 36,808,125 37,462,716

Number of Units

INVESTMENT FUNDS (20.3%)Fiera Global Equity Fund 2,215,711 24,294,482 37,524,746

Par Value

MONEY MARKET SECURITIES (10.7%)Canada Treasury Bills 2017-01-04 CAD 1,300,000 1,299,610 1,299,610 2017-01-05* CAD 1,820,000 1,819,854 1,819,854 2017-02-09 CAD 635,000 634,524 634,524 2017-02-23 CAD 110,000 109,880 109,880 2017-03-09* CAD 9,380,000 9,369,830 9,369,830 New Brunswick Treasury Bills 2017-02-09 CAD 1,950,000 1,947,952 1,947,952 Province of Nova Scotia, notes 2017-02-21 CAD 3,175,000 3,171,380 3,171,380 Québec Treasury Bills 2017-03-03 CAD 1,375,000 1,373,295 1,373,295

TOTAL MONEY MARKET SECURITIES 19,726,325 19,726,325

ASSET-BACKED SECURITIES (0.1%)CHIP Mortgage Trust 3 .663%, 2038-09-25 CAD 186,000 186,000 191,333

MORTGAGE-BACKED SECURITIES (0.0%)Merrill Lynch Financial Assets Series 2007-CA22, Class A3, 4 .878%, 2017-04-12 CAD 50,000 37,026 40,613

PORTFOLIO TRANSACTION COSTS INCLUDED IN THE SECURITIES’ COST (70,266) —

TOTAL INVESTMENTS (100.3%) 161,220,281 185,160,326


NET ASSETS (100%) 184,679,409



TOP FIVE HOLDINGS OF THE UNDERLYING FUND – unaudited


FIERA GLOBAL EQUITY FUND 20.3%Moody’s Corporation 4 .5%Becton, Dickinson and Company 4 .2%Johnson & Johnson 4 .2%Keyence Corporation 4 .0%Mastercard 3 .3%







Investment ObjectiveTo provide investors with a balance of capital growth and interest income by investing primarily in Canadian fixed income and equity securities .

Investment StrategyTo provide such a balance by investing a portion of its assets in the common shares of medium and large cap Canadian corporations and the remainder in Canadian government and Canadian investment-grade corporate bonds and other interest-bearing instruments .





Level 2$

Level 3$

Total$

Financial Assets at FVTPLEquities 90,214,593 — — 90,214,593 Bonds 22,824,518 14,638,198 — 37,462,716 Investment Funds — 37,524,746 — 37,524,746 Mortgage-Backed Securities — 40,613 — 40,613 Asset-Backed Securities — 191,333 — 191,333 Money Market Securities 19,726,325 — — 19,726,325 TOTAL 132,765,436 52,394,890 — 185,160,326


Level 2$

Level 3$

Total$

Financial Assets at FVTPLEquities 84,558,071 — — 84,558,071 Bonds 21,704,615 17,849,045 — 39,553,660 Investment Funds — 45,021,231 — 45,021,231 Mortgage-Backed Securities — 311,077 — 311,077 Asset-Backed Securities — 195,326 — 195,326 Money Market Securities 13,248,173 — — 13,248,173 TOTAL 119,510,859 63,376,679 — 182,887,538


Classification of Level 3As at December 31, 2016 and 2015, the Fund has no financial instruments classified within Level 3 .




Reconciliation of Level 3 Fair Value MeasurementThe following table summarizes a reconciliation of movements on Level 3 financial instruments between the beginning and end of the year:

December 31, 2016 Total $

Balance, Beginning of Year — Proceeds from sale of investments — Investments purchased 2,799,168 Net realized gain (loss) — Net unrealized gain (loss) — Transfers to (from) Level 3 (2,799,168) Balance, End of Year —

Certain securities classified as Level 3 entailed restrictions . In April 2016, these securities valued at approximately $2,799,000 were transferred from Level 3 to Level 1 following the expiration of the restrictions . These securities are now valued at the quoted prices on the active markets .

Investment Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds (including limited partnerships) and master asset vehicles (included in the bonds) in the table "Investment Measured at Fair Value within the Levels" also represent the fair value of investments in structured entities .


Currency RiskPart of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .As at December 31, 2016 and 2015, the majority of the Fund’s financial assets and liabilities are denominated in Canadian dollars . As a result, the Fund is not significantly exposed to currency risk .

Interest Rate RiskPart of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The following table summarizes the Fund’s exposure to interest rate risk . It includes the Fund’s financial assets and liabilities at fair value, categorized by the earlier of contractual re-pricing or maturity dates . The table also illustrates the impact on the Net Assets Attributable to Contract Owners, had prevailing interest rates changed by 0 .25%, assuming a parallel shift in the yield curve, with all other variables held constant .

Less than 1 Year

$1 to 5 Years

$5 to 10 Years

$

Greater than 10 Years

$Total

$

Impact on Net Assets Attributable to

Contract Owners$

December 31, 2016 22,302,575 14,416,500 9,245,293 11,404,599 57,368,967 962,041December 31, 2015 15,605,259 15,537,608 10,556,269 11,608,315 53,307,451 684,204

In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .






Concentration RiskPart of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The following table summarizes the concentration risk, as a percentage of the Net Assets Attributable to Contract Owners:


Equities Financials 17 .4 Energy 12 .2 Materials 5 .4 Consumer Discretionary 4 .6 Industrials 4 .3 Information Technology 2 .3 Consumer Staples 1 .9 Utilities 0 .6 Health Care 0 .2Bonds Provincial Governments and Crown Corporations 7 .9 Corporations 7 .3 Government of Canada 5 .1Growth Investment Funds 20 .3Money Market Securities 10 .7Asset-Backed Securities 0 .1Other Net Assets (0 .3)TOTAL 100


Equities Financials 17 .3 Energy 7 .9 Materials 6 .3 Industrials 4 .5 Consumer Staples 2 .7 Consumer Discretionary 2 .3 Information Technology 2 .1 Health Care 1 .3 Telecommunication Services 1 .2Growth Investment Funds 24 .3Bonds Corporations 8 .9 Provincial Governments and Crown Corporations 8 .2 Government of Canada 4 .3Money Market Securities 7 .2Mortgage-Backed Securities 0 .2Asset-Backed Securities 0 .1Other Net Assets 1 .2TOTAL 100

Price RiskThe Fund may trade in financial instruments and take positions in traded and over-the-counter instruments .Part of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .


%


December 31, 2016 $


December 31, 2015 $

FTSE TMX Canada 91 Day Treasury Bills (10%) 0 .25 51,202 47,580FTSE TMX Canada Universe (30%) 1 .00 614,429 570,958S&P/TSX Capped (40%) 3 .00 2,457,718 2,283,832MSCI World Net (20%) 3 .00 1,228,859 1,141,916





Credit RiskPart of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Fund’s credit risk concentration is separated between fixed-income and money market securities . Their fair values include consideration of the issuers’ creditworthiness and accordingly, represent the Fund’s maximum exposure to credit risk .

Portfolio’s Fixed-Income Securities by Credit Rating Category

Credit Rating Percentage of Fixed-Income Securities

December 31, 2016%

Percentage of Fixed-Income Securities

December 31, 2015%

AAA 28 22AA 37 39A 23 30BBB 12 9TOTAL 100 100

Portfolio’s Money Market Securities by Credit Rating Category

Credit Rating Percentage of Money Market Securities

December 31, 2016%

Percentage of Money Market Securities

December 31, 2015%

R-1 (High) 67 62R-1 (Middle) 33 38TOTAL 100 100

Securities Lending and Repurchase TransactionsAs part of its securities lending against cash and repurchase transactions, the Fund is exposed to counterparty credit risk .The carrying amount of financial assets lent as part of repurchase transactions is:


As part of its reverse repurchase transactions, the Fund is permitted to sell or repledge in the absence of default the financial assets held as collateral .The fair value of those financial assets is:


Liquidity RiskPart of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturities of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .






DERECOGNITION OF FINANCIAL ASSETS

Securities Lending and Repurchase TransactionsAs part of transactions involving securities lending or repurchase transactions, the Fund transfers financial assets under terms and conditions providing for their future repurchase . These financial assets remain recognized in the “Investments at fair value through profit or loss pledged as collateral” of the Statement of Financial Position as the Fund retains substantially all the risks and rewards related to these assets .

December 31, 2016$

December 31, 2015$

Investments at FVTPL pledged as Collateral 27,680,152 21,876,504Value of Collateral received 28,233,755 22,314,035

The Funds require collateral in the form of cash or such other securities as may be acceptable to Desjardins Financial Security and that have an aggregate value of no less than 102% of the loaned securities fair value .The following table presents the carrying amount and the fair value of financial assets transferred by the Fund but not derecognized as well as the related liabilities recognized in “Commitments related to repurchase transactions” and “Commitments related to securities lending” of the Statement of Financial Position .


$


$Financial Assets 13,335,314 5,688,216 Related Liabilities 13,316,482 5,685,138

*The fair value equals the carrying amount .

RECONCILIATION OF INCOME FROM SECURITY LENDING AND REPURCHASE TRANSACTION (Note 2)The following table shows a reconciliation of the total income generated from securities lending transactions of the Fund and the revenue from securities lending and repurchase transactions disclosed in the Fund’s Statement of Comprehensive Income .

December 31, 2016

$

December 31, 2016

%

December 31, 2015

$

December 31, 2015

%Total Income 29,335 100 35,557 100Net Income received by the Fund 17,601 60 21,334 60Net Income received by

Desjardins Trust 11,734 40 14,223 40











Series 1 7,258 7,752 9,210 9,743 10,555Series 3 14,379 16,332 19,414 21,183 22,565Series 5 148,882 152,946 162,582 159,832 158,726Series 6 13,242 7,625 1,851 — —Series 7 918 544 323 — —

Number of units outstanding (000)Series 1 719 809 967 1,113 1,333Series 3 1,289 1,551 1,866 2,229 2,641Series 5 12,639 13,843 14,988 16,230 18,032Series 6 2,283 1,401 346 — —Series 7 156 99 60 — —








DFS GIF – CANADIAN BALANCED – FRANKLIN BISSETT*






Franklin Bissett Canadian Equity Fund 15 .9%Franklin Bissett Corporate Bond Fund 14 .7%Franklin Bissett Core Plus Bond Fund 14 .6%Franklin Bissett Monthly Income and Growth Fund 6 .4%Franklin Bissett U .S . Focus Fund 6 .3%Franklin Bisset All Canadian Focus Fund 6 .1%Franklin Bissett Microcap Fund 5 .9%Franklin Bissett Small Cap Fund 5 .3%Templeton EAFE Developed Markets Fund 4 .2%Franklin U .S . Rising Dividends Fund 4 .2%
















$2015



207,290,943 193,550,832LIABILITIESCurrent LiabilitiesBank overdraft — 67,886Accrued expenses 464,549 441,042Withdrawals payable 368,929 322,265Payable for securities purchased 247,476 175,627






$2015

$INCOMEInterest for attribution purposes 348,908 105,744Dividends 3,245,002 3,531,487Changes in fair value:


25,166,872 (1,900,193)



5,394,408 5,992,614

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 19,772,464 (7,892,807)



Average Number of Units 884,052 1,092,829


from Operations 15,829,540 (6,557,000)- per unit 0.73 (0 .26)









DFS GIF – CANADIAN BALANCED – FRANKLIN BISSETT (cont.)




2016$

2015$


from operations attributable to contract owners 19,772,464 (7,892,807)

PremiumsSeries 3 635,513 547,986Series 5 13,397,921 11,850,340Series 6 12,422,425 12,662,984Series 7 1,034,920 1,625,601

27,490,779 26,686,911


(33,597,266) (52,588,774)



2016$

2015$



Adjustments for:Net realized gain (loss) (7,450,912) (12,610,257)Net unrealized gain (loss) (14,122,050) 18,147,681Non-cash distribution from investments (3,489,252) (3,531,487)


Investments purchased (7,460,340) (3,790,344)Receivable for securities sold 68,041 (31,557)Accrued expenses 23,507 (75,020)Payable for securities purchased 71,849 (51,193)







SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM (USED IN) OPERATING ACTIVITIESInterest paid 23 203




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.2%)Franklin Bissett Canadian Balanced Fund, Series O 4,532,165 162,143,054 206,621,422



NET ASSETS (100%) 206,209,989




Franklin Bissett Canadian Equity Fund 15 .9%Franklin Bissett Corporate Bond Fund 14 .7%Franklin Bissett Core Plus Bond Fund 14 .6%Franklin Bissett Monthly Income and Growth Fund 6 .4%Franklin Bissett U .S . Focus Fund 6 .3%Franklin Bisset All Canadian Focus Fund 6 .1%Franklin Bissett Microcap Fund 5 .9%Franklin Bissett Small Cap Fund 5 .3%Templeton EAFE Developed Markets Fund 4 .2%Franklin U .S . Rising Dividends Fund 4 .2%Franklin Bissett Canadian Dividend Fund 4 .1%Templeton Global Bond Fund 3 .9%Franklin Mutual European Fund 3 .4%Templeton Global Smaller Companies Fund 2 .3%Templeton Emerging Markets Fund 1 .1%Franklin Bissett Canadian Short Term Bond Fund 0 .6%Cash and Cash Equivalents 0 .5%Franklin Bissett Canadian Governement Fund 0 .5%







Investment ObjectiveTo provide investors with a balance of current income and long-term capital appreciation primarily through the investment in Canadian fixed-income and equity securities .

Investment StrategyTo provide such an opportunity by investing in a diversified portfolio of Franklin Bissett mutual funds . The underlying funds may invest in foreign securities .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$



Investment Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds (including limited partnerships) and master asset vehicles (included in the bonds) in the table "Investment Measured at Fair Value within the Levels" also represent the fair value of investments in structured entities .











%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (35%) 1 .00 639,432 621,058Bloomberg Barclays U .S . Aggregate

Bond (2 .5%)* 1 .00 45,674 44,361J .P . Morgan Global Government Bond (2 .5%) 1 .00 45,674 44,361S&P/TSX Small Cap (5%) 3 .00 274,042 266,168S&P/TSX (32 .5%) 3 .00 1,781,275 1,730,090S&P 500 (10%) 3 .00 548,084 532,335MSCI EAFE Net (10%) 3 .00 548,084 532,335MSCI Emerging Markets Net (2 .5%) 3 .00 137,021 133,084












Series 3 6,072 6,724 8,415 9,253 7,874Series 5 160,715 158,946 199,608 188,334 137,213Series 6 35,937 24,394 17,031 — —Series 7 3,487 2,480 1,284 — —

Number of units outstanding (000)Series 3 826 1,010 1,209 1,385 1,361Series 5 21,092 23,115 27,885 27,520 23,230Series 6 6,591 4,965 3,336 — —Series 7 632 501 251 — —








DFS GIF – BALANCED GROWTH – FRANKLIN QUOTENTIAL*






Franklin Bissett Core Plus Bond Fund 18 .9%Franklin U .S . Rising Dividends Fund 6 .4%Franklin U .S . Core Equity Fund 6 .0%Franklin Bissett Canadian Equity Fund 5 .7%Franklin Strategic Income Fund 5 .0%Franklin Mutual European Fund 4 .7%Franklin Bisset All Canadian Focus Fund 4 .5%Franklin U .S . Opportunities Fund 4 .4%Templeton Global Bond Fund 4 .3%Franklin Templeton Canadian Large Cap Fund 3 .4%
















$2015



520,910,153 538,080,974LIABILITIESCurrent LiabilitiesBank overdraft 243,546 178,117Accrued expenses 1,276,662 1,320,670Withdrawals payable 965,268 500,515Payable for securities purchased — 109,762






$2015



23,580,859 40,357,694



15,938,958 16,880,013

















2016$

2015$



PremiumsSeries 3 999,687 1,242,079Series 5 39,892,965 43,698,156Series 6 12,452,211 16,316,491Series 7 1,573,482 2,417,805

54,918,345 63,674,531


(80,107,479) (67,483,968)



2016$

2015$













DFS GIF – BALANCED GROWTH – FRANKLIN QUOTENTIAL (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)Franklin Quotential Balanced Growth Portfolio 47,413,228 382,066,918 520,123,106


OTHER NET ASSETS (-0.3%) (1,698,429

NET ASSETS (100%) 518,424,677




Franklin Bissett Core Plus Bond Fund 18 .9%Franklin U .S . Rising Dividends Fund 6 .4%Franklin U .S . Core Equity Fund 6 .0%Franklin Bissett Canadian Equity Fund 5 .7%Franklin Strategic Income Fund 5 .0%Franklin Mutual European Fund 4 .7%Franklin Bisset All Canadian Focus Fund 4 .5%Franklin U .S . Opportunities Fund 4 .4%Templeton Global Bond Fund 4 .3%Franklin Templeton Canadian Large Cap Fund 3 .4%iShares Russell 1000 Value ETF 3 .3%Franklin Japan Fund 2 .8%Templeton Asian Growth Fund 2 .7%iShares TIPS Bond ETF 2 .7%iShares MSCI Japan ETF 2 .6%Franklin Bissett Small Cap Fund 2 .3%S&P Depositary Receipt Gold Trust ETF 2 .0%BMO MSCI Europe High Quality Hedged to CAD Index ETF 1 .8%Franklin Bissett Canadian Governement Fund 1 .5%iShares Intermediate Credit Bond ETF 1 .4%S&P Depositary Receipt EURO STOXX 50 ETF 1 .4%Templeton Emerging Markets Smaller Companies Fund 1 .3%Franklin European Small-Mid Cap Growth Fund 1 .2%iShares S&P/TSX 60 Index ETF 1 .0%PowerShares Senior Loan Portfolio ETF 0 .8%






Investment StrategyTo emphasize investments in equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon . The Fund also invests, to a lesser extent, in fixed income underlying funds in order to provide stability .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$
















%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (30%) 1 .00 1,790,882 1,721,526Bloomberg Barclays Multiverse Bond (10%)* 1 .00 596,961 573,842S&P/TSX (30%) 3 .00 5,372,647 5,164,579MSCI All Country World Net (30%) 3 .00 5,372,647 5,164,579










Series 3 6 .32 6 .24 5 .99 5 .63 4 .95Series 5 6 .51 6 .41 6 .13 5 .75 5 .04Series 6 5 .53 5 .43 5 .19 — —Series 7 5 .60 5 .48 5 .21 — —



Number of units outstanding (000)Series 3 1,821 2,036 2,181 2,473 2,829Series 5 72,244 77,569 80,634 84,385 85,713Series 6 5,896 4,263 1,588 — —Series 7 734 524 86 — —

Management expense ratio (MER)1 (%)Series 3 3 .26 3 .27 3 .27 3 .29 2 .95Series 5 2 .97 2 .97 2 .97 2 .97 2 .65Series 6 2 .80 2 .79 2 .80 — —Series 7 2 .34 2 .36 2 .36 — —

Portfolio turnover rate2 (%) 3 .18 10 .50 2 .63 2 .79 5 .66






DFS GIF – CANADIAN BALANCED – CI SIGNATURE*






Scotiabank 3 .2%Royal Bank of Canada 2 .6%Toronto-Dominion Bank 2 .6%Manulife Financial Corporation 2 .5%Synchrony Financial 1 .6%Canadian National Railway Company 1 .3%Province of Quebec, 4 .25%, December 1, 2021 1 .2%Suncor Energy 1 .2%Micron Technology 1 .2%Alibaba Group Holding 1 .1%


Series 5 Series 5 Series 6 Series 6 Series 7 Series 7







1 Year 10,496 5 .0% 10,514 5 .1% 10,564 5 .6%3 Years 11,413 4 .5% — — — —5 Years 13,535 6 .2% — — — —Since Inception 13,856 5 .0% 11,170 4 .0% 11,320 4 .4%

Series 5 Series 6 Series 7




$2015



113,998,401 110,828,579LIABILITIESCurrent LiabilitiesBank overdraft 95,849 32,321Accrued expenses 275,933 269,081Withdrawals payable 162,549 358,326Payable for securities purchased 123,900 —






$2015

$INCOMEInterest for attribution purposes 235,743 393,670Dividends 2,711,073 918,929Changes in fair value:

Net realized gain (loss) on investments (181,267) 7,903,115Net unrealized gain (loss) on investments 5,795,689 (7,814,344)

8,561,238 1,401,370

EXPENSESManagement fees and guarantee charge 2,530,617 2,497,830Operating expenses 646,814 683,924

3,177,431 3,181,754












DFS GIF – CANADIAN BALANCED – CI SIGNATURE (cont.)




