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RISING RATE PROTECTIONWith rising interest rates on the horizon, clients need a plan to protect portfolios. Renaissance has partnered with the experts at Ares Management to bring demonstrated, institutional fl oating-rate loan management to individual Canadian investors.

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Tax and Estate 3New Testamentary Trust Rules May Affect Vulnerable Canadians

Economic Outlook 4Fed Counts Down While Canada Lifts Off

Back of the Napkin 6Asset Gathering Secrets of Elite Advisors, Part 2

Real Needs Demand 8Real Outcomes

Solution Highlight 12The Global Bond Advantage

Thanks to Our Supporters 13Be Interested in Clients’ Lives

Canadian Comfort Food 14

Brain Calisthenics 17

In this issue

6

14

4

PAGE

Letter from the Renaissance Sales Team

When a client stops by your office, they’re often looking for guidance for their portfolios. Your clients have real investment needs, and they’reseeking your expertise to help meet them. For some, it might be protection on the downside when the stock market starts to turn. Others couldbe looking for a source of regular income for retirement, or an investment that will grow over time – let’s say they need that money to buy anew house.

Renaissance Optimal Income Portfolio has delivered real outcomes to clients for the past seven years, through two major market downturnsand an extended low-rate period. You can read more in this edition about how our advisor partners are using this all-in-one solution to meetreal client needs.

We would also like to extend a thank you to all who attended the Renaissance Investments Roadshow when it came to your town this fall. Once again, we appreciate your continued support in making this event one of the top-rated advisor roadshows in Canada.

Our experts who appeared at the roadshow continue to offer their insights in The Renaissance Advisor. In this issue, Jamie Golombek weighs in on how your clients may be impacted by new rules surrounding testamentary trusts, which he sees as being unfair to vulnerable Canadians.

In his economic update, Benjamin Tal gives his insights on the Canadian growth story as well as offering suggestions as to what the U.S. Federal Reserve will do next.

You can also learn how to leverage intimate client events in the second installment of Grant Shorten’s series on Asset Gathering Secrets of Elite Advisors.

At Renaissance, we continue to strive to be your most trusted business advisor. As always, we welcome your feedback.

The Renaissance Sales Team

Meeting Real Client Needs

3

www.renaissanceinvestments.ca/en/jamie_golombek/

In 2013, I wrote about government proposals to eliminate the graduated taxrate system for testamentary trusts and estates. The proposed measures will effectively eliminate a common estate planning technique used by someCanadians to reduce tax on the investment income earned from their assetsafter their death.

In August, the government followed up on the proposals originally announcedin the 2014 federal budget, and released draft legislation to come into playstarting in 2016. Under the proposed rules, flat top-rate taxation at 29 percentfederally will apply to testamentary trusts – trusts arising as a consequence ofdeath – and to estates. There are two notable exceptions to the proposed rules.

First, estates are only subject to flat top-rate taxation “after a reasonable period of administration” of 36 months. Consequently, graduated rate taxationwill still be available in the first three years of an estate.

A second exception applies to a “qualified disability trust,” whose beneficiariesare eligible for the federal disability tax credit (DTC), due to a severe and prolonged impairment to physical or mental functions. Graduated rate taxationwill continue to be available for these trusts.

Despite these exceptions, the proposed rules have been criticized for being unfair in a number of respects.

For example, suppose a testamentary trust has DTC-eligible beneficiaries.Draft legislation to implement the proposed rules will require that the trust be created under a will to benefit from graduated rates. When funds are left in trust for a DTC-eligible individual via a designation on an insurance policy,RRSP, RRIF or TFSA, the trust would be subject to taxation at the top tax rate, rather than at graduated rates. We have drafted a submission to the Department of Finance and hope to have this issue favourably resolved in an upcoming redraft of the legislation.

Secondly, for individuals who have a disability but do not qualify for the DTC,no relief will be available and flat top-rate taxation would apply. It has beenestimated that over 3.8 million Canadians1 have a mental or physical impairment,yet less than 800,000 DTC certificates are estimated to be outstanding.2

Finally, in cases where a testamentary trust does not have DTC-eligible beneficiaries, the proposed rules may put the trustee in a difficult position. For example, with many trusts, the primary purpose is to allow the trustee tocontinue to control and manage the deceased’s assets and protect them forthe beneficiaries. If flat top-rate taxation applies, the trustee would have tochoose between paying more taxes in the trust or paying out the income tobeneficiaries, who may be in lower tax brackets but not capable of handlingthe funds. In addition, having income payable to them may render them ineligible from receiving various provincial income-tested disability benefits,which have less-stringent criteria for qualification than the DTC.