2016$

2015$



PremiumsSeries 5 7,202,438 16,845,424Series 6 7,684,018 17,794,620Series 7 923,876 1,329,199

15,810,332 35,969,243

WithdrawalsSeries 5 (13,684,284) (16,811,940)Series 6 (3,879,857) (3,436,044)Series 7 (458,679) (117,561)

(18,022,820) (20,365,545)



2016$

2015$



Adjustments for:Net realized gain (loss) 181,267 (7,903,115)Net unrealized gain (loss) (5,795,689) 7,814,344Non-cash distribution from investments (2,946,816) (1,312,753)













Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)Signature Canadian Balanced Fund, Class I 11,702,191 108,616,724 113,628,274



NET ASSETS (100%) 113,340,170




Scotiabank 3 .2%Royal Bank of Canada 2 .6%Toronto-Dominion Bank 2 .6%Manulife Financial Corporation 2 .5%Synchrony Financial 1 .6%Canadian National Railway Company 1 .3%Province of Quebec, 4 .25%, December 1, 2021 1 .2%Suncor Energy 1 .2%Micron Technology 1 .2%Alibaba Group Holding 1 .1%Citigroup 1 .1%UnitedHealth Group 1 .0%Alphabet 1 .0%Province of Ontario, 2 .40%, June 2, 2026 1 .0%Samsung Electronics 1 .0%Sony Corporation 1 .0%JPMorgan Chase & Company 1 .0%Alimentation Couche-Tard 0 .9%Anthem 0 .9%Power Financial Corporation 0 .9%Province of Quebec, 2 .75%, September 1, 2025 0 .8%Province of Ontario, 3 .15%, June 2, 2022 0 .8%Nestlé SA 0 .8%Saputo Group 0 .8%Wells Fargo & Company, Warrants, October 28, 2018 0 .8%







Investment ObjectiveTo provide investors with an attractive balance of current income and capital appreciation by investing primarily in a combination of Canadian equity and equity-related securities and fixed income securities .

Investment StrategyFor the equity portion, the Fund invests primarily in companies providing a stable income or consistent dividends . For the fixed income portion, the portfolio advisor selects high-quality fixed income securities, including bank loans and floating rate debt instruments but may choose to shift the weighting of the portion of the Fund held in bonds with longer terms to maturity depending on the expected fluctuations in interest rates . The Fund may also invest in foreign securities as well as warrants, and derivatives, the latter to aid in hedging against potential losses resulting from changes in the prices of the securities that the Fund has invested in as well as any exposure from foreign currencies .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (40%) 1 .00 377,639 387,077S&P/TSX (30%) 3 .00 849,688 870,924MSCI All Country World Net (30%) 3 .00 849,688 870,924










Series 5 6.93 6 .60 6 .69 6 .07 5 .43Series 6 5.59 5 .31 5 .37 — —Series 7 5.66 5 .36 5 .39 — —


Series 5 83,488 86,020 87,200 81,151 67,092Series 6 27,445 22,332 8,501 — —Series 7 2,407 1,817 645 — —

Number of units outstanding (000)Series 5 12,051 13,032 13,042 13,368 12,357Series 6 4,914 4,204 1,584 — —Series 7 425 339 120 — —

Management expense ratio (MER)1 (%)Series 5 2.99 2 .99 2 .99 2 .99 2 .68Series 6 2.79 2 .78 2 .77 — —Series 7 2.29 2 .34 2 .36 — —







DFS GIF – INCOME AND GROWTH – CI SIGNATURE*






Scotiabank 3 .0%Royal Bank of Canada 2 .4%Toronto-Dominion Bank 2 .4%Manulife Financial Corporation 2 .3%Synchrony Financial 1 .4%Canadian National Railway Company 1 .2%Suncor Energy 1 .1%Micron Technology 1 .1%Citigroup 1 .0%UnitedHealth Group 1 .0%









1 Year 10,704 7 .0% 10,717 7 .2% 10,770 7 .7%3 Years 11,344 4 .3% — — — —Since Inception 13,053 6 .4% 11,120 3 .8% 11,266 4 .3%





$2015


or loss (FVTPL) 73,197,187 69,141,832Premiums receivable 1,212,973 232,269Receivable for securities sold — 28,314

74,419,761 69,402,415LIABILITIESCurrent LiabilitiesBank overdraft — 3,897Accrued expenses 177,337 170,2Withdrawals payable 116,594 82,672Payable for securities purchased 1,101,945 6,603






$2015

$INCOMEInterest for attribution purposes 1,458,336 1,293,823Dividends 785,042 828,449Changes in fair value:

Net realized gain (loss) on investments (298,429) 2,279,667Net unrealized gain (loss) on investments 4,631,579 (4,300,254)

6,576,528 101,685


1,992,398 2,015,598














2016$

2015$



PremiumsSeries 5 4,139,236 9,337,232Series 6 11,712,843 18,754,413Series 7 1,157,919 590,372

17,009,998 28,682,017

WithdrawalsSeries 5 (12,589,987) (13,458,440)Series 6 (4,846,788) (2,378,991)Series 7 (272,505) (53,112)

(17,709,280) (15,890,543)



2016$

2015$



Adjustments for:Net realized gain (loss) 298,429 (2,279,667)Net unrealized gain (loss) (4,631,579) 4,300,254Non-cash distribution from investments (2,243,360) (2,124,330)


Investments purchased (7,994,172) (17,571,276)Receivable for securities sold 28,314 (28,314)Accrued expenses 7,131 27,274Payable for securities purchased 1,095,342 (120,203)









DFS GIF – INCOME AND GROWTH – CI SIGNATURE (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.2%)Signature Income & Growth Fund, Class I 7,577,348 68,532,288 73,197,187



NET ASSETS (100%) 73,023,885




Scotiabank 3 .0%Royal Bank of Canada 2 .4%Toronto-Dominion Bank 2 .4%Manulife Financial Corporation 2 .3%Synchrony Financial 1 .4%Canadian National Railway Company 1 .2%Suncor Energy 1 .1%Micron Technology 1 .1%Citigroup 1 .0%UnitedHealth Group 1 .0%Province of Ontario, 2 .40%, June 2, 2026 1 .0%Alibaba Group Holding 1 .0%Alphabet 1 .0%Sony Corporation 0 .9%JPMorgan Chase & Company 0 .9%Samsung Electronics 0 .9%Anthem 0 .9%Alimentation Couche-Tard 0 .8%Thermo Fisher Scientific 0 .8%Power Financial Corporation 0 .8%Nestlé SA 0 .8%Saputo Group 0 .8%Wells Fargo & Company, Warrants, October 28, 2018 0 .8%Genworth MI Canada 0 .8%Province of Quebec, 4 .25%, December 1, 2021 0 .7%





Investment ObjectiveThe objective of this Fund is to provide a steady flow of current income while preserving capital by obtaining exposure primarily to equity, equity related and fixed income securities of Canadian issuers .

Investment StrategyThe Fund invests in a combination of equity, fixed income and derivatives . Broadly diversified by sector and style, preferred and common shares make up portions of the Fund’s investments in equity securities . The fixed income portion of the Fund’s investments is comprised of high-yielding government and corporate bonds, debentures and notes, including some securities that are unrated or have credit ratings below investment grade . The Fund may also invest in real estate investment trusts (REITs), royalty trusts, income trusts and other similar high yielding instruments .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$
















%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (15%) 1 .00 88,478 86,164Merrill Lynch High Yield Master II (15%) 2 .00 176,956 172,328S&P/TSX Composite High Dividend (10%) 3 .00 176,956 172,328S&P/TSX (30%) 3 .00 530,867 516,985MSCI All Country World Net (30%) 3 .00 530,867 516,985












Series 5 40,197 46,082 51,381 40,521 12,732Series 6 30,855 22,047 6,386 — —Series 7 1,972 1,010 495 — —

Number of units outstanding (000)Series 5 6,159 7,558 8,232 7,043 2,502Series 6 5,549 4,250 1,205 — —Series 7 350 193 93 — —








DFS GIF – GROWTH AND INCOME – NEI NORTHWEST*






NEI Northwest Global Equity Fund 34 .6%NEI Canadian Bond Fund 21 .9%Toronto-Dominion Bank 4 .1%Scotiabank 3 .9%Manulife Financial Corporation 2 .6%Onex Corporation 2 .5%Quebecor 2 .3%Sun Life Financial 2 .3%FirstService Corporation 2 .1%Thomson Reuters Corporation 2 .1%












Series 5 Series 6 Series 7Series 3




$2015









$2015


Net realized gain (loss) on investments 4,238,283 5,352,155Net unrealized gain (loss) on investments 7,180,142 (603,652)

16,418,282 9,314,900



4,706,862 4,785,641















DFS GIF – GROWTH AND INCOME – NEI NORTHWEST (cont.)




2016$

2015$



PremiumsSeries 3 205,013 178,955Series 5 19,367,077 10,052,579Series 6 8,118,908 8,519,181Series 7 671,355 346,389

28,362,353 19,097,104

WithdrawalsSeries 3 (652,234) (857,033)Series 5 (23,801,196) (21,942,561)Series 6 (2,160,730) (1,705,765)Series 7 (18,891) (73,292)

(26,633,051) (24,578,651)



2016$

2015$



Adjustments for:Net realized gain (loss) (4,238,283) (5,352,155)Net unrealized gain (loss) (7,180,142) 603,652Non-cash distribution from investments (4,854,252) (4,390,756)


Investments purchased (9,522,726) (4,841,665)Receivable for securities sold (48) (31,307)Accrued expenses 29,197 (494)Payable for securities purchased 298,779 (136,050)

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (1,427,799) 5,355,087


NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 1,671,939 (5,409,884)







Cost

$

Fair Value

$

INVESTMENT FUNDS (100.1%)NEI Northwest Growth and Income Fund, Series I 23,938,419 121,994,645 167,997,431



NET ASSETS (100%) 167,895,979




NEI Northwest Global Equity Fund 34 .6%NEI Canadian Bond Fund 21 .9%Toronto-Dominion Bank 4 .1%Scotiabank 3 .9%Manulife Financial Corporation 2 .6%Onex Corporation 2 .5%Quebecor 2 .3%Sun Life Financial 2 .3%FirstService Corporation 2 .1%Thomson Reuters Corporation 2 .1%TELUS Corporation 2 .0%Granite Real Estate Investment Trust 2 .0%Rogers Communications 1 .9%BCE 1 .8%Colliers International Group 1 .7%Vermilion Energy 1 .4%Linamar Corporation 1 .3%Bombardier 1 .2%Bonterra Energy 0 .8%Pason Systems 0 .8%Air Canada 0 .8%Badger Daylighting 0 .8%Allied Properties Real Estate Investment 0 .8%Precision Drilling Corporation 0 .7%First Quantum Minerals 0 .7%







Investment ObjectiveTo provide a consistent stream of income and capital appreciation by investing primarily in a mix of Canadian equities and fixed-income securities .

Investment StrategyTo invest in a diversified portfolio consisting primarily of a balance of large cap equity and investment grade fixed-income securities issued principally by Canadian issuers .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (25%) 1 .00 372,084 316,410S&P/TSX (55%) 3 .00 2,455,754 2,088,309MSCI World Net (20%) 3 .00 893,001 759,385












Series 3 1,998 2,311 2,926 2,686 2,285Series 5 144,329 138,629 146,205 137,238 111,793Series 6 20,094 12,782 5,832 — —Series 7 1,475 734 445 — —

Number of units outstanding (000)Series 3 322 398 515 501 497Series 5 21,971 22,715 24,654 24,672 23,617Series 6 3,488 2,390 1,123 — —Series 7 253 136 85 — —








DFS GIF – GLOBAL GROWTH – NEI SELECT*






NEI Northwest U .S . Dividend Fund 13 .6%NEI Ethical Global Equity Fund 10 .0%NEI Northwest Global Equity Fund 9 .8%NEI Global Value Fund 9 .5%NEI Ethical International Equity Fund 8 .6%NEI Northwest Specialty Equity Fund 7 .0%NEI Northwest Macro Canadian Asset Allocation Fund 6 .7%NEI Global Total Return Bond Fund 6 .7%NEI Northwest Canadian Equity Fund 6 .2%NEI Northwest Emerging Markets Fund 6 .2%
















$2015


or loss (FVTPL) 94,089,633 83,962,666Premiums receivable 234,983 —Receivable for securities sold — 69,564







$2015

$INCOMEDividends 1,224,078 326,645Changes in fair value:


8,217,906 6,528,273


2,701,070 2,483,195Withholding taxes — 18,492

2,701,070 2,501,687

















2016$

2015$




18,934,688 16,541,564

WithdrawalsSeries 3 (637,538) (827,205)Series 5 (11,191,107) (8,156,269)Series 6 (2,470,673) (433,635)Series 7 (92,492) (10,935)

(14,391,810) (9,428,044)



2016$

2015$



Adjustments for:Net realized gain (loss) (2,314,966) (26,212,397)Net unrealized gain (loss) (4,678,862) 20,010,769Non-cash distribution from investments (1,224,078) (308,153)










DFS GIF – GLOBAL GROWTH – NEI SELECT (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)NEI Select Growth Portfolio, Series I 8,407,391 90,065,303 94,089,633



NET ASSETS (100%) 93,820,166




NEI Northwest U .S . Dividend Fund 13 .6%NEI Ethical Global Equity Fund 10 .0%NEI Northwest Global Equity Fund 9 .8%NEI Global Value Fund 9 .5%NEI Ethical International Equity Fund 8 .6%NEI Northwest Specialty Equity Fund 7 .0%NEI Northwest Macro Canadian Asset Allocation Fund 6 .7%NEI Global Total Return Bond Fund 6 .7%NEI Northwest Canadian Equity Fund 6 .2%NEI Northwest Emerging Markets Fund 6 .2%NEI Northwest Canadian Dividend Fund 6 .1%NEI Northwest Specialty Global High Yield Bond Fund 4 .9%NEI Canadian Bond Fund 3 .8%Cash and Cash Equivalents 0 .9%





Investment ObjectiveTo provide a balance of capital growth and interest income by investing primarily in units of individual underlying funds in order to gain the desired exposure to the equity and fixed income markets .

Investment StrategyTo emphasize investments in equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon . The Fund also invests to a lesser extent, in fixed income underlying funds in order to provide income and capital preservation .





Level 2$

Level 3$

Total$

Financial Assets at FVTPLInvestment Funds 94,089,633 — — 94,089,633TOTAL 94,089,633 — — 94,089,633


Level 2$

Level 3$

Total$
















%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (30%) 1 .00 280,596 254,650S&P/TSX (14%) 3 .00 392,834 356,509MSCI World Net (56%) 3 .00 1,571,337 1,426,037












Series 3 3,699 4,042 4,282 5,338 5,670Series 5 71,103 68,260 65,707 64,401 54,175Series 6 17,041 10,479 2,488 — —Series 7 1,977 979 144 — —

Number of units outstanding (000)Series 3 481 555 616 803 990Series 5 8,683 8,862 9,004 9,296 9,133Series 6 2,954 1,934 485 — —Series 7 339 180 28 — —








DFS GIF – CANADIAN ASSET ALLOCATION – CI CAMBRIDGE*






Cambridge Bond Fund 22 .1%Walgreens Boots Alliance 2 .8%Franco-Nevada Corporation 2 .2%PrairieSky Royalty 2 .1%Tourmaline Oil Corporation 2 .0%Keyera Corporation 1 .9%Brookfield Infrastructure Partners 1 .8%Chubb 1 .8%George Weston 1 .8%Roche Holding AG 1 .5%














$2015

$ASSETSCurrent AssetsCash 30,109 340Investments at fair value through profit

or loss (FVTPL) 13,653,520 10,642,981Premiums receivable 2,731 173,108Receivable for securities sold 771 150







$2015

$INCOMEDividends 51,865 32,055Changes in fair value:

Net realized gain (loss) on investments 574,202 288,782Net unrealized gain (loss) on investments 501,375 149,428

1,127,442 470,265


340,959 239,995












DFS GIF – CANADIAN ASSET ALLOCATION – CI CAMBRIDGE (cont.)




2016$

2015$



PremiumsSeries 5 813,127 1,284,680Series 6 2,827,616 3,826,639Series 7 553,461 183,635

4,194,204 5,294,954

WithdrawalsSeries 5 (883,942) (972,315)Series 6 (749,029) (632,323)Series 7 (344,305) —

(1,977,276) (1,604,638)



2016$

2015$



Adjustments for:Net realized gain (loss) (574,202) (288,782)Net unrealized gain (loss) (501,375) (149,428)Non-cash distribution from investments (51,865) (32,055)

Proceeds from sale/maturity of investments 1,142,754 721,302

Investments purchased (3,025,851) (4,180,372)Receivable for securities sold (621) (150)Accrued expenses 7,487 8,014Payable for securities purchased (122,542) 149,588





Cash (bank overdraft), beginning of year 340 2,001

CASH (BANK OVERDRAFT), END OF YEAR 30,109 340




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.2%)Cambridge Canadian Asset Allocation Corporate Class, I Shares 718,606 12,232,068 13,653,520



NET ASSETS (100%) 13,621,417




Cambridge Bond Fund 22 .1%Walgreens Boots Alliance 2 .8%Franco-Nevada Corporation 2 .2%PrairieSky Royalty 2 .1%Tourmaline Oil Corporation 2 .0%Keyera Corporation 1 .9%Brookfield Infrastructure Partners 1 .8%Chubb 1 .8%George Weston 1 .8%Roche Holding AG 1 .5%Fluor Corporation 1 .4%Alphabet 1 .3%Computer Sciences Corporation 1 .3%Athene Holding 1 .2%Amgen 1 .2%Loblaw Companies 1 .2%Restaurant Brands International 1 .2%Broadcom 1 .2%Cerner Corporation 1 .2%Synchrony Financial 1 .2%Wells Fargo & Company 1 .1%Canadian Pacific Railway 1 .1%Activision Blizzard 1 .1%Palo Alto Networks 1 .1%Tahoe Resources 1 .0%







Investment ObjectiveThe objective of this Fund is to achieve a superior total investment return directly or indirectly, in a combination of primarily equity and fixed income securities of Canadian companies . Indirect investments may include convertible securities, derivatives, equity-related securities and securities of other mutual funds .

Investment StrategyThe Fund is actively managed with a disciplined bottom-up selection process . The strategy uses exposure in equity, fixed income instruments and cash and cash equivalents to achieve the Fund objective . The investments in each asset class will vary dependent on market conditions . The Canadian fixed income securities portion of the portfolio will consist mainly of high quality government and corporate bonds while foreign securities can make up part of the equity portion of the portfolio .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (40%) 1 .00 37,138 28,128S&P/TSX (60%) 3 .00 167,121 126,578












Series 5 6,188 5,899 5,390 3,279 356Series 6 6,986 4,514 1,287 — —Series 7 447 204 21 — —

Number of units outstanding (000)Series 5 856 866 820 548 70Series 6 1,190 817 242 — —Series 7 75 37 4 — —








DFS GIF – GROWTH – FRANKLIN QUOTENTIAL*






Franklin Bissett Core Plus Bond Fund 10 .5%Franklin U .S . Rising Dividends Fund 8 .1%Franklin U .S . Core Equity Fund 7 .5%Franklin Bissett Canadian Equity Fund 7 .2%Franklin Mutual European Fund 6 .2%Franklin Bisset All Canadian Focus Fund 5 .8%Franklin U .S . Opportunities Fund 5 .6%Franklin Templeton Canadian Large Cap Fund 4 .3%iShares Russell 1000 Value ETF 4 .2%Franklin Japan Fund 3 .7%
















$2015


or loss (FVTPL) 56,724,749 60,640,944Premiums receivable 2,835 17,818Receivable for securities sold 538 4,522

56,728,122 60,663,284LIABILITIESCurrent LiabilitiesBank overdraft 142 4,124Accrued expenses 151,011 162,279Withdrawals payable 37,519 41,466Payable for securities purchased 570 3,566






$2015



2,391,114 5,558,064



1,879,995 2,091,584

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 511,119 3,466,480











from Operations 797 841- per unit 0.11 0 .16





2016$

2015$


from operations attributable to contract owners 511,119 3,466,480

PremiumsSeries 3 273,006 191,170Series 5 1,869,886 2,049,559Series 6 826,122 2,395,618Series 7 — 19,385

2,969,014 4,655,732

WithdrawalsSeries 3 (404,287) (968,215)Series 5 (6,498,552) (6,103,955)Series 6 (490,134) (243,521)Series 7 (129) (66)

(7,393,102) (7,315,757)



2016$

2015$



Adjustments for:Net realized gain (loss) (3,927,564) (7,480,639)Net unrealized gain (loss) 2,261,153 2,815,226Non-cash distribution from investments (647,054) (804,183)


Investments purchased (1,114,475) (2,395,756)Receivable for securities sold 3,984 15,952Accrued expenses (11,268) 1,863Payable for securities purchased (2,996) 3,093





Cash (bank overdraft), beginning of period (4,124) (5,487)

CASH (BANK OVERDRAFT), END OF YEAR (142) (4,124)


DFS GIF – GROWTH – FRANKLIN QUOTENTIAL (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)Franklin Quotential Growth Portfolio 5,321,271 37,995,032 56,724,749



NET ASSETS (100%) 56,538,880




Franklin Bissett Core Plus Bond Fund 10 .5%Franklin U .S . Rising Dividends Fund 8 .1%Franklin U .S . Core Equity Fund 7 .5%Franklin Bissett Canadian Equity Fund 7 .2%Franklin Mutual European Fund 6 .2%Franklin Bisset All Canadian Focus Fund 5 .8%Franklin U .S . Opportunities Fund 5 .6%Franklin Templeton Canadian Large Cap Fund 4 .3%iShares Russell 1000 Value ETF 4 .2%Franklin Japan Fund 3 .7%Templeton Asian Growth Fund 3 .5%iShares MSCI Japan ETF 3 .4%Franklin Bissett Small Cap Fund 2 .9%Franklin Strategic Income Fund 2 .8%BMO MSCI Europe High Quality Hedged to CAD Index ETF 2 .5%Templeton Global Bond Fund 2 .3%S&P Depositary Receipt Gold Trust ETF 2 .0%S&P Depositary Receipt EURO STOXX 50 ETF 1 .8%Franklin European Small-Mid Cap Growth Fund 1 .7%Templeton Emerging Markets Fund 1 .6%iShares TIPS Bond ETF 1 .4%iShares S&P/TSX 60 Index ETF 1 .3%iShares Core MSCI Emerging Markets ETF 0 .9%Franklin Bissett Canadian Governement Fund 0 .9%Templeton Frontier Markets Fund 0 .8%






Investment StrategyTo emphasize investments in a diversified mix of equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon . The Fund also invests, to a lesser extent, in fixed income underlying funds in order to provide income and capital preservation .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$
















%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (15%) 1 .00 94,064 95,555Bloomberg Barclays Multiverse Bond (5%)* 1 .00 31,355 31,852S&P/TSX (35%) 3 .00 658,448 668,886MSCI All Country World Net (45%) 3 .00 846,576 859,996












Series 3 2,366 2,473 3,075 3,411 3,448Series 5 50,997 55,193 55,973 56,112 48,918Series 6 3,135 2,744 577 — —Series 7 41 41 20 — —

Number of units outstanding (000)Series 3 396 418 547 645 772Series 5 8,230 9,018 9,673 10,348 10,719Series 6 559 497 111 — —Series 7 7 7 4 — —







Canadian Equity

DFS GIF – DIVIDEND INCOME – FRANKLIN BISSETT*






Royal Bank of Canada 3 .9%Toronto-Dominion Bank 3 .9%Canadian Imperial Bank of Commerce 3 .8%Scotiabank 3 .0%Bank of Montreal 3 .0%Enbridge Income Fund Holdings 2 .6%IGM Financial 2 .6%Enbridge 2 .4%Canadian National Railway Company 2 .4%Power Financial Corporation 2 .2%
















$2015

$ASSETSCash 35,337 —Investments at fair value through profit


203,110,333 196,945,976LIABILITIESCurrent LiabilitiesBank overdraft — 52,415Accrued expenses 507,139 494,769Withdrawals payable 284,188 205,254Payable for securities purchased — 8,673






$2015



36,790,429 (9,015,766)


5,820,716 4,463,414














Canadian Equity

DFS GIF – DIVIDEND INCOME – FRANKLIN BISSETT (cont.)



2016$

2015$



PremiumsSeries 3 1,667,652 18,174,951Series 5 6,163,032 83,177,573Series 6 2,024,752 2,815,914Series 7 120,392 137,358

9,975,828 104,305,796

WithdrawalsSeries 3 (8,157,991) (7,236,271)Series 5 (25,682,835) (32,254,668)Series 6 (911,208) (832,496)Series 7 (59,366) (239,874)

(34,811,400) (40,563,309)



2016$

2015$





Investments purchased (603,877) (94,353,040)Receivable for securities sold (9,615) (100,589)Accrued expenses 12,370 132,348Payable for securities purchased (8,673) (13,484)











Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)Franklin Bissett Dividend Income Fund, Series O 4,768,906 167,941,316 202,869,263



NET ASSETS (100%) 202,319,006




Royal Bank of Canada 3 .9%Toronto-Dominion Bank 3 .9%Canadian Imperial Bank of Commerce 3 .8%Scotiabank 3 .0%Bank of Montreal 3 .0%Enbridge Income Fund Holdings 2 .6%IGM Financial 2 .6%Enbridge 2 .4%Canadian National Railway Company 2 .4%Power Financial Corporation 2 .2%Inter Pipeline 2 .1%Brookfield Renewable Partners 1 .8%Russel Metals 1 .7%Brookfield Property Partners 1 .7%Fortis 1 .6%Rogers Communications 1 .6%Wells Fargo & Company 1 .5%JPMorgan Chase & Company 1 .5%Freehold Royalties 1 .4%McDonald’s Corporation 1 .4%Intel Corporation 1 .4%TELUS Corporation 1 .4%Microsoft Corporation 1 .4%The Kraft Heinz Company 1 .3%Kinder Morgan 1 .3%

Canadian Equity






Investment ObjectiveTo provide the investor with a consistent return through investment in dividend paying common shares and preferred shares .

Investment StrategyTo invest in a diversified portfolio of large cap Canadian issuer preferred shares and common shares as well as common shares of large cap United States issuers with long histories of dividend growth . From time to time the Fund also invests in investment grade interest-bearing securities to a maximum of 25% of the total assets of the Fund .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

FTSE TMX Canada Universe (15%) 1 .00 288,443 281,079S&P/TSX Preferred Share (5%) 3 .00 288,443 281,079S&P/TSX (60%) 3 .00 3,461,316 3,372,944S&P 500 (20%) 3 .00 1,153,772 1,124,315




Canadian Equity








Series 3 39,069 39,609 31,596 35,564 34,856Series 5 154,556 150,261 109,418 106,196 77,534Series 6 8,088 5,863 4,320 — —Series 7 607 452 588 — —

Number of units outstanding (000)Series 3 3,152 3,741 2,729 3,172 3,551Series 5 11,989 13,701 9,166 9,229 7,727Series 6 1,439 1,228 833 — —Series 7 106 94 113 — —







Canadian Equity

DFS GIF – CANADIAN DIVIDEND – NEI NORTHWEST*






Royal Bank of Canada 4 .2%Toronto-Dominion Bank 4 .0%Manulife Financial Corporation 3 .1%BCE 3 .0%Rogers Communications 2 .7%Cenovus Energy 2 .7%Husky Energy 2 .7%Molson Coors Canada 2 .6%Atea 2 .6%Power Financial Corporation 2 .4%














$2015









$2015


Net realized gain (loss) on investments 147,515 999,431Net unrealized gain (loss) on investments 2,944,286 (1,411,817)

3,784,745 277,767


626,524 606,259

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 3,158,221 (328,492)








from Operations 12,563 (198)- per unit 1.16 (0 .05)





2016$

2015$


from operations attributable to contract owners 3,158,221 (328,492)

PremiumsSeries 5 2,292,058 4,159,753Series 6 1,799,051 1,364,610Series 7 95,196 —

4,186,305 5,524,363

WithdrawalsSeries 5 (2,718,957) (3,789,333)Series 6 (618,592) (249,218)Series 7 (241) —

(3,337,790) (4,038,551)



2016$

2015$



Adjustments for:Net realized gain (loss) (147,515) (999,431)Net unrealized gain (loss) (2,944,286) 1,411,817Non-cash distribution from investments (692,944) (690,153)


Investments purchased (2,101,865) (3,091,454)Accrued expenses 9,037 3,497Payable for securities purchased (43,154) 61,269



NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 815,565 1,437,525




Canadian Equity

DFS GIF – CANADIAN DIVIDEND – NEI NORTHWEST (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (99.7%)NEI Northwest Canadian Dividend Fund, Series I 1,250,215 19,539,484 23,190,369



NET ASSETS (100%) 23,262,308




Royal Bank of Canada 4 .2%Toronto-Dominion Bank 4 .0%Manulife Financial Corporation 3 .1%BCE 3 .0%Rogers Communications 2 .7%Cenovus Energy 2 .7%Husky Energy 2 .7%Molson Coors Canada 2 .6%Atea 2 .6%Power Financial Corporation 2 .4%Scotiabank 2 .4%Shaw Communications 2 .4%TELUS Corporation 2 .2%Crescent Point Energy 2 .1%Agrium 1 .9%RioCan Real Estate Investment Trust 1 .9%Intact Financial Corporation 1 .9%Bank of Montreal 1 .9%Sun Life Financial 1 .8%Superior Plus Corporation 1 .6%Brookfield Property Partners 1 .6%H&R Real Estate Investment Trust 1 .6%First Capital Realty 1 .6%Brookfield Renewable Partners 1 .3%Hydro One 1 .3%





Investment ObjectiveThe objective of this Fund is to achieve a balance between high dividend income and capital growth by investing mainly in a diversified portfolio of blue chip Canadian common stocks and, to a lesser extent, in high-yield preferred stocks and interest bearing securities .

Investment StrategyThe Fund invests in primarily blue chip common stocks but may also invest in preferred stocks, bonds, purchase warrants and rights, royalty trusts and income trusts with preference given to capital growth while still providing a high regular level of income . Quality liquid corporations whose management has built shareholder value over time not to mention a proven ability to generate free cash flow, supporting growth and profitability as well as providing management with the ability to make strategic acquisitions, buy back stock and pay increasing dividends are preferred investments for this Fund . While equity securities including preferred stocks providing stable income are favoured, any small, mid and large capitalization Canadian corporations in a variety of industries meeting these criteria will be considered .

FINANCIAL INSTRUMENTS MEASUREMENT AT FAIR VALUE (Note 7)




Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$







Canadian Equity









%


December 31, 2016$


December 31, 2015$

S&P/TSX 3 .00 499,808 409,830





Canadian Equity







Series 5 19,304 17,050 16,967 12,134 6,230Series 6 3,830 2,185 1,110 — —Series 7 128 21 21 — —

Number of units outstanding (000)Series 5 2,364 2,425 2,375 1,857 1,195Series 6 613 407 204 — —Series 7 20 4 4 — —







Canadian Equity

DFS GIF – CANADIAN EQUITY – JARISLOWSKY FRASER*






Toronto-Dominion Bank 8 .5%Jarislowsky Fraser Special Equity Fund 7 .4%Royal Bank of Canada 6 .8%Scotiabank 6 .2%Enbridge 5 .0%Canadian Natural Resources 4 .7%Canadian National Railway Company 4 .5%Manulife Financial Corporation 3 .9%Open Text Corporation 3 .4%Alimentation Couche-Tard 3 .3%


Series 3 Series 3 Series 5 Series 5 Series 6** Series 6** Series 7** Series 7**











Series 5 Series 6** Series 7**Series 3




$2015


or loss (FVTPL) 155,659,188 151,331,052Premiums receivable 1,331 —Receivable for securities sold 29,051 —

155,689,570 151,331,052LIABILITIESCurrent LiabilitiesBank overdraft 32,889 215,940Accrued expenses 380,917 370,726Withdrawals payable 325,198 72,532






$2015

$INCOMEInterest for attribution purposes — 45,726 Dividends 4,233,940 4,955,811 Changes in fair value:

Net realized gain (loss) on investments 5,950,711 13,485,229 Net unrealized gain (loss) on investments 15,098,093 (21,944,270)

25,282,744 (3,457,504)

EXPENSESManagement fees and guarantee charge 3,199,991 3,659,561 Operating expenses 1,184,804 1,352,271

4,384,795 5,011,832









from Operations 67,088 324 - per unit 0.86 0 .05



from Operations 2,989 (325)- per unit 0.73 (0 .08)



Canadian Equity

DFS GIF – CANADIAN EQUITY – JARISLOWSKY FRASER (cont.)




2016$

2015$



PremiumsSeries 3 128,081 216,981Series 5 4,071,819 3,761,592Series 6* 744,963 93,329Series 7* 13,423 20,001

4,958,286 4,091,903

WithdrawalsSeries 3 (1,117,325) (1,510,767)Series 5 (20,446,088) (31,516,958)Series 6* (14,110) (51)Series 7* — —

(21,577,523) (33,027,776)




2016$

2015$





Investments purchased (384,757) (99,239)Receivable for securities sold (29,051) 89,196 Accrued expenses 10,191 (79,326)











Cost

$

Fair Value

$

INVESTMENT FUNDS (100.5%)Jarislowsky Fraser Canadian Equity Fund 4,782,921 146,248,786 155,659,188



NET ASSETS (100%) 154,950,566




Toronto-Dominion Bank 8 .5%Jarislowsky Fraser Special Equity Fund 7 .4%Royal Bank of Canada 6 .8%Scotiabank 6 .2%Enbridge 5 .0%Canadian Natural Resources 4 .7%Canadian National Railway Company 4 .5%Manulife Financial Corporation 3 .9%Open Text Corporation 3 .4%Alimentation Couche-Tard 3 .3%SNC-Lavalin Group 2 .6%Gildan Activewear 2 .5%Canadian Tire Corporation 2 .5%Thomson Reuters Corporation 2 .5%Cenovus Energy 2 .5%Loblaw Companies 2 .4%Potash Corporation of Saskatchewan 2 .3%Intact Financial Corporation 2 .3%Metro 2 .2%Pembina Pipeline Corporation 2 .2%Vermilion Energy 2 .0%Great-West Lifeco 1 .9%Saputo 1 .9%Industrial Alliance, Insurance and Financial Services 1 .8%CGI Group 1 .8%

Canadian Equity






Investment ObjectiveTo achieve long-term capital appreciation while continuing to emphasize the preservation of capital by investing primarily in large cap Canadian equity securities .

Investment StrategyTo invest primarily in Canadian equity securities in areas of the Canadian economy where superior rates of growth are expected .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

S&P/TSX 3 .00 3,716,898 3,362,033




Canadian Equity






Series 3 7.44 6 .51 6 .89 6 .33 5 .34Series 5 7.90 6 .86 7 .22 6 .58 5 .52Series 6* 5.65 4 .92 — — —Series 7* 5.69 4 .92 — — —


Series 3 3,912 4,378 5,956 6,657 6,993Series 5 150,111 146,180 182,121 178,606 158,237Series 6* 892 94 — — —Series 7* 36 20 — — —

Number of units outstanding (000)Series 3 526 673 864 1,052 1,310Series 5 19,011 21,301 25,226 27,126 28,644Series 6* 158 19 — — —Series 7* 6 4 — — —

Management expense ratio (MER)1 (%)Series 3 3.59 3 .58 3 .59 3 .59 3 .20Series 5 2.92 2 .91 2 .92 2 .91 2 .60Series 6* 2.93 2 .87 — — —Series 7* 2.41 2 .36 — — —







Canadian Equity

DFS GIF – CANADIAN EQUITY – FIDELITY TRUE NORTH®*

® Fidelity True North is a registered trademark of FMR Corp.






Toronto-Dominion Bank 8 .8%Canadian National Railway Company 4 .1%Suncor Energy 3 .6%CGI Group 3 .4%Rogers Communications 3 .3%Royal Bank of Canada 3 .2%Loblaw Companies 3 .0%Enbridge 2 .7%Manulife Financial Corporation 2 .7%Alimentation Couche-Tard 2 .4%











1 Year 10,863 8 .6% 10,901 9 .0% 10,915 9 .1% 10,976 9 .8%3 Years 11,783 5 .6% 11,916 6 .0% — — — —5 Years 15,254 8 .8% 15,540 9 .2% — — — —Since Inception 21,133 9 .7% 21,751 10 .1% 11,595 5 .3% 11,769 5 .9%





$2015









$2015



3,755,211 (4,616)


1,000,812 922,286

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 2,754,399 (926,902)













® Fidelity True North is a registered trademark of FMR Corp.




2016$

2015$




8,280,234 9,940,120

WithdrawalsSeries 3 (316,875) (319,923)Series 5 (5,091,131) (3,926,848)Series 6 (1,141,697) (1,375,947)Series 7 (388,575) (5,499)

(6,938,278) (5,628,217)



2016$

2015$



Adjustments for:Net realized gain (loss) (1,171,306) (1,919,545)Net unrealized gain (loss) (2,010,530) 2,240,320Non-cash distribution from investments (573,375) (316,159)


Investments purchased (4,212,346) (6,169,444)Accrued expenses 10,753 9,309Payable for securities purchased (104,619) 76,260







Canadian Equity

DFS GIF – CANADIAN EQUITY – FIDELITY TRUE NORTH® (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)Fidelity True North® Fund, Series O 713,951 28,071,101 34,092,540



NET ASSETS (100%) 34,004,622




Toronto-Dominion Bank 8 .8%Canadian National Railway Company 4 .1%Suncor Energy 3 .6%CGI Group 3 .4%Rogers Communications 3 .3%Royal Bank of Canada 3 .2%Loblaw Companies 3 .0%Enbridge 2 .7%Manulife Financial Corporation 2 .7%Alimentation Couche-Tard 2 .4%Metro 2 .4%Constellation Software 2 .0%Restaurant Brands International 2 .0%Power Financial Corporation 2 .0%Peyto Exploration & Development Corporation 1 .8%SNC-Lavalin Group 1 .8%Intact Financial Corporation 1 .7%Tahoe Resources 1 .6%Precision Drilling Corporation 1 .5%PrairieSky Royalty 1 .5%ARC Resources 1 .4%Franco-Nevada Corporation 1 .4%Canadian Natural Resources 1 .3%Fairfax Financial Holdings 1 .2%Eldorado Gold Corporation 1 .1%





Investment ObjectiveTo achieve strong long-term capital growth by investing primarily in equity securities of Canadian companies that have a history of strong capital growth over the long-term . The fundamental investment of this Fund is to achieve long-term capital appreciation while still emphasizing the preservation of capital by investing primarily in Canadian equity securities .

Investment StrategyTo invest primarily in small, medium and large Canadian companies . The Fund may also invest in a limited portion of foreign securities . The Fund may also use, to a lesser degree, derivatives such as options, futures, forward contracts and swaps to protect against losses caused by changes in stock prices or exchange rates .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$







Canadian Equity









%


December 31, 2016$


December 31, 2015$

S&P/TSX Capped 3 .00 635,546 566,307





Canadian Equity







Series 3 1,377 1,197 1,024 928 941Series 5 21,561 21,463 22,841 20,048 14,045Series 6 10,218 6,259 2,577 — —Series 7 849 989 81 — —

Number of units outstanding (000)Series 3 130 123 102 104 127Series 5 1,982 2,151 2,225 2,197 1,868Series 6 1,762 1,178 473 — —Series 7 144 185 15 — —







Canadian Equity

DFS GIF – CANADIAN EQUITY – FRANKLIN BISSETT*






Brookfield Asset Management 5 .8%Canadian National Railway Company 5 .2%Royal Bank of Canada 5 .1%Toronto-Dominion Bank 5 .0%Canadian Imperial Bank of Commerce 4 .6%Bank of Montreal 4 .4%Restaurant Brands International 4 .3%Scotiabank 3 .9%Enbridge 3 .5%Canadian Pacific Railway 3 .4%


Series 1** Series 1** Series 3 Series 3 Series 5 Series 5 Series 6 Series 6 Series 7 Series 7











1 Year — — 11,951 19 .5% 12,021 20 .2% 12,035 20 .3% 12,097 21 .0%3 Years — — 11,574 5 .0% 11,788 5 .6% — — — —5 Years — — 15,562 9 .2% 15,994 9 .8% — — — —10 Years — — 15,134 4 .2% — — — — — —Since Inception 10,101 1 .0% 25,309 5 .7% 15,234 4 .7% 11,471 4 .9% 11,630 5 .4%

Series IGP** Series IGP**



1 Year — —3 Years — —5 Years — —10 Years — —Since Inception 10,117 1 .2%

** Beginning of operations in November 2016.

Series 1** Series 3 Series 5 Series 6

Series IGP**

Series 7




$2015



67,821,364 29,701,793LIABILITIESCurrent LiabilitiesAccrued expenses 192,304 81,517Withdrawals payable 40,550 9,260Payable for securities purchased 68,845 —


NET ASSETS PER UNITSeries 1 5.05 —Series 3 12.65 10 .59Series 5 13.37 11 .12Series 6 5.74 4 .77Series 7 5.82 4 .81Series IGP 10.12 —




$2015

$INCOMEDividends 1,343,256 650,483Changes in fair value:


6,902,458 (2,373,329)


1,106,148 1,140,210



from Operations 160,406 —- per unit 0.05 —

Average Number of Units 3,159,614 —













SERIES IGP*Increase (Decrease) in Net Assets

from Operations 32,570 —- per unit 0.12 —

Average Number of Units 277,616 —

* Beginning of operations in November 2016.