1 Statistics Canada’s initial findings from the Canadian Survey on Disability reported that an estimated 3.8 million Canadians were limited in their daily activities due to a disability in 2012. The survey population was comprised of Canadians aged 15 or older as of May 10, 2011, who were living in private dwellings.

2 According to CRA 2013 Preliminary Income Statistics for the 2011 taxation year, the disabilityamount, which is only available when a DTC has been issued, was claimed either for the taxpayer or a dependant on 756,500 income tax returns.

TAX AND ESTATE

Follow @JamieGolombek

Jamie Golombek is Managing Director, Tax and Estate Planning with CIBC Private Wealth Management. He works closely with advisors to help them provide integrated financial planning solutions for their high-net-worth clients. Jamie is frequently quoted in the media as an expert on taxation.

New Testamentary Trust Rules May Affect Vulnerable Canadians

www.advisor.ca/togoPodcast > A Little-Known TFSA Fact

4

Fed Counts Down While Canada Lifts Off

ECONOMIC OUTLOOK

U.S.: Focusing on the Fed

Now that quantitative easing (QE) in the U.S. is almost history, the focus is shiftingto the timing of the first move by the U.S. Federal Reserve (Fed). The consensus is that the Fed will move by the middle of 2015, but it is very possible that the initial move will be made by the first quarter. The U.S. economy is surprising onthe upside, and many Fed members are getting a bit nervous about inflation.

Granted, U.S. GDP is now above its pre-recession level, but it is still very far fromthe long-term trend line, which was established decades before that. The keyquestion is to what extent growth can accelerate in the coming years to catch upwith that trend line, or maybe the recession’s significant reduction in capacity ledto a notable slowing in the economy’s potential growth. If the latter is the case,then inflation is much closer than perceived by many.

If indeed the speed limit of the economy is slower than in the past, then you don’tneed much growth to start accelerating inflation. We are not there yet – there is still a positive output gap in the United States. However, with the economy growing at the current rate, this gap will disappear by 2016. Historically, the Feddid not wait until the last day, and started tightening way ahead of the actualclosing of the gap. Again, by the time you see it, it is too late.

If the speed limit is lower, then the neutral interest rate (the rate that producesequilibrium between savings and capital investment in a way that leads to stableinflation) is also lower. This means that the Fed will not have to raise rates bymuch in order to reach a stable economy.

Of course, there is the risk that the Fed will overshoot, since it is very difficult to stop at this unobservable rate when inflation is accelerating. The practical implication of the above is that rates might overshoot in 2015; the bond marketwill underperform; policy rates probably will stabilize in 2016 with bonds onceagain providing short-term opportunities.

Canada: Growing Right Before Our Eyes

The Canadian growth story is looking rosier than previously envisioned. By now,we’re all sick of hearing about the weather, but after slipping in Q1, the economyis set to expand by at least three percent in two consecutive quarters. That initself should force the Bank of Canada to rethink its forecasts. However, this outperformance vis-à-vis prior expectations was centred on sources of demandthat should by now have been flagging, but which were given an extended life by temporary factors.

Residential construction, and, to a greater extent, consumer spending havespurred on the recent strength of the Canadian economy. But as we’ve indicatedin recent research, the growth in household consumption is not being unlocked bysustainable factors, but rather by a significant fall in savings. While the stayingpower of this trend is surprising, it is buying even more time for the arrival of thefuture bulwarks of the Canadian economy: exports and investment.

To some extent, Canada is well-positioned with regard to its export markets. Geography always makes the U.S. key to Canada, but America’s outperformancevs. other G7 countries is enhancing that dependence. In fact, exports destined to the U.S. market are already growing at a near 17 percent year-on-year pace,while those destined elsewhere are up by just under 11percent.

“To some extent, Canada is well-positioned withregard to its export markets. Geography alwaysmakes the U.S. key to Canada, but America’s outperformance vs. other G7 countries is enhancing that dependence.”