Canadian Equity

DFS GIF – CANADIAN EQUITY – FRANKLIN BISSETT (cont.)




2016$

2015$



PremiumsSeries 1* 15,937,034 —Series 3 12,338,702 691,411Series 5 5,791,880 1,183,404Series 6 2,246,595 1,121,082Series 7 166,547 18,549Series IGP* 2,783,426 —

39,264,184 3,014,446

WithdrawalsSeries 1* (236,989) —Series 3 (3,346,937) (3,786,105)Series 5 (2,848,804) (4,557,027)Series 6 (666,913) (745,064)Series 7 (19,176) (1,096)Series IGP* (33,026) —

(7,151,845) (9,089,292)





$2015



Adjustments for:Net realized gain (loss) (1,422,592) (2,362,585)Net unrealized gain (loss) (4,136,610) 5,386,397Non-cash distribution from investments (1,343,256) (650,483)


Investments purchased (36,311,598) (701,193)Receivable for securities sold (7,022) (1,297)Accrued expenses 110,787 (24,057)Payable for securities purchased 68,845 (4,460)

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (31,924,840) 6,072,663


NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 31,927,480 (6,074,039)







Cost

$

Fair Value

$

INVESTMENT FUNDS (100.0%)Franklin Bissett Canadian Equity Fund, Series O 455,491 55,979,874 67,494,746



NET ASSETS (100%) 67,519,665




Brookfield Asset Management 5 .8%Canadian National Railway Company 5 .2%Royal Bank of Canada 5 .1%Toronto-Dominion Bank 5 .0%Canadian Imperial Bank of Commerce 4 .6%Bank of Montreal 4 .4%Restaurant Brands International 4 .3%Scotiabank 3 .9%Enbridge 3 .5%Canadian Pacific Railway 3 .4%Onex Corporation 3 .3%Saputo Group 2 .8%Alimentation Couche-Tard 2 .6%Metro 2 .3%Power Financial Corporation 2 .1%Thomson Reuters Corporation 2 .0%Toromont Industries Ltd 1 .9%Inter Pipeline 1 .9%Atco Ltd 1 .9%Dollarama 1 .7%Home Capital Group 1 .7%TransCanada Corporation 1 .6%MacDonald, Dettwiler and Associates Ltd 1 .6%Stantec 1 .6%Enghouse Systems Ltd 1 .6%

Canadian Equity






Investment ObjectiveThe fundamental investment objective of this Fund is to achieve long-term capital appreciation while continuing to emphasize the preservation of capital by investing primarily in Canadian equity securities .

Investment StrategyTo invest primarily in mid to large cap Canadian equity securities of growth-oriented companies . The Fund may also have a foreign equity component .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$



Investment Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds (including limited partnerships) and master asset vehicles (included in the bonds) in the table “Investment Measured at Fair Value within the Levels” also represent the fair value of investments in structured entities .











%


December 31, 2016$


December 31, 2015$

S&P/TSX 3 .00 1,914,960 814,325




Canadian Equity






Series 1* 5.05 — — — —Series 3 12.65 10 .59 11 .80 10 .93 9 .18Series 5 13.37 11 .12 12 .31 11 .34 9 .47Series 6 5.74 4 .77 5 .27 — —Series 7 5.82 4 .81 5 .29 — —Series IGP* 10.12 — — — —


Series 1* 15,860 — — — —Series 3 26,914 15,132 20,052 21,070 20,829Series 5 17,245 12,032 16,838 13,848 7,284Series 6 4,529 2,412 2,289 — —Series 7 189 35 20 — —Series IGP* 2,783 — — — —

Number of units outstanding (000)Series 1* 3,140 — — — —Series 3 2,127 1,429 1,699 1,927 2,270Series 5 1,290 1,082 1,367 1,221 769Series 6 790 506 435 — —Series 7 33 7 4 — —Series IGP* 275 — — — —

Management expense ratio (MER)1 (%)Series 1* 3.98 — — — —Series 3 3.59 3 .59 3 .59 3 .59 3 .20Series 5 2.97 2 .97 2 .98 2 .98 2 .70Series 6 2.80 2 .79 2 .83 — —Series 7 2.41 2 .41 2 .41 — —Series IGP* 2.38 — — — —







Canadian Equity

DFS GIF – SPECIALTY EQUITY – NEI NORTHWEST*






Parex Resources 6 .2%Premium Brands Holdings Corporation 5 .6%Home Capital Group 5 .4%Kinaxis 4 .3%Lassonde Industries 4 .3%New Flyer Industries 4 .0%Winpak Ltd 3 .5%Dollarama 3 .5%Boyd Group Income Fund 3 .5%Fortuna Silver Mines 3 .3%











1 Year 11,718 17 .2% 11,776 17 .8% 11,781 17 .8% 11,831 18 .3%3 Years 9,928 -0 .2% 10,094 0 .3% — — — —5 Years 11,591 3 .0% 11,905 3 .5% — — — —10 Years 12,724 2 .4% — — — — — —Since Inception 12,830 2 .5% 11,147 1 .2% 9,698 -1 .1% 9,805 -0 .7%





$2015









$2015

$INCOMEInterest for attribution purposes — 5,702Dividends 162,463 22,421Changes in fair value:

Net realized gain (loss) on investments 9,033 89,813Net unrealized gain (loss) on investments 2,924,903 (1,588,685)

3,096,399 (1,470,749)


539,138 594,820

















2016$

2015$



PremiumsSeries 3 143,903 109,198Series 5 1,487,577 1,592,286Series 6 508,080 797,418Series 7 — —

2,139,560 2,498,902

WithdrawalsSeries 3 (615,534) (871,602)Series 5 (2,509,234) (3,921,398)Series 6 (365,709) (213,971)Series 7 — —

(3,490,477) (5,006,971)




$2015



Adjustments for:Net realized gain (loss) (9,033) (89,813)Net unrealized gain (loss) (2,924,903) 1,588,685Non-cash distribution from investments (162,463) (22,421)


Investments purchased (662,087) (684,816)Receivable for securities sold 1,374 14,938Accrued expenses 2,898 (12,150)Payable for securities purchased (10,172) (6,230)








Canadian Equity

DFS GIF – SPECIALTY EQUITY – NEI NORTHWEST (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.1%)NEI Northwest Specialty Equity Fund, Series I 866,415 14,448,764 16,701,009



NET ASSETS (100%) 16,680,065




Parex Resources 6 .2%Premium Brands Holdings Corporation 5 .6%Home Capital Group 5 .4%Kinaxis 4 .3%Lassonde Industries 4 .3%New Flyer Industries 4 .0%Winpak Ltd 3 .5%Dollarama 3 .5%Boyd Group Income Fund 3 .5%Fortuna Silver Mines 3 .3%Element Fleet Management Corporation 3 .3%Laurentian Bank of Canada 2 .8%Andrew Peller 2 .7%FirstService Corporation 2 .7%Descartes Systems Group 2 .6%Stella-Jones 2 .6%Badger Daylighting 2 .6%Advantage Oil & Gas 2 .5%Bonterra Energy 2 .5%Parkland Fuel Corporation 2 .5%Industrial Alliance, Insurance and Financial Services 2 .5%Osisko Gold Royalties 2 .4%TORC Oil & Gas 2 .3%Callidus Capital Corporation 2 .2%Stantec 1 .6%





Investment ObjectiveTo achieve capital appreciation over the longer term by investing primarily in the equity of smaller, fast growing Canadian companies with small market capitalizations under a billion dollars .

Investment StrategyTo invest primarily in common shares and other equity securities issued by companies that are financially strong and have distinct competitive advantages at relative valuations .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$








Canadian Equity








%


December 31, 2016$


December 31, 2015$

S&P/TSX Small Cap (50%) 3 .00 191,882 231,847S&P/TSX Completion (50%) 3 .00 191,882 154,565





Canadian Equity







Series 3 3,145 3,125 4,335 5,197 6,513Series 5 12,083 11,244 15,076 16,912 14,787Series 6 1,432 1,088 618 — —Series 7 20 17 19 — —

Number of units outstanding (000)Series 3 490 571 698 804 1,174Series 5 1,777 1,948 2,317 2,511 2,568Series 6 295 264 133 — —Series 7 4 4 4 — —







Canadian Equity

DFS GIF – SMALL CAP – FRANKLIN BISSETT*






Brookfield Asset Management 5 .8%Canadian National Railway Company 5 .2%Royal Bank of Canada 5 .1%Toronto-Dominion Bank 5 .0%Canadian Imperial Bank of Commerce 4 .6%Bank of Montreal 4 .4%Restaurant Brands International 4 .3%Scotiabank 3 .9%Enbridge 3 .5%Canadian Pacific Railway 3 .4%











1 Year 12,752 27 .5% 12,819 28 .2% 12,809 28 .1% 12,861 28 .6%3 Years 9,508 -1 .7% 9,691 -1 .0% — — — —5 Years 15,161 8 .7% 15,585 9 .3% — — — —10 Years 13,450 3 .0% — — — — — —Since Inception 34,510 7 .7% 14,687 4 .3% 9,682 -1 .1% 9,754 -0 .9%





$2015



19,404,952 16,226,975LIABILITIESCurrent LiabilitiesAccrued expenses 52,665 44,878Withdrawals payable 19,895 —Payable for securities purchased 93,264 13,653






$2015


Net realized gain (loss) on investments (37,641) 578,120Net unrealized gain (loss) on investments 4,637,655 (4,748,834)

4,839,021 (3,805,772)


576,799 688,255














Canadian Equity

DFS GIF – SMALL CAP – FRANKLIN BISSETT (cont.)




2016$

2015$



PremiumsSeries 3 338,684 227,270Series 5 1,250,361 968,762Series 6 1,087,194 863,230Series 7 300 1,000

2,676,539 2,060,262

WithdrawalsSeries 3 (1,329,570) (2,141,551)Series 5 (2,190,131) (3,827,903)Series 6 (347,697) (569,079)Series 7 (679) (89,414)

(3,868,077) (6,627,947)




$2015



Adjustments for:Net realized gain (loss) 37,641 (578,120)Net unrealized gain (loss) (4,637,655) 4,748,834Non-cash distribution from investments (239,007) (364,942)


Investments purchased (1,387,397) (803,179)Receivable for securities sold 4,714 21,242Accrued expenses 7,787 (25,506)Payable for securities purchased 79,611 (207)





Cash (bank overdraft), beginning of year 668 (3,863)



Canadian Equity




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.2%)Franklin Bissett Small Cap Fund, Series O 222,739 16,237,506 19,282,509



NET ASSETS (100%) 19,239,128




Brookfield Asset Management 5 .8%Canadian National Railway Company 5 .2%Royal Bank of Canada 5 .1%Toronto-Dominion Bank 5 .0%Canadian Imperial Bank of Commerce 4 .6%Bank of Montreal 4 .4%Restaurant Brands International 4 .3%Scotiabank 3 .9%Enbridge 3 .5%Canadian Pacific Railway 3 .4%Onex Corporation 3 .3%Saputo Group 2 .8%Alimentation Couche-Tard 2 .6%Metro 2 .3%Power Financial Corporation 2 .1%Thomson Reuters Corporation 2 .0%Toromont Industries Ltd 1 .9%Inter Pipeline 1 .9%Atco Ltd 1 .9%Dollarama 1 .7%Home Capital Group 1 .7%TransCanada Corporation 1 .6%MacDonald, Dettwiler and Associates Ltd 1 .6%Stantec 1 .6%Enghouse Systems Ltd 1 .6%





Investment ObjectiveTo provide investors with long-term capital appreciation . The Fund invests mainly in shares of Canadian companies with small to medium market capitalizations which are expected to provide above-average returns .

Investment StrategyTo be fully diversified at all times to compensate for the volatility inherent in investing in small capitalization equities .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

S&P/TSX Small Cap 3 .00 366,846 360,677




Canadian Equity









Number of units outstanding (000)Series 3 419 487 607 710 818Series 5 504 565 739 684 407Series 6 571 396 331 — —Series 7 7 7 26 — —







Foreign Equity

DFS GIF – AMERICAN EQUITY – MFS*






JPMorgan Chase & Company 4 .3%Bank of America Corporation 3 .6%Visa 3 .0%Alphabet, Class A 2 .6%Goldman Sachs Group 2 .5%American Tower Corporation 2 .5%Thermo Fisher Scientific 2 .5%Broadcom 2 .3%Schlumberger 2 .3%Comcast Corporation 2 .2%
















$2015


or loss (FVTPL) 21,741,988 20,461,002Premiums receivable 51,399 240,009Receivable for securities sold 57,429 —

21,850,816 20,716,490LIABILITIESCurrent LiabilitiesBank overdraft 52,666 —Accrued expenses 55,061 50,948Withdrawals payable 40,247 2,133Payable for securities purchased — 9,703






$2015

$INCOMEInterest for attribution purposes — 119Dividends 333,056 387,819Changes in fair value:

Net realized gain (loss) on investments 2,389,802 2,361,641Net unrealized gain (loss) on investments (1,433,874) 325,382

1,288,984 3,074,961



656,013 585,448

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 632,971 2,489,513
















2016$

2015$




5,228,780 8,156,671

WithdrawalsSeries 3 (1,085,302) (917,331)Series 5 (2,626,648) (1,876,284)Series 6 (1,036,742) (493,178)Series 7 (63,923) —

(4,812,615) (3,286,793)




$2015



Adjustments for:Net realized gain (loss) (2,389,802) (2,361,641)Net unrealized gain (loss) 1,433,874 (325,382)Non-cash distribution from investments (297,528) (331,597)


Investments purchased (3,624,917) (5,865,110)Receivable for securities sold (57,429) —Accrued expenses 4,113 16,481Payable for securities purchased (9,703) (1,924)



NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 642,889 4,642,029



CASH (BANK OVERDRAFT), END OF YEAR (52,666) 15,479


Foreign Equity

DFS GIF – AMERICAN EQUITY – MFS (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.2%)MFS MB U .S . Equity Core Fund 1,406,610 19,540,284 21,741,988



NET ASSETS (100%) 21,702,842




JPMorgan Chase & Company 4 .3%Bank of America Corporation 3 .6%Visa 3 .0%Alphabet, Class A 2 .6%Goldman Sachs Group 2 .5%American Tower Corporation 2 .5%Thermo Fisher Scientific 2 .5%Broadcom 2 .3%Schlumberger 2 .3%Comcast Corporation 2 .2%Danaher Corporation 2 .1%Accenture 2 .1%Alphabet, Class C 2 .0%Cognizant Technology Solutions Corporation 2 .0%Mastercard 1 .9%Mondelez International 1 .9%Canadian National Railway Company 1 .9%Fidelity National Information Services 1 .9%EOG Resources 1 .8%Newell Brands 1 .8%Johnson & Johnson 1 .8%Honeywell International 1 .7%Monsanto Corporation 1 .7%BlackRock 1 .6%Crown Holdings 1 .4%





Investment ObjectiveTo outperform the S&P 500 .

Investment StrategyTo invest mainly in large cap equity securities of corporations located in the United States .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$








Foreign Equity








%


December 31, 2016$


December 31, 2015$

S&P 500 3 .00 644,384 620,303





Foreign Equity








Number of units outstanding (000)Series 3 583 687 754 815 888Series 5 1,496 1,536 1,272 1,094 426Series 6 938 720 182 — —Series 7 24 22 4 — —







Foreign Equity

DFS GIF – AMERICAN EQUITY VALUE – DESJARDINS*






Bank of America Corporation 4 .1%JPMorgan Chase & Company 3 .9%Exxon Mobil Corporation 3 .5%Chevron Corporation 3 .3%Citigroup 3 .2%Intel Corporation 2 .7%Wells Fargo & Company 2 .6%Cisco Systems 2 .5%Merck & Company 2 .4%Bristol-Myers Squibb Company 1 .8%













1 Year 10,720 7 .2% 10,778 7 .8% 10,793 7 .9% 10,810 8 .1% 10,878 8 .8%3 Years 14,632 13 .5% 14,864 14 .1% 14,927 14 .3% — — — —5 Years 20,897 15 .9% 21,456 16 .5% 21,584 16 .6% — — — —10 Years 14,243 3 .6% 14,983 4 .1% — — — — — —Since Inception 17,192 2 .6% 12,433 1 .2% 17,340 6 .2% 14,413 13 .7% 14,634 14 .3%





$2015









$2015


Net realized gain (loss) on investments 1,109,594 715,627Net unrealized gain (loss) on investments 911,338 2,162,597

2,542,875 3,336,137



774,523 659,274















from Operations (764) 41,995- per unit (0.02) 0 .79


Foreign Equity

DFS GIF – AMERICAN EQUITY VALUE – DESJARDINS (cont.)




2016$

2015$



PremiumsSeries 1 83,611 677,205Series 3 525,895 920,071Series 5 2,708,476 4,057,269Series 6 2,210,345 3,661,496Series 7 104,099 366,111

5,632,426 9,682,152

WithdrawalsSeries 1 (337,827) (243,628)Series 3 (878,027) (787,420)Series 5 (3,537,789) (1,717,631)Series 6 (1,010,956) (633,242)Series 7 (361,501) (31,640)

(6,126,100) (3,413,561)

NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF YEAR 24,790,506 23,515,828,



$2015



Adjustments for:Net realized gain (loss) (1,109,594) (715,627)Net unrealized gain (loss) (911,338) (2,162,597)Non-cash distribution from investments (457,763) (412,534)


Investments purchased (2,917,609) (6,939,731)Accrued expenses 4,399 21,496Payable for securities purchased 89,505 (111,488)

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES 579,860 (6,325,740)


NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES (600,741) 6,331,439

Effect of exchange rate changes on foreign cash (183) 992





Foreign Equity




Cost

$

Fair Value

$

INVESTMENT FUNDS (99.8%)Desjardins American Equity Value Fund, I-Class 926,156 18,140,222 24,739,481



NET ASSETS (100%) 24,790,506




Bank of America Corporation 4 .1%JPMorgan Chase & Company 3 .9%Exxon Mobil Corporation 3 .5%Chevron Corporation 3 .3%Citigroup 3 .2%Intel Corporation 2 .7%Wells Fargo & Company 2 .6%Cisco Systems 2 .5%Merck & Company 2 .4%Bristol-Myers Squibb Company 1 .8%Anadarko Petroleum Corporation 1 .7%PNC Financial Services Group 1 .6%Walgreens Boots Alliance 1 .6%Prudential Financial 1 .5%Chubb 1 .5%Ametek 1 .4%Hess Corporation 1 .4%United Parcel Service 1 .4%Verizon Communications 1 .4%CSX Corporation Inc . 1 .3%Comcast Corporation 1 .3%Total 1 .3%M&T Bank Corporation 1 .3%MetLife 1 .3%Lockheed Martin Corporation 1 .3%





Investment ObjectiveTo provide investors with long-term capital growth by investing primarily in U .S . equities .

Investment StrategyTo invest primarily in the common shares of high quality, publicly traded mid to large United States companies across a wide range of market sectors .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

S&P 500 3 .00 721,182 679,820




Foreign Equity








Series 1 2,900 2,971 2,212 1,963 1,514Series 3 3,380 3,508 2,927 2,514 2,056Series 5 11,989 11,951 8,148 4,647 1,542Series 6 6,237 4,543 1,116 — —Series 7 285 543 167 — —

Number of units outstanding (000)Series 1 337 370 317 334 339Series 3 359 401 386 396 429Series 5 1,255 1,351 1,064 726 319Series 6 865 682 194 — —Series 7 39 81 29 — —







Foreign Equity

DFS GIF – GLOBAL DIVIDEND – DESJARDINS*






AT&T 1 .9%Reynolds American 1 .8%Welltower 1 .8%Verizon Communications 1 .8%PPL Corporation 1 .7%Philip Morris International 1 .7%Duke Energy Corporation 1 .7%BCE 1 .7%Altria Group 1 .7%Muenchener Rueckversicherung 1 .6%














$2015









$2015


Net realized gain (loss) on investments 199,122 231,218Net unrealized gain (loss) on investments 26,048 627,014

1,061,150 1,382,564



585,500 384,311















$2015

$



PremiumsSeries 5 1,888,363 3,931,230Series 6 6,030,211 4,155,351Series 7 845,232 388,971

8,763,806 8,475,552

WithdrawalsSeries 5 (1,904,303) (1,869,155)Series 6 (1,599,960) (399,366)Series 7 (377,190) (20,480)

(3,881,453) (2,289,001)




$2015



Adjustments for:Net realized gain (loss) (199,122) (231,218)Net unrealized gain (loss) (26,048) (627,014)Non-cash distribution from investments (774,056) (481,036)


Investments purchased (6,571,751) (7,098,854)Accrued expenses 12,771 16,377Payable for securities purchased 17,072 91,126



NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 4,875,237 6,098,549Increase (Decrease) in cash/bank

overdraft 11,477 1,677Cash (bank overdraft), beginning of year 3,719 2,042


Foreign Equity

DFS GIF – GLOBAL DIVIDEND – DESJARDINS (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.2%)Desjardins Global Dividend Fund, I-Class 1,068,511 19,117,581 20,632,945



NET ASSETS (100%) 20,585,204




AT&T 1 .9%Reynolds American 1 .8%Welltower 1 .8%Verizon Communications 1 .8%PPL Corporation 1 .7%Philip Morris International 1 .7%Duke Energy Corporation 1 .7%BCE 1 .7%Altria Group 1 .7%Muenchener Rueckversicherung 1 .6%National Grid 1 .6%Total 1 .5%Royal Dutch Shell 1 .4%WEC Energy Group 1 .4%Vodafone Group 1 .4%Siemens AG 1 .4%Terna – Rete Elettricita Nazionale 1 .4%Entergy Corporation 1 .4%Qualcomm 1 .3%GlaxoSmithKline 1 .3%British American Tobacco 1 .3%Occidental Petroleum Corporation 1 .3%Exxon Mobil Corporation 1 .3%Imperial Brands 1 .3%Ameren Corporation 1 .3%





Investment ObjectiveThe objective of this Fund is to provide dividend income and long term capital appreciation through the investment in equity and equity related securities of companies around the world, including, when deemed appropriate, emerging markets .

Investment StrategyIn order to achieve its investment objective, the Fund invests in companies with high dividend yields and whose management teams optimize their balance sheets through the redemption of shares or reducing debt or by opting to increase cash flows sufficiently to allow for the opportunity for dividend growth . Companies are selected which show stable or high profit growth, a lower than average debt in comparison to their industry average and whose securities are traded at a reasonable price in relation to other companies with similar characteristics . Equity related securities such as American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) may be used to gain exposure to a particular stock or sector .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$







Foreign Equity









%


December 31, 2016$


December 31, 2015$

MSCI World Net 3 .00 513,734 437,431





Foreign Equity







Series 5 9,170 8,985 6,216 3,293 437Series 6 10,511 5,827 1,790 — —Series 7 904 415 37 — —

Number of units outstanding (000)Series 5 1,104 1,105 846 508 87Series 6 1,721 974 331 — —Series 7 146 69 7 — —







Foreign Equity

DFS GIF – GLOBAL EQUITY – MFS*






Citigroup 1 .7%Alphabet 1 .7%Charter Communications 1 .6%Honeywell International 1 .4%US Bancorp 1 .4%Facebook 1 .4%EOG Resources 1 .3%Visa 1 .2%Goldman Sachs Group 1 .2%Cisco Systems 1 .2%











1 Year 9,918 -0 .8% 9,960 -0 .4% 9,957 -0 .4% 9,996 0 .0%3 Years 12,427 7 .5% 12,606 8 .0% — — — —5 Years 16,662 10 .8% 17,060 11 .3% — — — —Since Inception 16,551 6 .4% 9,164 -0 .9% 12,145 7 .1% 12,291 7 .5%





$2015



55,752,338 62,098,541LIABILITIESCurrent LiabilitiesAccrued expenses 134,652 149,485Withdrawals payable 54,434 63,529






$2015

$INCOMEInterest for attribution purposes — 311Dividends 1,248,698 793,957Changes in fair value:

Net realized gain (loss) on investments 6,762,468 4,650,269Net unrealized gain (loss) on investments (6,789,873) 893,583

1,221,293 6,338,120

EXPENSESManagement fees and guarantee charge 1,245,698 730,368Operating expenses 376,236 224,112

1,621,934 954,480Withholding taxes 133,822 91,340

1,755,756 1,045,820






from Operations (524,104) 5,073,491- per unit (0.05) 0 .72








Foreign Equity

DFS GIF – GLOBAL EQUITY – MFS (cont.)





$2015

$



PremiumsSeries 3 413,874 2,873,729Series 5 1,715,382 32,722,724Series 6 666,209 1,418,433Series 7 150,392 —

2,945,857 37,014,886

WithdrawalsSeries 3 (623,503) (94,643)Series 5 (7,904,035) (3,413,672)Series 6 (205,900) (88,088)Series 7 (231) —

(8,733,669) (3,596,403)




$2015



Adjustments for:Net realized gain (loss) (6,762,468) (4,650,269)Net unrealized gain (loss) 6,789,873 (893,583)Non-cash distribution from investments (1,114,876) (702,924)


Investments purchased (906,457) (35,395,097)Receivable for securities sold (6,227) (1,617)Accrued expenses (14,833) 93,484Payable for securities purchased — (6,898)



NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES (5,751,177) 33,433,736Increase (Decrease) in cash/bank

overdraft (6,309) (8,666)Cash (bank overdraft), beginning of year 23,690 32,356




Foreign Equity




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.3%)MFS Global Research Fund 3,224,184 54,750,440 55,724,843



NET ASSETS (100%) 55,563,252




Citigroup 1 .7%Alphabet 1 .7%Charter Communications 1 .6%Honeywell International 1 .4%US Bancorp 1 .4%Facebook 1 .4%EOG Resources 1 .3%Visa 1 .2%Goldman Sachs Group 1 .2%Cisco Systems 1 .2%SBA Communications Corporation 1 .2%Amazon .com 1 .1%Nestlé SA 1 .1%Novartis AG 1 .1%KDDI Corporation 1 .1%Broadcom 1 .0%Roche Holding AG 1 .0%Medtronic 1 .0%Schneider Electric 1 .0%Union Pacific Corporation 1 .0%UBS Group AG 1 .0%Johnson Controls International 1 .0%Aon 1 .0%UnitedHealth Group 1 .0%PPG Industries 1 .0%





Investment ObjectiveTo achieve long-term capital growth by investing primarily in equity securities .

Investment StrategyTo control the level of volatility of return relative to the overall stock markets by maintaining strong geographic diversification and by investing in attractively-valued securities . The Fund will primarily invest in common stocks of American, European, and Asian corporations .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$

Financial Assets at FVTPLInvestment Funds — 62,025,234 — 62,025,234TOTAL — 62,025,234 — 62,025,234













%


December 31, 2016$


December 31, 2015$

MSCI All Country World Net 3 .00 1,644,891 1,775,679




Foreign Equity





Net Asset Value Per Unit as at December 31st ($) 2016* 2015* 2014* 2013* 2012





Series 3 2,850 3,096 167 143 84Series 5 50,538 57,250 22,984 21,840 17,000Series 6 1,993 1,515 121 — —Series 7 183 24 21 — —

Number of units outstanding (000)Series 3 645 695 43 40 30Series 5 11,014 12,426 5,764 6,000 6,071Series 6 328 248 23 — —Series 7 30 4 4 — —







Foreign Equity

DFS GIF – INTERNATIONAL EQUITY – MFS*





Security Name Percentageof Portfolio

Nestlé SA 3 .9%Bayer AG 3 .2%WPP 3 .0%Hoya Corporation 2 .8%Roche Holding AG 2 .8%Compass Group 2 .6%SAP SE 2 .4%Air Liquide 2 .4%ING Groep 2 .3%Schneider Electric 2 .3%













1 Year 9,409 -5 .9% 9,423 -5 .8% 9,505 -4 .9% 9,481 -5 .2% 9,523 -4 .8%3 Years 10,853 2 .8% 10,912 3 .0% 11,203 3 .9% — — — —5 Years 14,651 7 .9% 14,808 8 .2% 15,441 9 .1% — — — —10 Years 7,255 -3 .2% 7,372 -3 .0% — — — — — —Since Inception 12,073 0 .9% 9,848 -0 .1% 8,607 -1 .6% 10,802 2 .7% 10,943 3 .2%





$2015


or loss (FVTPL) 10,519,036 12,617,872Premiums receivable 5,318 17,684Interest, dividends and other receivables 257 272







$2015

$INCOMEInterest for attribution purposes — 256Dividends 372,029 298,732Changes in fair value:

Net realized gain (loss) on investments 625,444 1,075,912Net unrealized gain (loss) on investments (1,318,749) 781,607

(321,276) 2,156,507



397,752 433,637





















$2015

$



PremiumsSeries 1 50,934 180,034Series 3 262,395 360,860Series 5 515,701 1,050,848Series 6 272,685 976,196Series 7 53,696 58,000

1,155,411 2,625,938

WithdrawalsSeries 1 (529,522) (258,988)Series 3 (999,763) (1,387,084)Series 5 (802,663) (1,107,634)Series 6 (280,144) (109,923)Series 7 (53) —

(2,612,145) (2,863,629)




$2015



Adjustments for:Net realized gain (loss) (625,444) (1,075,912)Net unrealized gain (loss) 1,318,749 (781,607)Non-cash distribution from investments (338,225) (271,574)


Investments purchased (499,655) (1,705,538)Receivable for securities sold — 634Interest, dividends and other receivables 15 61Accrued expenses (5,787) 2,925Payable for securities purchased 2,030 1,365

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES 1,376,066 233,545


NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES (1,373,918) (251,769)Increase (Decrease) in cash/bank

overdraft 2,148 (18,224)Cash (bank overdraft), beginning of year 5,443 23,667



Foreign Equity

DFS GIF – INTERNATIONAL EQUITY – MFS (cont.)




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.9%)MFS International Equity Fund 901,374 9,290,434 10,519,036



NET ASSETS (100%) 10,426,398




Nestlé SA 3 .9%Bayer AG 3 .2%WPP 3 .0%Hoya Corporation 2 .8%Roche Holding AG 2 .8%Compass Group 2 .6%SAP SE 2 .4%Air Liquide 2 .4%ING Groep 2 .3%Schneider Electric 2 .3%UBS Group AG 2 .3%AIA Group 2 .2%Taiwan Semiconductor Manufacturing Company 2 .2%Pernod-Ricard 2 .2%Reckitt Benckiser Group 2 .2%Canadian National Railway Company 2 .1%Randstad Holding 2 .0%Moet Hennessy Louis Vuitton 2 .0%Terumo Corporation 1 .9%Danone 1 .8%Beiersdorf AG 1 .8%Novartis AG 1 .8%DBS Group Holdings Ltd 1 .7%Denso Corporation 1 .7%Amadeus IT Holding 1 .7%





Investment ObjectiveThe fundamental investment objective of this Fund is to provide investors with long-term capital growth based on an internationally diversified equity portfolio by investing primarily in Europe and the Far East .

Investment StrategyTo invest its assets primarily in the common shares of large corporations with attractive relative valuations located in many countries .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$








Foreign Equity








%


December 31, 2016$


December 31, 2015$

MSCI EAFE Net 3 .00 332,558 392,372





Foreign Equity









Series 1 1,617 2,240 1,967 2,171 1,892Series 3 4,112 5,158 5,249 6,171 6,105Series 5 3,672 4,175 3,566 3,922 2,437Series 6 830 883 14 — —Series 7 195 147 74 — —

Number of units outstanding (000)Series 1 268 349 361 390 414Series 3 658 777 934 1,077 1,300Series 5 540 584 594 646 493Series 6 154 155 3 — —Series 7 36 26 15 — —







Foreign Equity

DFS GIF – INTERNATIONAL EQUITY GROWTH – DESJARDINS*


SUMMARY FACTS STATEMENT — unauditedd




Tencent Holdings 5 .2%Inditex 5 .0%AIA Group 4 .9%Softbank Corporation 4 .7%ASML Holding 4 .5%Baidu, ADR 4 .5%Alibaba Group Holding 3 .6%Atlas Copco 3 .4%Zalando 2 .9%M3 2 .7%









1 Year 9,452 -5 .5% 9,468 -5 .3% 9,504 -5 .0%3 Years 10,706 2 .3% — — — —Since Inception 15,212 10 .3% 10,426 1 .5% 10,533 1 .8%





$2015


or loss (FVTPL) 2,514,232 2,531,545Premiums receivable 3,115 160Receivable for securities sold 925 2,078

2,523,766 2,534,279LIABILITIESCurrent LiabilitiesAccrued expenses 6,175 6,375Withdrawals payable 1,585 2,397Payable for securities purchased 6,410 135






$2015


Net realized gain (loss) on investments 130,108 86,840Net unrealized gain (loss) on investments (261,427) 206,862

(50,049) 321,018



80,111 71,247

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS (130,160) 249,771










Foreign Equity

DFS GIF – INTERNATIONAL EQUITY GROWTH – DESJARDINS (cont.)





$2015

$


from operations attributable to contract owners (130,160) 249,771

PremiumsSeries 5 186,696 293,300Series 6 552,505 377,424Series 7 — —

739,201 670,724

WithdrawalsSeries 5 (341,507) (167,424)Series 6 (283,310) (92,736)Series 7 — —

(624,817) (260,160)




$2015


from operations attributable to contract owners (130,160) 249,771

Adjustments for:Net realized gain (loss) (130,108) (86,840)Net unrealized gain (loss) 261,427 (206,862)Non-cash distribution from investments (76,670) (25,769)


Investments purchased (540,967) (585,765)Receivable for securities sold 1,153 (2,078)Accrued expenses (200) 1,719Payable for securities purchased 6,275 50

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (105,619) (412,691)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIESPremium payments 736,246 670,649Amounts paid on withdrawals (625,629) (257,958)

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 110,617 412,691Increase (Decrease) in cash/bank

overdraft 4,998 —Cash (bank overdraft), beginning of year 496 496



Foreign Equity




Cost

$

Fair Value

$

INVESTMENT FUNDS (100.2%)Desjardins Overseas Equity Growth Fund, I-Class 138,923 2,411,520 2,514,232



NET ASSETS (100%) 2,509,596




Tencent Holdings 5 .2%Inditex 5 .0%AIA Group 4 .9%Softbank Corporation 4 .7%ASML Holding 4 .5%Baidu, ADR 4 .5%Alibaba Group Holding 3 .6%Atlas Copco 3 .4%Zalando 2 .9%M3 2 .7%L’Oréal 2 .6%Genmab 2 .6%Rolls-Royce Holdings 2 .5%Svenska Handelsbanken 2 .4%Illumina 2 .4%Ferrari 2 .4%Amazon .com 2 .2%Tesla Motors 2 .1%Rakuten 2 .0%Kering 2 .0%Fiat Chrysler Automobiles 1 .9%Investment AB Kinnevik 1 .8%SMC Corporation 1 .7%Compagnie Financière Richemont 1 .7%New Oriental Education & Technology Group 1 .5%





Investment ObjectiveThe objective of this Fund is to achieve long-term capital growth by investing in equity and equity related securities of companies located or operating outside of North America, while when appropriate, also investing in equity and equity related securities of companies located or operating in emerging markets .

Investment StrategyInvestment decisions are backed by extensive research and analysis with preference given to those companies that can sustain above average growth in earnings and cash flow and whose securities are traded at a reasonable price . The investment approach involves a bottom-up, stock driven approach to country and sector allocation and more specifically, those companies with sustainable competitive advantages and strong management teams operating in a favourable market background and display solid financial characteristics .





Level 2$

Level 3$

Total$



Level 2$

Level 3$

Total$














%


December 31, 2016$


December 31, 2015$

MSCI EAFE Net 3 .00 79,330 79,143




Foreign Equity








Series 5 1,334 1,571 1,276 936 158Series 6 1,154 931 569 — —Series 7 22 23 20 — —

Number of units outstanding (000)Series 5 175 195 180 132 30Series 6 221 169 117 — —Series 7 4 4 4 — —







Years Ended December 31, 2016 and 2015

1. ESTABLISHMENT OF THE FUNDSThe Desjardins Financial Security Guaranteed Investment Funds (the “Funds”) consist of thirty-six Funds established by Desjardins Financial Security Life Assurance Company (“Desjardins Financial Security” or the “Company”) in respect of individual variable insurance contracts issued under the Desjardins Financial Security Guaranteed Investment Funds Plan – Helios, Helios2, the Millennia III Plan and the Imperial Growth Plan . The assets of each Fund are segregated from the Company’s other assets and are owned by Desjardins Financial Security . The Funds are not separate legal entities . The Company’s head office is located at 200, rue des Commandeurs, Lévis, Québec, Canada G6V 6R2 .The Funds were established on the following dates by resolutions of the Board of Directors:

Series 1 Series 3 Series 5 Series 6 Series 7 Series IGPINVESTMENT SOLUTIONSConservative — — Oct . 19, 2015 Feb . 24, 2014 Feb . 24, 2014 —Moderate — — Oct . 19, 2015 Feb . 24, 2014 Feb . 24, 2014 —Balanced — — Oct . 19, 2015 Feb . 24, 2014 Feb . 24, 2014 —Growth — — Oct . 19, 2015 Feb . 24, 2014 Feb . 24, 2014 —Maximum Growth — — Oct . 19, 2015 Feb . 24, 2014 Feb . 24, 2014 —

INDIVIDUAL FUNDS

IncomeMoney Market Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 Nov . 7, 2014Income – Fiera Capital Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Bond — — Oct . 19, 2015 Oct . 19, 2015 Oct . 19, 2015 —

Balanced and Asset AllocationDiversified Income – Franklin Quotential — Oct . 30, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Balanced Income – Franklin Quotential — Oct . 30, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Balanced – Fidelity — Dec . 1, 2008 Dec . 1, 2008 Feb . 24, 2014 Feb . 24, 2014 —U .S . Monthly Income – Fidelity — — Oct . 19, 2015 Oct . 19, 2015 Oct . 19, 2015 —Balanced – Desjardins SocieTerra — — Oct . 19, 2015 Oct . 19, 2015 Oct . 19, 2015 —Global Balanced – Jarislowsky Fraser — Nov . 17, 2003 Oct . 29, 2007 Oct . 19, 2015 Oct . 19, 2015 —Canadian Balanced – Fiera Capital Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Balanced – Franklin Bissett — Dec . 5, 2005 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Balanced Growth – Franklin Quotential — Dec . 11, 2006 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Balanced – CI Signature — — May 3, 2010 Feb . 24, 2014 Feb . 24, 2014 —Income and Growth – CI Signature — — Sep . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —Growth and Income – NEI Northwest — Dec . 11, 2006 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Global Growth – NEI Select — Jan . 14, 2002 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Asset Allocation – CI Cambridge — — Sep . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —Growth – Franklin Quotential — Oct . 30, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —

Canadian EquityDividend Income – Franklin Bissett — Apr . 17, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Dividend – NEI Northwest — — Sep . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —Canadian Equity – Jarislowsky Fraser — Dec . 5, 2005 Oct . 29, 2007 Oct . 19, 2015 Oct . 19, 2015 —Canadian Equity – Fidelity True North® — Dec . 1, 2008 Dec . 1, 2008 Feb . 24, 2014 Feb . 24, 2014 —Canadian Equity – Franklin Bissett Nov . 25, 2016 Apr . 17, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 Nov . 25, 2016Specialty Equity – NEI Northwest — Dec . 11, 2006 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Small Cap – Franklin Bissett — Apr . 17, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —

Foreign EquityAmerican Equity – MFS — Apr . 17, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —American Equity Value – Desjardins Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Global Dividend – Desjardins — — Sep . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —Global Equity – MFS — Dec . 1, 2008 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —International Equity – MFS Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —International Equity Growth – Desjardins — — Sep . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —

The annual financial statements (“financial statements”) of the Funds are presented in Canadian dollars (CAD), the Funds’ functional and presentation currency .The main activities of the Funds are disclosed in the section “Strategy in Using Financial Instruments” in the section “Notes to the Financial Statements – Specific Information” pertaining to each Fund .