Real Neutral Rates Have Fallen (%)

-2.0

-1.0

0

1.0

2.0

3.0

4.0 Canada U.S.

%

0

5

10

15

20

25

30

TwoDecades

Ago

OneDecade

Ago

June2014

0.00

0.04

0.08

0.12

0.16

0.20

60%

50%

40%

30%

20%

10%

0%

10 11 12 13

1985

1990

1995

2000

2005

2010

Fran

ceJa

pan U.

K.Au

stra

liaDe

nmar

kU.

K.

Aust

ralia

Ja

pan

Japa

nBe

lgiu

mSw

eden

Italy

U.

K.Fr

ance

Japa

nU.

S.

U.S.

Switz

erla

ndAu

stra

lia

Pola

nd

Cana

daPo

land

Cana

da Japa

n Au

stra

lia

Aust

ralia

U.

K.

Irela

nd

Irela

nd

Aust

ralia

Total Return

High-Yield

Bonds

Floating-Rate

Loans

Specialty Fixed Income

GlobalBonds

EmergingMarketBonds

Investment-GradeCorporate Bonds

ProvincialBonds

GovernmentBonds

Traditional Fixed Income

1981 1985 1989 1993 1997 2001 2005 2009 2013

Source: CIBC World Markets

5

www.renaissanceinvestments.ca/en/economy/www.renaissanceinvestments.ca/en/economy/

Much of the current momentum is, however, coming from a single sector. Canadahas been leaning more heavily on energy products, now a quarter of its outboundshipments in dollar value, to support exports, investment and economic growth.Estimates from the Canadian Association of Petroleum Producers suggest thatblack gold’s shine isn’t likely to fade any time soon. Applying production estimatesto their relatively stable historical relationship to exports destined for the U.S.suggests that Canada in 2016 will have exported more than 230 million of additional barrels to America than it did in 2013.

Statistics Canada’s business intentions survey has been a good predictor of actualactivity, and the response earlier this year was that CEOs weren’t planning to accelerate domestic capital spending in 2014. Evidently, they were more inclinedto spend on bricks and mortar or takeovers elsewhere. Foreign direct investmentby Canadian companies rose by a record-high nine percent in 2013. The ratio of theoutflow of FDI to capital expenditure is close to 20 percent – again a record high.

“Foreign direct investment by Canadian companiesrose by a record-high nine percent in 2013.”

But a growing proportion of each capital spending dollar is now devoted toreplacements that simply maintain existing levels of production, a trend thatis working to widen the gap between investment and the change in productivecapacity in the economy. The practical implication is that capital investmentmust rise much more quickly in order to accommodate both replacementand expansion investments.

Benjamin Tal is Deputy Chief Economist for CIBC. Described as one of Canada’s leading experts onthe real estate market by the International Monetary Fund, he is responsible for analyzing economic developments and their implications for North American fixed income, equity, foreign exchange and commodities markets.

-2.0

-1.0

0

1.0

2.0

3.0

4.0 Canada U.S.

%

0

5

10

15

20

25

30

TwoDecades

Ago

OneDecade

Ago

June2014

0.00

0.04

0.08

0.12

0.16

0.20

60%

50%

40%

30%

20%

10%

0%

10 11 12 13

1985

1990

1995

2000

2005

2010

Fran

ceJa

pan U.

K.Au

stra

liaDe

nmar

kU.

K.

Aust

ralia

Ja

pan

Japa

nBe

lgiu

mSw

eden

Italy

U.

K.Fr

ance

Japa

nU.

S.

U.S.

Switz

erla

ndAu

stra

lia

Pola

nd

Cana

daPo

land

Cana

da Japa

n Au

stra

lia

Aust

ralia

U.

K.

Irela

nd

Irela

nd

Aust

ralia

Total Return

High-Yield

Bonds

Floating-Rate

Loans

Specialty Fixed Income

GlobalBonds

EmergingMarketBonds

Investment-GradeCorporate Bonds

ProvincialBonds

GovernmentBonds

Traditional Fixed Income

1981 1985 1989 1993 1997 2001 2005 2009 2013

-2.0

-1.0

0

1.0

2.0

3.0

4.0 Canada U.S.

%

0

5

10

15

20

25

30

TwoDecades

Ago

OneDecade

Ago

June2014

0.00

0.04

0.08

0.12

0.16

0.20

60%

50%

40%

30%

20%

10%

0%

10 11 12 13

1985

1990

1995

2000

2005

2010

Fran

ceJa

pan U.

K.Au

stra

liaDe

nmar

kU.

K.

Aust

ralia

Ja

pan

Japa

nBe

lgiu

mSw

eden

Italy

U.