NOTES TO THE FINANCIAL STATEMENTS


In November 2016, the Company closed the following Fund:

FUND NAME

DFS GIF – Canadian Equity – Fiera Capital

2. BASIS OF PRESENTATION

International Financial Reporting Standards (“IFRS“)These financial statements have been prepared in compliance with International Financial Reporting Standards (“IFRS”), applicable to the preparation of financial statements .

Statement of ComplianceThe policies applied in these financial statements are based on IFRS in effect as of April 13, 2017, the date on which financial statements have been approved for publication by the Audit and Risk Management Committee of the Company .

Significant Accounting PoliciesThe significant measurement and presentation policies applied to prepare these financial statements are described below .

Financial Assets and LiabilitiesThe Funds’ financial assets consist primarily of investments in non-derivative financial instruments and derivative financial instruments presented in the schedule of investment portfolio . Financial liabilities consist primarily of derivative financial instruments .Financial assets and liabilities are recognized on the date the Funds become a party to the contractual provisions of the instrument, namely the trade date .

Classification of Financial InstrumentsThe Funds classify their financial assets and liabilities in the following categories:

Financial assets at fair value through profit or loss (“FVTPL”):• Held for trading: derivative financial instruments;• Designated at FVTPL: all other investments including equity and fixed-income securities .

Financial assets at amortized cost:• Loans and receivables: cash and all other receivables .

Financial liabilities at FVTPL:• Held for trading: derivative financial instruments and short positions .

Financial liabilities at amortized cost:• Bank overdraft and all other payables .A financial instrument is designated at FVTPL if it eliminates or significantly reduces a measurement or a recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases .The Funds’ obligation concerning net assets attributable to Contract Owners is recorded at the redemption amount that approximates fair value . The accounting policies used to measure the fair value of investments and derivative financial instruments are identical to those used in measuring the net asset value for transactions with Contract Owners except where the closing price for financial assets and liabilities is not within the bid-ask spread .As at December 31, 2016 and 2015, there are no differences between the Funds’ net asset value per unit for transactions and their net assets attributable to Contract Owners per unit, in accordance with IFRS .

Determination of the Fair Value of Financial InstrumentsFair value is the price that would be received from selling an asset or paid to transfer a liability in an ordinary transaction between market participants at the valuation date . The fair value of financial assets and liabilities traded in active markets are based on quoted market prices at the close of trading on the disclosure date and there is little subjectivity in its determination . The Funds use the closing price for both financial assets and financial liabilities where this price falls within the bid-ask spread . In circumstances where the closing price is not within the bid-ask spread, the Company determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances .The fair value of financial assets and liabilities that are not traded in an active market, including over-the-counter derivative financial instruments, is determined using valuation techniques . The Funds use a variety of methods and make assumptions that are based on existing market conditions at each valuation date .Valuation techniques include the use of comparable recent arm’s length transactions, the fair value of other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other techniques commonly used by market participants and which make the maximum use of observable inputs . Refer to Note 7, “Financial Instruments Disclosures” for further information about the Funds’ fair value measurements .


NOTES TO THE FINANCIAL STATEMENTS (cont.)

LiquidityCash (bank overdraft) is measured at cost, which closely approximates fair value .Money Market SecuritiesMoney market securities are recorded at cost, together with accrued interest, which closely approximates fair value .Equities and Index-Based InvestmentsEquity securities and index-based investments securities are recorded at the closing price of the accredited stock exchange on which the corresponding security is principally traded . Unlisted warrants are valued with a recognized valuation model, including Black & Scholes .Bonds, Mortgage-Backed Securities and Asset-Backed SecuritiesBonds, mortgage-backed securities and asset-backed securities are valued based on prices obtained from recognized securities dealers .Investment FundsUnits of underlying funds are generally valued based on the net asset value per unit provided by the underlying fund’s manager at the end of each valuation day .Derivative Financial InstrumentsCertain Funds may use an array of derivative financial instruments such as foreign currency forward contracts, forward contracts and futures contracts for hedging purposes or purposes other than hedging, or both . The fair value of derivative financial instruments takes into account the impact of legally binding master netting agreements, if applicable . Refer to the section “Offsetting Financial Assets and Liabilities” for further information about the Fund’s offsetting section .

Foreign Currency Forward Contracts and Forward ContractsThe fair value of these instruments corresponds to the gains or losses that would result from the contract close-out on the valuation date; this value is recorded in “Unrealized appreciation (depreciation) on derivatives” in the Statement of Financial Position .

Futures ContractsFutures contracts are valued at fair value and are settled daily through brokers acting as intermediaries . Any amounts receivable (payable) from the settlement of futures contracts are recorded in “Receivable (Payable) on futures contracts” in the Statement of Financial Position .Valuation of Unlisted Securities and Other InvestmentsWhen the valuation principles of the aforementioned investments are not appropriate, fair value is determined according to the Company’s best estimates, based on established valuation procedures and on prevailing market conditions on each valuation date . These procedures cover, among others, securities no longer traded, securities issued by private corporations and illiquid securities . For further information, refer to Note 3 "Critical Accounting Judgments, Estimates and Assumptions" .

Investment TransactionsInvestment transactions are accounted for on the trade date . Cost is determined on an average cost basis except for money market securities, for which the cost is determined using the First In First Out method . The average cost does not include amortization of premiums or discounts on fixed-income securities with the exception of stripped bonds . Transaction costs, such as brokerage commissions, incurred in the purchase and sale of securities by the Funds are recognized in the Statement of Comprehensive Income . The difference between the unrealized appreciation (depreciation) of investments at the beginning and at the end of the year is included in “Net unrealized gain (loss) on investments” in the Statement of Comprehensive Income . On disposal of an investment, the difference between the fair value and the cost of the investment is included in “Net realized gain (loss) on investments” in the Statement of Comprehensive Income .

Securities Lending and Repurchase TransactionsCertain Funds may enter into securities lending and repurchase transactions through the securities lending program of the Funds’ custodian, Desjardins Trust Inc . (Trust) .The securities loaned and repurchase transactions are not derecognized in the Statement of Financial Position as substantially all the risks and advantages of ownership of these securities are kept .To limit the risk that the counterparty fails to fulfill its obligations, the Funds obtain collateral, representing at least 102% of the contract amount, determined daily based on the fair value of the previous business day’s securities loaned or repurchase transactions . Securities received as collateral in securities lending transactions are not recognized in the Statement of Financial Position as substantially all the risks and advantages of ownership of these securities have not been transferred to the Funds . Cash guarantees received for securities lending and repurchase transactions are recognized as financial assets in “Cash guarantee received for securities lending” and “Cash guarantee received for repurchase transactions”, as appropriate in the Statement of Financial Position . A liability representing the obligation to return the securities is recognized in “Commitments related to securities lending” and “Commitments related to repurchase transactions”, as appropriate .Revenue generated through the securities lending program is shared by the Fund and the Trust at a the rate presented in the “Notes to the Financial Statements – Specific Information” pertaining to each Fund . This revenue is included in “Revenue from securities lending and repurchase transactions” in the Statement of Comprehensive Income .

Offsetting Financial Assets and Financial Liabilities

Financial assets and liabilities are offset in the Statement of Financial Position for the Funds if and only if a Fund has:• a legally enforceable and unconditional right to offset the recognized amounts and• an intention to settle on a net amount, or to close-out the asset and settle the liability simultaneously .


The Funds have a legally enforceable and unconditional right to offset a financial asset and liability when they meet the following criteria:• the right is enforceable in the normal course of business and• the right is enforceable in the event of default, insolvency or bankruptcy .Over-the-counter derivative financial instruments, securities lending, repurchase transactions and receivable for investments sold and payable for investments purchased that are subject to master netting or similar agreements do not meet the criteria for offsetting in the Statement of Financial Position, as they give a right to an offset that is enforceable only in the event of default, insolvency or bankruptcy .

Other Assets and LiabilitiesPremiums receivable, receivable for securities sold, interest, dividends and other receivables and cash guarantee received for securities lending and repurchase transactions are classified as loans and receivables and are recorded at cost .Similarly, accrued expenses, withdrawals payable, payable for securities purchased and interest, dividends and others payables, as well as commitments related to securities lending and repurchase transactions, are classified as financial liabilities and recorded at amortized cost .Given their short-term maturity, their carrying amount approximates their fair value

IncomeInterest for attribution purposes from investments in debt securities and presented in the Statement of Comprehensive Income is recognized as it is earned . The Funds do not amortize premiums paid or discounts received on the purchase of debt securities except for stripped bonds, which are amortized on a straight line basis . Dividends are recognized as income on the ex-dividend date . Interest and dividend distributions received from underlying funds are recorded at the date of distribution . Distributions received from income and royalty trust investments are classified as income, capital gains or return of capital based on amounts reported by the management of these trusts . If such specific information is not available, the Company will determine the split at its discretion . Foreign income is accounted for on a gross amount received and is included in the income section in the Statement of Comprehensive Income . Distributions received in the form of units from underlying funds are presented as a separate line item called “Non-cash distribution from investments” on the statement of cash flows and its equivalent has been removed from the “Investments purchased” line item . For the purposes of presentation, the comparative information has been revised accordingly .On derivative financial instruments contract close-out, the gains and losses from financial derivative financial instruments held for hedging purposes are included in “Net realized gain (loss) on derivatives” in the Statement of Comprehensive Income . Gains and losses from derivative financial instruments held for purposes other than hedging are included in "Net income (loss) from derivatives" in the Statement of Comprehensive Income .

Foreign Currency TranslationThe Funds’ premiums and withdrawals are denominated in Canadian dollars . Foreign currency assets and liabilities denominated in a foreign currency are translated into the functional currency at the exchange rate on each valuation date . Purchases and sales of securities, as well as income and expenses denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates .Foreign exchange gains and losses relating to cash are presented as “Foreign exchange gain (loss) on cash” and those relating to other financial assets and liabilities are presented within “Net realized gain (loss) on investments” and “Net unrealized gain (loss) on investments” in the Statement of Comprehensive Income .

Increase (Decrease) in Net Assets per Unit from Operations Attributable to Contract OwnersThe increase (decrease) in net assets per unit from operations attributable to Contract Owners, presented in the Statement of Comprehensive Income is calculated by dividing the increase (decrease) in net assets from operations attributable to Contract Owners per unit by the average number of units outstanding during the year .

Income TaxesUnder the Income Tax Act (Canada), each Fund is treated as a segregated fund trust . The Fund’s income, as well as gains or losses realized, if any, are allocated to Contract Owners on a regular basis . In the case of interest that accumulates in a registered account, Contract Owners will not receive annual tax slips . However, any amount paid to Contract Owners or former Contract Owners may be subject to be taxed in their hands . On the other hand, for interest that accumulates in a non-registered account, Contract Owners will receive an annual tax slip for any income, gains or losses allocated . Under current tax laws, Funds do not pay income taxes, with the exception of foreign tax withholdings that may apply .In certain circumstances, to avoid double taxation to the Contract Owners, the Funds adjust the cost of the investments held to properly reflect the adjusted cost base for tax purposes .

Investments in EntitiesThe Funds meet the definition of IFRS 10, Consolidated Financial Statements, for investment entities and account for their investments in underlying funds at FVTPL .According to IFRS 12, Disclosure of Interests in Other Entities, the Funds must disclose specific information on their investments in other entities, such as Subsidiaries, Associates and Structured Entities .SubsidiariesAn entity, including investments in any other investment entity, is considered as a subsidiary when it is controlled by another entity . The Fund controls an entity when it has the right to variable returns from its involvement with the entity and through its power over the entity .AssociatesAssociates are investments in entities over which the Fund exercises significant influence without, however, exercising control .



Structured EntitiesStructured Entities are conceived in a way that the right to vote and other similar rights are not determining factors in who exercises control . The Company has determined that its investments in underlying funds (including limited partnerships), index-based investments, asset-backed securities, mortgage-backed securities and master asset vehicles (included in the bonds) are structured entities, unless the specified relationship is different .Refer to the section “Notes to the Financial Statements – Specific Information” pertaining to each Fund for more information on Investments in Entities .

Accounting Standard Issued but not yet AppliedIn July 2014, the International Accounting Standards Board (“IASB”) issued the complete and final version of IFRS 9, Financial Instruments (“IFRS 9”), which will replace IAS 39, Financial Instruments: Recognition and Measurement (“IAS 39”) . IFRS 9 includes, among others, the requirements for the classification and measurement of financial assets and liabilities .IFRS 9 sets out a new classification and measurement model for financial assets to determine whether a financial asset should be classified at amortized cost, at FVTPL or at fair value through other comprehensive income . This model is based on the contractual cash flow characteristics of the financial asset and the business model under which the financial asset is held . The valuation basis of financial assets, namely amortized cost or fair value, may need to be changed, as well as the recognition of unrealized gains and losses arising from changes in fair value . For the classification and measurement of financial liabilities, the new standard essentially carries forward the current requirements under IAS 39 .The Funds will have to adopt IFRS 9 retrospectively for annual periods beginnning on or after January 1, 2018 . However, the restatement of comparative periods is not mandatory as an exemption from applying the standard allows comparative periods to be presented in accordance with the previous GAAP under certain conditions . A team has been assigned to the project to highlight the following: the changes in disclosure and financial reporting as well as in systems and processes, disclosures and training . The project is progressing according to the proposed implementation schedule . The Manager continues to assess the impact of adopting IFRS 9 .

3. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONSThe preparation of financial statements requires the Management of the Company to use judgment in applying its accounting policies and to make estimates and assumptions about the future . Actual results may differ from these estimates . The following paragraphs discuss the most significant accounting judgments and estimates that the Funds have made in preparing the financial statements .

Fair Value Measurement of Derivatives Financial Instruments and Securities not Quoted in an Active MarketThe Funds may hold financial instruments that are not quoted in active markets, including derivative financial instruments . Fair value is determined based on models that make maximum use of observable inputs and rely as little as possible on unobservable inputs . The Funds consider the data observable if market data is readily available, distributed or updated on a regular basis, reliable and verifiable, not proprietary and provided by independent sources that are actively involved in the relevant market . The models used to determine fair values are validated and periodically reviewed by experienced personnel of the Company .When no quoted prices are available, the fair value is estimated using present value or other valuation methods, which are influenced by the assumptions used concerning the amount and timing of estimated future cash flows and discount rates, which reflect varying degrees of risk, including liquidity risk, credit risk, risks related to interest rates, exchange rates, and price and rate volatility .The calculation of the fair values may differ given the role that judgment plays in applying the valuation techniques and the acceptable estimation . Estimated fair value reflects market conditions on a given date and for this reason, it may not be representative of future fair values . Refer to Note 7, “Financial Instruments Disclosures” for further information on fair value measurement of financial instruments .

Classification and Measurement of Investments and Application of the Fair Value OptionIn classifying and measuring financial instruments held by the Funds, the Company is required to make significant judgments about whether or not the business of the Funds is to invest on a total return basis for the purpose of applying the fair value option for financial assets under IAS 39 . The most significant judgment lies in determining if certain investments are held-for-trading, and if the fair value option can be applied to those which are not . For further information on financial instruments, refer to Note 2, “Basis of Presentation” .

4. NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS

Structure of the Funds and the Units attributedThe Funds are wholly owned assets of Desjardins Financial Security, which have been segregated from the Company’s other assets . Except for instances where the Company has acquired an interest in a Fund, the Funds’ assets may only be used to pay benefits under the Contracts .Each Fund has a series of units, which are attributed to Contracts for the purpose of determining the value of benefits to the units attributable to those Contracts . A Contract Owner acquires no direct claim on the units or assets of a Fund by purchasing a Contract but only the benefits that are provided under the Contract .Units within the same series of Funds have the same net asset value per unit . Subject to the Company’s administrative rules, Contract Owners have the right to make transactions under their Contracts such as premiums, withdrawals and switches between units of Funds . As a result of these transactions, units are attributed to and withdrawn from the Contract based on each Contract’s terms and conditions or as provided by law . Since the Contract Owner does not own units of a Fund, ownership of units cannot be sold or transferred to another party . There are no voting rights associated with the units of the Fund .


Classification of Units Attributable to Contract OwnersThe Funds’ outstanding units qualify as “puttable instruments” as required by the IAS 32: Financial Instruments: Presentation (“IAS 32”) . IAS 32 states that units that include a contractual obligation for the issuer to repurchase or redeem them for cash or another financial asset should be classified as financial liabilities . The Funds issue different series of units attributable to Contract Owners that are equally subordinated but have different features .The Funds issue series of units to Contract Owners that include a contractual obligation for the issuer to repurchase or redeem them for cash or another financial asset . These series of units attributable to Contract Owners have different characteristics and are therefore classified as financial liabilities .

Valuation of the UnitsThe units of a Fund are valued according to the administrative rules established by the Company and in accordance with the Contract and all laws and regulations applicable to the Funds .These units differ with respect to redemption charges and management fees charged to each series (See Note 5) . The net asset value per unit is determined on each market day by dividing the net assets attributable to Contract Owners by its outstanding units .

Series of units availableThe Desjardins Financial Security Guaranteed Investment Funds Plan, the Millennia III Plan, and the Imperial Growth Plan, as well as the various Contract versions offered under each of these Plans, offers different Series providing different guarantees and provisions as well as varying Management Expense Ratios (MERs) .Series 1: This Series was offered under the Millennia III Plan through two different Contracts: the Millennia lll and Millennia lll - New Era Contracts . The Millennia III Plan was offered from November 15, 1995 to October 28, 2007 .Series 3: This Series was offered under the Millennia III Plan through two different Contracts: the Millennia lll - Classic and Millennia lll - New Era Contracts . The Millennia III Plan was offered from November 15, 1995 to October 28, 2007 .Series 5: This Series was offered under the Desjardins Financial Security Guaranteed Investment Funds Plan through the Helios Contract . The Desjardins Financial Security Guaranteed Investment Funds Plan was first offered starting on October 29, 2007 and currently, the only Contract available is the Helios2 Contract .Series 6: This Series was offered under the Desjardins Financial Security Guaranteed Investment Funds Plan through the Helios2 Contract . The Desjardins Financial Security Guaranteed Investment Funds Plan was first offered starting on October 29, 2007 and currently, the only Contract available is the Helios2 Contract .Series 7: This Series was offered under the Desjardins Financial Security Guaranteed Investment Funds Plan through the Helios2 Contract . The Desjardins Financial Security Guaranteed Investment Funds Plan was first offered starting on October 29, 2007 and currently, the only Contract available is the Helios2 Contract .Series IGP: This Series was offered under the Imperial Growth Plan through the three remaining Contracts (C71, C81, and C88) . The Imperial Growth Plan was offered pre-1995 .

Number of UnitsThe number of units outstanding in each Fund as at December 2016 and 2015, and the number of units attributed to and withdrawn from Contracts during the years are as follows:

Outstanding Units2016

Attributed Units2015



Withdrawn Units2016

Withdrawn Units2015

INVESTMENT SOLUTIONSConservative

Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183,305 13,397 215,110 16,435 45,202 3,038Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,225,539 1,362,535 1,415,148 972,195 552,144 159,946Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295,034 238,400 369,268 239,440 312,634 4,958

Moderate Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,260 19,486 133,194 22,517 24,420 3,031Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,108,123 2,402,133 2,268,131 1,666,281 562,141 230,959Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756,324 214,703 628,007 152,214 86,386 1

Balanced Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,469 12,714 120,529 12,714 774 —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,542,921 4,848,127 4,235,287 3,393,702 540,493 248,236Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,237,946 1,007,847 344,994 902,201 114,895 33,531

GrowthSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 760,517 16,307 831,433 32,041 87,223 15,734Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,822,595 3,315,070 3,137,859 2,591,622 630,334 187,302Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 734,846 181,018 645,550 133,455 91,722 46,537







Withdrawn Units2016

Withdrawn Units2015

Maximum Growth Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,483 396 26,354 396 2,267 —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,858 343,690 164,889 172,920 87,721 21,372Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,759 3,854 75,905 — — —

INDIVIDUAL FUNDSIncomeMoney Market

Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,891 68,554 8,321 1,415 17,984 20,545Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344,552 488,180 140,201 246,533 283,829 209,065Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,786,782 2,999,289 1,170,328 1,438,897 1,382,835 1,414,488Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,136,504 1,698,198 2,179,282 2,273,533 1,740,976 900,530Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490,651 162,210 672,592 240,940 344,151 246,187Series IGP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148,910 171,344 33,120 42,202 55,554 56,208

Income – Fiera CapitalSeries 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,001 255,586 9,540 4,666 69,125 50,176Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 873,227 1,068,946 55,756 464,491 251,475 181,784Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,829,023 7,764,680 731,495 761,944 1,667,152 1,633,950Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,803,271 1,096,049 937,616 774,203 230,394 159,683Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209,174 54,411 250,007 43,819 95,244 767

Canadian BondSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,828,827 7,626,091 747,537 7,983,886 1,544,801 357,795Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,076,426 505,813 752,213 519,193 181,600 13,380Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,502 30,960 2,663 30,990 121 30

Balanced and Asset AllocationDiversified Income – Franklin Quotential

Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 773,659 877,559 159,528 156,926 263,428 209,611Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,423,908 23,190,596 2,066,494 3,075,265 3,833,182 3,768,989Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,800,954 3,946,703 2,469,131 2,822,916 614,880 369,868Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 697,375 496,674 235,433 474,483 34,732 1,109

Balanced Income – Franklin Quotential Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,286,827 1,478,170 131,261 150,219 322,604 288,983Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,189,042 33,381,738 2,670,090 2,700,920 4,862,786 5,010,885Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,288,524 2,980,915 1,832,387 2,250,076 524,778 162,267Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 864,960 1,016,353 223,700 732,580 375,093 8,310

Canadian Balanced – Fidelity Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,173,069 1,206,178 249,823 280,656 282,932 206,583Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,994,696 91,416,057 9,190,958 9,199,383 14,612,319 14,072,082Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,218,135 4,735,977 2,401,845 4,159,132 919,687 905,271Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301,726 233,707 164,025 160,143 96,006 3,234

U .S . Monthly Income – FidelitySeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534,960 125,627 507,465 125,998 98,132 371Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,012,639 328,093 773,096 328,197 88,550 104Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,603 45,476 127,530 45,476 54,403 —

Balanced – Desjardins SocieTerraSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,371,478 1,388,622 179,534 1,422,454 196,678 33,832Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,373,583 223,620 1,284,302 223,996 134,339 376Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264,048 4,046 268,491 4,046 8,489 —

Global Balanced – Jarislowsky Fraser Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,136,796 1,235,932 162,578 365,049 261,714 195,577Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,370,171 22,251,488 4,661,446 7,115,465 4,542,763 3,206,127Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,145,340 1,552,841 5,183,768 1,558,652 591,269 5,811Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 823,648 116,990 787,610 117,042 80,952 52






Withdrawn Units2016

Withdrawn Units2015

Canadian Balanced – Fiera CapitalSeries 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 719,420 809,324 27,268 32,454 117,172 189,934Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,288,779 1,551,148 52,678 98,613 315,047 413,194Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,639,284 13,842,680 1,100,927 1,217,005 2,304,323 2,362,091Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,282,707 1,400,752 1,064,871 1,135,988 182,916 81,471Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,066 98,956 59,443 50,290 2,333 11,468

Canadian Balanced – Franklin BissettSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 826,113 1,009,984 94,285 78,877 278,156 278,189Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,091,996 23,114,831 1,865,375 1,661,612 3,888,210 6,432,032Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,591,171 4,964,550 2,400,042 2,478,482 773,421 850,191Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 631,723 500,958 192,536 319,487 61,771 69,365

Balanced Growth – Franklin Quotential Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,820,823 2,036,476 166,914 195,374 382,567 340,206Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,243,781 77,569,281 6,365,859 6,788,994 11,691,359 9,853,319Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,896,446 4,262,879 2,330,105 2,977,327 696,538 302,270Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 734,025 523,873 290,166 441,744 80,014 3,935

Canadian Balanced – CI SignatureSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,050,504 13,031,694 1,101,281 2,480,240 2,082,471 2,490,626Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,914,035 4,204,058 1,445,683 3,258,074 735,706 637,546Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425,233 339,186 171,732 241,205 85,685 21,601

Income and Growth – CI SignatureSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,159,138 7,558,081 678,868 1,471,848 2,077,811 2,146,096Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,549,406 4,249,549 2,209,526 3,494,017 909,669 449,612Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,144 193,152 210,253 109,890 53,261 9,979

Growth and Income – NEI Northwest Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321,805 398,030 35,623 30,669 111,848 147,825Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,971,082 22,715,281 3,118,142 1,649,411 3,862,341 3,588,533Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,488,121 2,389,822 1,494,126 1,584,984 395,827 318,030Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252,511 135,977 119,959 64,394 3,425 13,810

Global Growth – NEI SelectSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480,868 554,876 13,697 52,599 87,705 113,830Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,682,507 8,861,708 1,261,749 917,718 1,440,950 1,060,449Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,954,214 1,933,861 1,477,165 1,529,047 456,812 80,514Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339,013 179,684 176,468 153,709 17,139 2,018

Canadian Asset Allocation – CI CambridgeSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 856,329 865,988 117,544 188,483 127,203 142,482Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,190,156 817,140 506,711 689,016 133,695 113,765Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,235 36,731 99,374 32,884 60,870 —

Growth – Franklin Quotential Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395,965 417,589 48,898 31,766 70,522 161,097Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,229,743 9,017,907 313,682 334,399 1,101,846 989,603Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559,251 497,195 154,437 429,558 92,381 43,183Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,258 7,282 — 3,397 24 12

Canadian EquityDividend Income – Franklin Bissett

Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,152,141 3,740,873 146,126 1,658,377 734,858 646,017Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,989,330 13,700,901 521,960 7,330,662 2,233,531 2,796,200Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,438,617 1,227,867 388,611 559,077 177,861 164,659Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,441 93,825 23,287 26,905 10,671 46,070

Canadian Dividend – NEI NorthwestSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,363,941 2,425,115 320,105 576,982 381,279 526,706Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613,456 407,125 314,933 248,403 108,602 45,314Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,389 3,864 16,565 — 40 —







Withdrawn Units2016

Withdrawn Units2015

Canadian Equity – Jarislowsky FraserSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525,503 672,818 18,364 32,225 165,679 223,505Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,010,823 21,300,878 549,242 531,873 2,839,297 4,456,573Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,756 19,043 141,355 19,053 2,642 10Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,347 4,000 2,347 4,000 — —

Canadian Equity – Fidelity True North®

Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,305 123,106 39,133 52,672 31,934 31,538Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,982,460 2,151,295 339,315 302,310 508,150 376,441Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,762,367 1,178,327 791,335 955,009 207,295 249,270Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,347 184,500 27,986 170,777 68,139 982

Canadian Equity – Franklin Bissett Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,140,265 — 3,187,394 — 47,129 —Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,126,841 1,429,085 991,347 59,613 293,591 329,421Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,290,202 1,082,089 448,310 97,929 240,197 383,301Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789,520 506,089 412,874 215,688 129,443 144,175Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,538 7,293 28,944 3,766 3,699 218Series IGP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275,089 — 278,342 — 3,253 —

Specialty Equity – NEI NorthwestSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490,284 570,744 23,573 18,132 104,033 145,769Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,777,315 1,947,641 255,755 248,686 426,081 617,971Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295,281 264,328 112,096 178,018 81,143 47,005Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,054 4,054 — — — —

Small Cap – Franklin BissettSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419,060 487,334 22,187 14,560 90,461 134,683Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504,184 564,968 79,697 57,627 140,481 231,977Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570,922 396,001 257,189 192,590 82,268 127,811Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,921 7,003 76 224 158 18,780

Foreign EquityAmerican Equity – MFS

Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583,110 686,632 61,838 77,396 165,360 144,640Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,495,810 1,536,194 338,882 541,201 379,266 277,207Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 937,829 719,947 380,331 615,674 162,449 77,952Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,598 22,229 11,264 18,347 9,895 —

American Equity Value – DesjardinsSeries 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337,351 370,492 10,662 85,832 43,803 31,957Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358,641 401,147 61,263 111,163 103,769 96,288Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,255,338 1,350,585 318,215 494,744 413,462 208,211Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 865,487 681,502 339,233 588,079 155,248 100,407Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,937 80,739 15,020 57,405 56,822 5,501

Global Dividend – DesjardinsSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,103,658 1,104,542 235,868 494,512 236,752 236,032Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,721,134 973,851 1,016,603 711,253 269,320 68,327Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,153 68,742 141,505 65,525 64,094 3,565

Global Equity – MFS Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 644,982 694,899 97,508 673,482 147,425 21,658Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,013,684 12,426,283 391,526 7,429,907 1,804,125 767,442Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328,119 248,381 115,312 240,538 35,574 15,004Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,778 3,940 25,877 — 39 —

International Equity – MFSSeries 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267,901 349,063 8,598 28,607 89,760 40,827Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657,646 777,249 43,163 55,309 162,766 211,784Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540,118 583,714 77,419 149,430 121,015 159,408Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,698 155,017 51,419 171,781 52,738 19,696Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,573 25,532 10,051 10,175 10 —






Withdrawn Units2016

Withdrawn Units2015

International Equity Growth – DesjardinsSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,373 195,236 25,466 36,954 45,329 21,285 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221,349 169,152 107,853 68,620 55,656 16,649 Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,150 4,150 — — — —

5. MANAGEMENT FEES AND OTHER EXPENSES

Management feesIIn return for investment management, Desjardins Financial Security is paid a management fee from the Funds based on the net asset value of the units attributed to each series of each Fund and calculated daily .The management fees, as a percentage of the daily average net assets, are as follows:

Series 1%

Series 3%

Series 5%

Series 6%

Series 7%

Series IGP%

INVESTMENT SOLUTIONSConservative — — 2 .05 1 .95 1 .50 —Moderate — — 2 .05 2 .00 1 .55 —Balanced — — 2 .10 2 .00 1 .55 —Growth — — 2 .15 2 .05 1 .60 —Maximum Growth — — 2 .15 2 .05 1 .60 —

INDIVIDUAL FUNDS IncomeMoney Market 0 .75 0 .75 0 .75 0 .80 0 .35 1 .30Income – Fiera Capital 1 .50 1 .38 1 .09 1 .35 0 .90 —Canadian Bond — — 1 .09 1 .35 0 .90 —Balanced and Asset AllocationDiversified Income – Franklin Quotential — 1 .90 1 .96 2 .20 1 .75 —Balanced Income – Franklin Quotential — 1 .90 1 .96 2 .15 1 .70 —Canadian Balanced – Fidelity — 2 .02 2 .02 2 .20 1 .75 —U .S . Monthly Income – Fidelity — — 2 .40 2 .30 1 .85 —Balanced – Desjardins SocieTerra — — 1 .88 2 .15 1 .70 —Global Balanced – Jarislowsky Fraser — 2 .10 1 .69 2 .10 1 .65 —Canadian Balanced – Fiera Capital 2 .00 1 .65 1 .68 2 .00 1 .55 —Canadian Balanced – Franklin Bissett — 1 .95 1 .75 2 .00 1 .55 —Balanced Growth – Franklin Quotential — 1 .90 1 .96 2 .15 1 .70 —Canadian Balanced – CI Signature — — 1 .89 2 .15 1 .70 —Income and Growth – CI Signature — — 2 .20 2 .20 1 .75 —Growth and Income – NEI Northwest — 2 .22 2 .03 2 .20 1 .75 —Global Growth – NEI Select — 2 .33 2 .10 2 .30 1 .85 —Canadian Asset Allocation – CI Cambridge — — 2 .20 2 .05 1 .60 —Growth – Franklin Quotential — 2 .15 2 .21 2 .20 1 .75 —Canadian EquityDividend Income – Franklin Bissett — 2 .06 1 .75 2 .15 1 .70 —Canadian Dividend – NEI Northwest — — 2 .20 2 .15 1 .70 —Canadian Equity – Jarislowsky Fraser — 2 .15 1 .69 2 .10 1 .65 —Canadian Equity – Fidelity True North® — 2 .02 2 .02 2 .25 1 .80 —Canadian Equity – Franklin Bissett 2 .75 2 .18 1 .75 2 .10 1 .65 1 .95Specialty Equity – NEI Northwest — 2 .35 2 .16 2 .40 1 .95 —Small Cap – Franklin Bissett — 2 .25 2 .01 2 .40 1 .95 —Foreign Equity



Series 1%

Series 3%

Series 5%

Series 6%

Series 7%

Series IGP%

American Equity – MFS — 2 .25 1 .71 2 .15 1 .70 —American Equity Value – Desjardins 2 .00 1 .69 2 .06 2 .10 1 .65 —Global Dividend – Desjardins — — 2 .20 2 .20 1 .75 —Global Equity – MFS — 1 .78 1 .78 2 .25 1 .80 —International Equity – MFS 2 .00 1 .95 1 .69 2 .25 1 .80 —International Equity Growth – Desjardins — — 2 .20 2 .20 1 .75 —

Operating expensesIn addition to management fees, a charge is applied to each Fund for operating and administrative expenses relating to the Fund . Each Fund is also responsible for all applicable taxes, including Goods and Services Tax (“GST”) and Harmonized Sales Tax (“HST”) if any, and all brokerage commissions incurred by a Fund in buying and selling investments on behalf of a Fund .

Management Expense RatiosSome expenses (audit fees, legal fees, custodial fees, marketing costs, etc) have been absorbed by the Company . Management expense ratios for all the Funds would be five basis points higher if these expenses had been charged to the Funds . The Company does not intend to change its method of allocating costs .The management expense ratios for each of the past five years, which includes management, guarantee and operating expenses, are as follows*:

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Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.59 2 .59** — — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.47 2 .49 2 .51** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.88 2 .01 2 .01** — —

ModerateSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.70 2 .64** — — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.49 2 .51 2 .54** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.90 1 .90 2 .07** — —

BalancedSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.76 2 .70** — — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.54 2 .57 2 .57** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.08 2 .13 2 .13** — —

GrowthSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.82 2 .76** — — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.59 2 .68 2 .68** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10 2 .18 2 .18** — —

Maximum GrowthSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.87 2 .81** — — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.67 2 .71 2 .71** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.24 2 .24 2 .24** — —

INDIVIDUAL FUNDS IncomeMoney Market***

Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.72 1 .72 1 .72 1 .72 1 .55Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.71 1 .72 1 .73 1 .72 1 .55Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.38 1 .39 1 .39 1 .40 1 .25Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.12 1 .10 1 .11** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.61 0 .63 0 .63** — —Series IGP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.66 1 .66 1 .67** — —


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Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.93 2 .93 2 .94 2 .93 2 .65Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.61 2 .61 2 .62 2 .61 2 .33Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.96 1 .96 1 .96 1 .95 1 .75Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.77 1 .79 1 .80** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.22 1 .31 1 .32** — —

Canadian BondSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.96 1 .96** — — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.77 1 .75** — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.22 1 .32** — — —

Balanced and Asset AllocationDiversified Income – Franklin Quotential

Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.14 3 .13 3 .14 3 .15 2 .80Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.91 2 .92 2 .92 2 .92 2 .60Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.71 2 .68 2 .72** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.20 2 .27 2 .30** — —

Balanced Income – Franklin QuotentialSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 3 .20 3 .20 3 .20 2 .85Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.95 2 .95 2 .95 2 .94 2 .60Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.76 2 .75 2 .74** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.30 2 .30 2 .30** — —

Canadian Balanced – FidelitySeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.39 3 .41 3 .41 3 .40 3 .00Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.96 2 .96 2 .96 2 .96 2 .65Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.81 2 .82 2 .83** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.28 2 .34 2 .36** — —

U .S . Monthly Income – FidelitySeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10 3 .04** — — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.99 2 .93** — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.47 2 .42** — — —

Balanced – Desjardins SocieTerraSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.81 2 .81** — — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.76 2 .74** — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.30 2 .30** — — —

Global Balanced – Jarislowsky FraserSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.39 3 .40 3 .40 3 .40 3 .00Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.85 2 .85 2 .86 2 .86 2 .55Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.63 2 .59** — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.24 2 .24** — — —

Canadian Balanced – Fiera Capital***Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.83 3 .83 3 .82 3 .82 3 .40Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19 3 .20 3 .19 3 .19 2 .85Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.55 2 .55 2 .55 2 .55 2 .30Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.57 2 .59 2 .60** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.08 2 .12 2 .13** — —

Canadian Balanced – Franklin BissettSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18 3 .17 3 .19 3 .18 2 .85Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.77 2 .77 2 .77 2 .77 2 .50Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.60 2 .59 2 .61** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.11 2 .10 2 .00** — —

Balanced Growth – Franklin QuotentialSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.26 3 .27 3 .27 3 .29 2 .95Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.97 2 .97 2 .97 2 .97 2 .65Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.80 2 .79 2 .80** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.34 2 .36 2 .36** — —



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December 31 2012

%Canadian Balanced – CI Signature

Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.99 2 .99 2 .99 2 .99 2 .68Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.79 2 .78 2 .77** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.29 2 .34 2 .36** — —

Income and Growth – CI SignatureSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 3 .05 3 .07 3 .07 2 .75**Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.90 2 .85 2 .84** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.36 2 .32 2 .47** — —

Growth and Income – NEI NorthwestSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.64 3 .64 3 .64 3 .64 3 .22Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.94 2 .94 2 .94 2 .94 2 .65Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.85 2 .87 2 .86** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.30 2 .41 2 .41** — —

Global Growth – NEI SelectSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.85 3 .85 3 .85 3 .86 3 .43Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13 3 .12 3 .12 3 .12 2 .80Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.98 2 .98 3 .02** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.40 2 .59 2 .59** — —

Canadian Asset Allocation – CI CambridgeSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.90 2 .89 2 .91 2 .95 2 .65**Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.70 2 .68 2 .69** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.19 2 .30 2 .30** — —

Growth – Franklin QuotentialSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.61 3 .61 3 .62 3 .61 3 .20Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.22 3 .22 3 .21 3 .21 2 .85Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.89 2 .92 2 .93** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.45 2 .47 2 .47** — —

Canadian EquityDividend Income – Franklin Bissett

Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.40 3 .39 3 .39 3 .39 3 .05Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.93 2 .93 2 .94 2 .94 2 .65Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.70 2 .70 2 .72** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.17 2 .13 2 .10** — —

Canadian Dividend – NEI NorthwestSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08 3 .08 3 .08 3 .09 2 .70**Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.87 2 .85 2 .90** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.41 2 .41 2 .41** — —

Canadian Equity – Jarislowsky FraserSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.59 3 .58 3 .59 3 .59 3 .20 Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.92 2 .91 2 .92 2 .91 2 .60 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.93 2 .87** — — — Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.41 2 .36** — — —

Canadian Equity – Fidelity True North®

Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.56 3 .59 3 .62 3 .62 3 .20 Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 3 .20 3 .21 3 .20 2 .85 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04 3 .05 3 .04** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.46 2 .58 2 .59** — —

Canadian Equity – Franklin BissettSeries 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.98** — — — —Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.59 3 .59 3 .59 3 .59 3 .20 Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.97 2 .97 2 .98 2 .98 2 .70 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.80 2 .79 2 .83** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.41 2 .41 2 .41** — —Series IGP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.38** — — — —


December 31 2016

%

December 31 2015

%

December 31 2014

%

December 31 2013

%

December 31 2012

%Specialty Equity – NEI Northwest

Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.82 3 .83 3 .83 3 .83 3 .40 Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.28 3 .27 3 .28 3 .29 2 .90 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.21 3 .21 3 .24** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.76 2 .76 2 .76** — —

Small Cap – Franklin BissettSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.76 3 .74 3 .75 3 .75 3 .37 Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.14 3 .13 3 .13 3 .13 2 .85 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.14 3 .12 3 .15** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.74 2 .56 2 .76** — —

Foreign EquityAmerican Equity – MFS***

Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.75 3 .76 3 .77 3 .76 3 .34 Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.93 2 .93 2 .94 2 .97 2 .65 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.87 2 .88 2 .87** — — Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.44 2 .47 2 .47** — —

American Equity Value – DesjardinsSeries 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.82 3 .81 3 .82 3 .82 3 .41 Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.22 3 .23 3 .24 3 .24 2 .90 Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 3 .06 3 .07 3 .08 2 .75 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.83 2 .79 2 .76** — — Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.27 2 .25 2 .41** — —

Global Dividend – DesjardinsSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.80 2 .79 2 .78 2 .90 2 .55** Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.87 2 .83 2 .86** — — Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.34 2 .47 2 .47** — —

Global Equity – MFS***Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.36 3 .39 3 .39 3 .47 3 .05 Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.92 2 .92 2 .92 2 .92 2 .60 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.93 2 .95 3 .00** — — Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.53 2 .53 2 .53** — —

International Equity – MFS***Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.82 3 .83 3 .85 3 .85 3 .50 Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.65 3 .64 3 .65 3 .65 3 .25 Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.75 2 .76 2 .76 2 .77 2 .45 Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01 3 .05 3 .03** — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.55 2 .59 2 .59** — —

International Equity Growth – DesjardinsSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10 3 .11 3 .10 3 .22 2 .80** Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.93 2 .92 2 .94** — — Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.53 2 .53 2 .53** — —

* Starting in 2013, management expense ratios include all applicable sales taxes (sales taxes not included before 2013) .** Annualized .

*** The management expense ratios for these Funds include underlying fund managers’ fees, ranging from 0 .01 to 0 .05% .



6. RELATED PARTY TRANSACTIONSThe Funds pay management fees and operating expenses to the Company, which are presented in the Statement of Comprehensive Income . Those fees are calculated on a daily basis with the net asset value of the Fund . The management fees are paid monthly at the annual rate specified in Note 5 . Accrued expenses, presented in the statement of Financial Position, are to be paid to the Company .Some Funds have investments in underlying funds from related parties .As at December 31, 2016 and 2015, the Company had the following seed capital investments:

December 31, 2016$

December 31, 2015$

Conservative 143,646 141,919Moderate 173,479 169,802Balanced 204,025 197,511Growth 237,492 227,584Maximum Growth 270,102 255,521Money Market 83,075 82,464Income – Fiera Capital 22,000 21,886Canadian Bond 21,589 21,451Diversified Income – Franklin Quotential 22,170 21,797Balanced Income – Franklin Quotential 22,656 22,256Canadian Balanced – Fidelity 23,496 22,336U .S . Monthly Income – Fidelity 466,822 443,758Balanced – Desjardins SocieTerra 142,727 139,525Global Balanced – Jarislowsky Fraser 79,581 77,425Canadian Balanced – Fiera Capital 23,668 22,113Canadian Balanced – Franklin Bissett 128,864 116,535Balanced Growth – Franklin Quotential 22,914 22,440Canadian Balanced – CI Signature 230,310 219,294Income and Growth – CI Signature 218,302 203,815Growth and Income – NEI Northwest 65,489 60,970Global Growth – NEI Select 24,083 22,518Canadian Asset Allocation – CI Cambridge 240,824 226,885Growth – Franklin Quotential 23,224 22,777Dividend Income – Franklin Bissett 43,674 36,927Canadian Dividend – NEI Northwest 269,361 231,804Canadian Equity – Jarislowsky Fraser 23,874 20,657Canadian Equity – Fidelity True North® 145,294 133,480Canadian Equity – Franklin Bissett 67,325 18,612Specialty Equity – NEI Northwest 287,713 245,362Small Cap – Franklin Bissett 20,220 15,725American Equity – MFS 28,065 27,133American Equity Value – Desjardins 879,208 819,806Global Dividend – Desjardins 274,376 268,529Global Equity – MFS 245,840 247,098International Equity – MFS 23,218 24,386International Equity Growth – Desjardins 251,082 265,511

The related parties transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of


consideration established and agreed to by the related parties .

7. FINANCIAL INSTRUMENTS DISCLOSURES

DFS Preliminary InformationThe net assets of the DFS Guaranteed Investment Funds are held by the Company on behalf of all Contract Owners . These Funds are not separate legal entities . The Contract Owners do not own any of the assets of the Funds nor own an interest in the Funds . However, the financial instrument risks resulting from the Funds are assumed by the Contract Owners . The value of the segregated fund’s value may increase or decrease according to market fluctuations .Moreover, the Funds are offered with a deposit guarantee of 75 to 100% that protects the deposits until specific maturity dates .For the Fund of funds, details regarding the top holdings of the underlying fund(s) are shown in the appendix of the schedule of investment portfolio .

Hierarchy of Financial Instruments at Fair ValueThe fair value measurement of financial instruments is determined using the following three levels of the fair value hierarchy:• Level 1 – Measurement based on quoted prices (unadjusted) in active markets for identical assets or liabilities;• Level 2 – Valuation techniques based primarily on observable market data;• Level 3 – Valuation techniques not based primarily on observable market data .If inputs of different levels are used to measure the fair value of an asset or liability, the classification within the hierarchy is based on the lowest level input that is significant to the measurement of fair value .

Measurement MonitoringThe Company is responsible for establishing the fair value measurements included in the Funds’ financial statements, including Level 3 measurements . The Company obtains prices from a pricing agency, monitors and analyzes these prices on a daily basis . A Measurement Monitoring Committee established by the Company ensures that appropriate operating procedures and a proper monitoring structure are in place and followed . Monthly monitoring reports are prepared and sent to each member for approval . The Measurement Monitoring Committee verifies the measurements on a monthly basis . On a quarterly basis, this committee examines and approves the Level 3 measurements after obtaining confirmation of the measurements from each portfolio manager, as needed . The committee signs off on any adjustments made to prices or estimates provided by the pricing agency .

Classification within the Fair Value HierarchyA change in the fair value measurement method could result in a transfer between levels . The Funds’ policy is to record the implications of transfers between levels on the date of the event or change in circumstances behind the transfer .The following types of investments may be classified Level 3 if their prices are no longer based on observable inputs .

a) Money Market SecuritiesMoney market securities primarily include public sector and corporate securities, which are valued using models with inputs including interest rate curves, credit spreads and volatilities . The inputs that are significant to valuation are generally observable . Public sector money market securities guaranteed by the federal and provincial government have been classified as Level 1 . Other money market securities have been classified as Level 2 .

b) EquitiesEquities are classified as Level 1 when the security is actively traded and a reliable price is observable . Certain equities do not trade frequently and therefore observable prices may not be available . In such cases, fair value is determined using observable market data and the fair value is classified as Level 2, unless the determination of fair value requires significant unobservable data, in which case the measurement is classified as Level 3 . Unlisted warrants are generally classified as Level 2 .

c) Index-Based InvestmentsIndex-based Investments are classified as Level 1 when the security is actively traded and a reliable price is observable .

d) BondsPublic sector bonds guaranteed by the federal and provincial government are classified as Level 1 . Corporate bonds, which are valued using models with inputs including interest rate curves, credit spreads and volatilities are usually classified as Level 2 .

e) Mortgage-backed Securities and Asset-backed SecuritiesMortgage-backed securities and asset-backed securities consist primarily of corporate securities . Since the inputs that are significant to valuation are generally observable, mortgage-backed securities and asset-backed securities are usually classified as Level 2 .

f) Investment FundsPublic investment funds are classified as Level 1 when their prospectus is unrestricted and their price is reliable and observable . Since some investment funds are not public, their price is determined using observable market data and fair value is classified as Level 2, unless the measurement of fair value requires the use of significant unobservable inputs, in which case it is classified as Level 3 .



g) Derivative Financial InstrumentsDerivative financial instruments consist of foreign currency forward contracts for which counterparty credit spreads are observable and reliable or for which the credit-related inputs are determined to be significant to fair value, are classified as Level 2 .Detailed information concerning the fair value hierarchy of each Fund is available in their respective Notes to the Financial Statements pertaining to each Fund . For securities classified as Level 3, the valuation techniques and assumptions are also presented in their respective notes .

Management of Risks Arising from Financial InstrumentsDuring the course of their activities, the Funds are exposed to a variety of risks associated with financial instruments such as market risk (including currency risk, interest rate risk and price risk), concentration risk, credit risk and liquidity risk . The overall strategy of the Funds’ risk management focuses on the unpredictability of financial markets and optimizes the Funds’ financial performance, in accordance with the risk level established for the Fund . Most investments involve a risk of loss .For the purpose of the financial statements, certain risks detailed in the Contract and Information Folder are associated with other risks . The market risk, the special equity risk and the sovereign risk are presented under price risk . The credit risk and the derivative risk are presented under credit risk .In accordance with the Funds’ investment policy, the Company monitors the Funds’ risks on a quarterly basis .

Market RiskMarket risk is the risk that the fair value or future cash flows associated with a financial instrument will fluctuate because of a change in the relevant risk variables, such as interest rates and equity prices .The Funds’ market risk is managed through diversification of the investment portfolio’s exposure ratios . The return on investments held by the Funds is monitored by the Company on a monthly basis and reviewed by the investment committee on a quarterly basis .Currency RiskCurrency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in foreign exchange rates . Currency risk is composed of monetary items (usually including cash, receivable amounts in foreign currencies, and investments in fixed-income and money market securities) and non-monetary items (usually including investments in equities and investment funds) . The non-monetary assets are classified according to the currency in which the security was purchased .The Funds are exposed to the currency risk in holding assets and/or liabilities denominated in currencies other than the Canadian dollar, the Funds’ functional currency, as the value of the securities denominated in other currencies will fluctuate according to the prevailing exchange rates . The Funds may enter into foreign currency forward contracts to reduce their exposure to currency risk .The Funds’ exposure to currency risk is shown based on the carrying value of financial assets and financial liabilities (including the notional amount of foreign currency forward contracts and foreign currency futures, if any) .If the Canadian dollar decreases in relation to foreign currencies, the value of foreign investments increases . Conversely, if the value of the Canadian dollar increases, the value of foreign investments decreases .Interest Rate RiskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates .Interest rate risk occurs when an investment fund invests in interest-bearing financial instruments . Generally, the value of these securities increases if interest rates decrease, and decreases if interest rates increase . The Company manages this risk by calculating and monitoring the average effective duration of the portfolio of these securities and the exposures on different points along the interest rate yield curve . The Funds also hold a limited amount of cash subject to variable interest rates, which expose them to cash flow interest rate risk .Price RiskPrice risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market prices, other than those arising from currency risk or interest rate risk .The Company manages this risk by carefully selecting securities and other financial instruments, in accordance with defined limits . The maximum risk resulting from financial instruments is determined by the fair value or contract value of the financial instruments . The Funds’ overall market positions are monitored on a monthly basis by the Company and reviewed on a quarterly basis by the investment committee . The Funds’ financial instruments are exposed to price risk arising from uncertainties about the future prices of instruments .

Concentration RiskConcentration risk arises as a result of the concentration of exposures within the same category, whether it is geographical location or industry sector . For Funds with an international investment strategy, the concentration by geographic location is presented according to, among other things, the country of incorporation or region . For Funds with a domestic investment strategy, the concentration by industry sector is presented according to, among other things, their investments in the financial, healthcare or energy sectors, etc . The concentration risk is managed through portfolio diversification within the framework of the Funds’ objective and strategy .

Credit RiskCredit risk is the risk that the financial instrument counterparty will be unable to pay the full amount at maturity . The Funds’ credit risk is managed through an independent credit analysis from the Manager/sub-advisor, in addition to credit rating agencies analysis .


Financial Instrument TransactionsThe Funds are exposed to credit risk . The Funds’ and counterparty’s respective credit risks are taken into account when determining the fair value of financial assets and liabilities . Transactions are settled or paid on delivery using approved brokers . The risk of default is considered limited as delivery of the securities sold is made once the broker has received payment .Payment is made on a purchase once the securities have been received by the broker . The trade will fail if either party fails to meet its obligations . However, there are risks involved in dealing with custodians or prime brokers who settle trades and, in rare circumstances, the securities and other assets deposited with the custodian or broker may be exposed to credit risk with regard to such parties . In addition, there may be practical problems or time delays associated with enforcing the Funds’ rights to their assets in the case of an insolvency of any such party .The investment grade for fixed-income securities and money market securities is rated by credit rating agencies, such as the Dominion Bond Rating Service (“DBRS”), Standard & Poor’s and Moody’s . In cases where the credit rating agencies do not agree on a credit rating for fixed-income securities and money market securities, they will be classified following these rules:• If two credit ratings are available, but the ratings are different, the lowest rating is used;• If three credit ratings are available, the most common credit rating is used;• If all three credit rating agencies have different ratings, the middle credit rating is used .The credit rating is then converted to DBRS format . Generally, the greater the credit rating of a security, the lower the probability of it defaulting on its obligations .Derivative financial instruments are financial contracts whose value depends on underlying assets, including interest rates and foreign exchange rates . The vast majority of derivative financial instruments is negotiated by mutual agreement between the Funds and their counterparties, and include foreign currency forward contracts, swaps and options . Other transactions are carried out as part of trades and mainly consist of futures contracts .

Securities Lending and Repurchase TransactionsSecurities lending and repurchase transactions expose the Funds to credit risk . These transactions are governed by Investment Industry Regulatory Organization of Canada participation agreements . The Funds also use netting agreements with counterparties to mitigate credit risk and require a percentage of collateralization (a pledge) on these transactions . The Funds only accept pledges from counterparties that comply with the eligibility criteria defined in their policies . These criteria promote quick realization, if necessary, of collateral in case of default . The collateral received and given by the Funds are mainly cash and government securities . Further information on assets pledged and received as collateral is presented in the “Notes to the Financial Statements – Specific Information” pertaining to each Fund .

Liquidity RiskLiquidity risk is the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities .The Funds are exposed to daily cash redemptions of units . Most of their assets are therefore invested in liquid investments (i .e . investments that are traded in an active market and that can be readily disposed of) .Some Funds may invest in derivative financial instruments, debt securities and unlisted equity investments that are not traded in an active market . As a result, some Funds may not be able to quickly liquidate their investments at amounts approximating their fair values, or be able to respond to specific effects such as deterioration in the creditworthiness of any particular issuer . Units attributable to Contract Owners are redeemable on demand at the owner’s option . However, the Company does not expect that the contractual maturity disclosed will be representative of the actual cash outflows, as Contract Owners of the instruments typically retain them for a longer period .The majority of the remaining liabilities are due within the next 3 months . Balances due within 12 months equal their carrying balances as the impact of discounting is not significant .

Management of Risks from Units Attributable to Contract OwnersUnits attributed and outstanding are considered as the Funds’ capital . The Funds are not subject to specific capital requirements on the premiums and withdrawals, other than certain minimum subscription requirements . Contract Owners are entitled to require payment of the net asset value per unit for all or any of the units they hold by giving an official notice to the Company within the prescribed time period . Units attributable to Contract Owners are redeemable for cash equal to a pro rata share of the Funds’ net asset value .

Additional InformationFor further information regarding the hierarchy of financial instruments at fair value measurement and risk exposure of each Fund, please refer to the “Notes to the Financial Statements – Specific Information” pertaining to each Fund . Details on risks and various documents on underlying funds (detailed description of each Fund’s investment policy and, where applicable, the investment policy and/or prospectus and financial statements of the underlying fund(s)) are available upon request by writing to the Company at its address:1 Complexe Desjardins P .O . Box 9000 Montreal, Quebec H5B 1H5


INDEPENDENT AUDITOR’S REPORT

To the Contract Owners of:DFS GIF – ConservativeDFS GIF – ModerateDFS GIF – BalancedDFS GIF – GrowthDFS GIF – Maximum GrowthDFS GIF – Money MarketDFS GIF – Income – Fiera CapitalDSF GIF – Canadian BondDFS GIF – Diversified Income – Franklin QuotentialDFS GIF – Balanced Income – Franklin QuotentialDFS GIF – Canadian Balanced – FidelityDSF GIF – U .S . Monthly Income – FidelityDSF GIF – Balanced – Desjardins SocieTerraDFS GIF – Global Balanced – Jarislowsky FraserDFS GIF – Canadian Balanced – Fiera CapitalDFS GIF – Canadian Balanced – Franklin BissettDFS GIF – Balanced Growth – Franklin QuotentialDFS GIF – Canadian Balanced – CI Signature

DFS GIF – Income and Growth – CI SignatureDFS GIF – Growth and Income – NEI NorthwestDFS GIF – Global Growth – NEI SelectDFS GIF – Canadian Asset Allocation – CI CambridgeDFS GIF – Growth – Franklin QuotentialDFS GIF – Dividend Income – Franklin BissettDFS GIF – Canadian Dividend – NEI NorthwestDFS GIF – Canadian Equity – Jarislowsky FraserDFS GIF – Canadian Equity – Fidelity True North®

DFS GIF – Canadian Equity – Franklin BissettDFS GIF – Specialty Equity – NEI NorthwestDFS GIF – Small Cap – Franklin BissettDFS GIF – American Equity – MFSDFS GIF – American Equity Value – DesjardinsDFS GIF – Global Dividend – DesjardinsDFS GIF – Global Equity – MFSDFS GIF – International Equity – MFSDFS GIF – International Equity Growth – Desjardins

(collectively the “Funds”)

We have audited the accompanying financial statements of each of the Funds, which comprise the statement of financial position of the Funds as at December 31, 2016 and December 31, 2015 and the statements of comprehensive income, changes in net assets attributable to contract owners and cash flows for years or periods then ended, as indicated in the statements of comprehensive income of each of the Funds, and the related notes, which comprise a summary of significant accounting policies and other explanatory information .

THE COMPANY’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTSThe Company is responsible for the preparation and fair presentation of the financial statements of each of the Funds in accordance with International Financial Reporting Standards, 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 .

AUDITOR’S RESPONSIBILITYOur responsibility is to express an opinion on the financial statements of each of the Funds 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 auditor’s 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 auditor considers 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 the Company, as well as evaluating the overall presentation of the financial statements .

We believe that the audit evidence we have obtained in each of our audits is sufficient and appropriate to provide a basis for our audit opinion .

OPINIONIn our opinion, the financial statements of each of the Funds present fairly, in all material respects, the financial position of each of the Funds as at December 31, 2016 and December 31, 2015 and the financial performance and cash flows of each of the Funds for the years or periods then ended, as indicated in the statements of comprehensive income of each of the Funds in accordance with International Financial Reporting Standards . 1

Montreal, Quebec 1 CPA auditor, CA, public accountancy permit No . A123633 April 13, 2017

PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l. 1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1 T: +1 514 205 5000, F: +1 514 876 1502, www.pwc.com/ca

“PwC” refers to PricewaterhouseCoopers LLP/s .r .l ./s .e .n .c .r .l ., an Ontario limited liability partnership .


MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING IN THE AUDITED ANNUAL FINANCIAL STATEMENTS

ManagementThe accompanying financial statements have been prepared by the management of the Funds’ trustee, Desjardins Financial Security Life Assurance Company (“Desjardins Financial Security”), in accordance with International Financial Reporting Standards . Management is responsible for the information contained in the financial statements .

Desjardins Financial Security maintains an appropriate system of internal control to ensure that relevant and reliable financial information is produced and that the Funds’ assets are appropriately accounted for and safeguarded . A summary of the significant accounting policies applicable to the Funds can be found in Note 2 of the Notes to the Financial Statements .

External AuditorPricewaterhouseCoopers LLP have been appointed by the shareholder, Desjardins Financial Corporation Inc ., as the external auditor of the Funds . Their responsibility is to audit the annual financial statements in accordance with Canadian generally accepted auditing standards and to report to the contract owners of the fairness of the Funds’ financial position and results of operations as reflected in the annual financial statements .

Gregory Chrispin François Drouin Éric LandryPresident and Chief Operating Officer Senior Vice-President, Finance Vice-President, Investment Solutions

Lévis, Québec April 13, 2017


0734

5E (2

017-

05)Desjardins Insurance refers to Desjardins Financial Security

Life Assurance Company.

The Contract and Information Folder contains important information on the DFS Guaranteed Investment Funds. Please read it carefully before investing. DFS Guaranteed Investment Funds is a registered trademark owned by Desjardins Financial Security Life Assurance Company. DFS Guaranteed Investment Funds are established by Desjardins Financial Security Life Assurance Company.

DFS stands for Desjardins Financial Security.

desjardinslifeinsurance.comThis Document is also available on our website:

Thank you.Thank you for choosing the strength and stability of a company specialized in providing individual insurance and retirement savings products to over five million Canadians, every day, to ensure their financial security.

Thank you for also choosing Desjardins Group, the largest cooperative financial group in Canada, whose financial stability is recognized by the following credit ratings which are comparable, if not superior to those of the five largest Canadian banks and insurance companies:

• Standard and Poor’s A+• Moody’s Aa2• Dominion Bond Rating Service AA• Fitch AA-

http://www.desjardinslifeinsurance.com

financial information as of december 31, 2016 · 2017. 7. 11. · desjardins insurance refers to...

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