K.Fr

ance

Japa

nU.

S.

U.S.

Switz

erla

ndAu

stra

lia

Pola

nd

Cana

daPo

land

Cana

da Japa

n Au

stra

lia

Aust

ralia

U.

K.

Irela

nd

Irela

nd

Aust

ralia

Total Return

High-Yield

Bonds

Floating-Rate

Loans

Specialty Fixed Income

GlobalBonds

EmergingMarketBonds

Investment-GradeCorporate Bonds

ProvincialBonds

GovernmentBonds

Traditional Fixed Income

1981 1985 1989 1993 1997 2001 2005 2009 2013

Source: CIBC World Markets Source: CIBC World Markets

Energy Products Share of Total Exports (%) Ratio Outflow of FDI to Domestic Capital Expenditure

6

Asset Gathering Secrets of Elite AdvisorsPart 2 – Leveraging Intimate Client Events

BACK OF THE NAPKIN

Something magical happens when we venture into the minds of those who consistently excel in a particular area of expertise. We are able to systematically model their excellence by carefullyunpacking their personal values, beliefs, methodsand approaches.

In this three-part series, we’ll discover how some of the most successful advisors consistently find qualified prospects and gather assets at an above-average rate.

What may be most striking is that “elite” advisors often do not engage inshocking, surprising, or even overly creative activities. What separates successful asset gatherers from the average…is mastery of the fundamentals!

This group has determined that their time and resources are precious, andthat it’s essential to avoid wasting them on low-impact marketing activities.Rather, they focus on 2-3 high-impact prospecting tactics.

Elite advisors understand the marketplace has changed. Although they mayhave built their businesses through traditional methods, they recognize thattoday’s game is won in the arenas of word-of-mouth marketing, face-to-facecontact, and through personal introductions and referrals. Specific tacticsmay vary, but three methods consistently top the list:

In part two of this series, we focus on:

“LEVERAGING INTIMATE CLIENT EVENTS”

Leveraging Intimate Client Events

Gone are the days of large-scale investment seminars. Today’s elite advisorsfocus their efforts on the planning and execution of small, intimate clientevents. These are theme-based gatherings designed around building a socialconnection with your clients and their invited guests.

Let’s take a closer look at some of the most important aspects of these events:

Be Clear on Your Outcome in Advance:

Avoid the temptation to hold these events just to create the illusion of“busy-ness.” Know your outcome in advance by clearly visualizing how your function will unfold from start to finish. Determine that you will initiate a meaningful conversation with each invited guest, while stayingcommitted to keeping it social. Your intimate client event shouldn’t becomea forum for an aggressive sales pitch or a forced education in finance. Speak briefly about your work – only when asked – and then offer to book a time together to go into more detail. The primary goal of your event is to create an emotional connection with your guests, and to begin theprocess of building rapport.

Tailor Your Events to Your Guests:

There are countless possible formats, or themes, for your intimate client events. Your imagination is your greatest ally. The most important consideration when contemplating your themes, is to ensure that you invite the right people to the right events. Make notes throughout the year as you meet with your clients, or when you speak with them on thetelephone. Ask questions about their hobbies, likes and dislikes, and build a file on the things they enjoy doing in their leisure time.

The Power of Strategic Alliances

Leveraging Intimate Client

Events

Capitalizingon Networking Opportunities

7

www.renaissanceinvestments.ca/en/practicemanagement/

An Example:

If you’re aware of several clients who enjoy classical works of art, consider inviting them (and their guests) to a dinner and personal tour of an upcoming exhibit at your local art gallery. You may haveother clients who would take great pleasure from attending a wine-tasting and food-pairings event at a local vineyard. Your automobile enthusiasts would gladly attend a “classic cars” show with a chef-hosted cocktail reception. The options are endless.

Obsess Over Your Pre-event Planning:

Spend quality time with your team on the planning of your event in advance.All too often, these functions are thrown together with little regard for thesmaller, but critical, moving parts. The details matter and will ultimately determine the success of your event. Carefully consider the following elements in advance:

• Your client invitee list (suitability to your theme)

• The specific “friends” you would like your clients to invite

• The date and time of your event

• The sights, sounds and atmosphere of your chosen venue

• The agenda and timing of your event – from start to finish

• Your specific desired outcome for each client and guest

• Your “mingling strategy”

• Your team’s roles and responsibilities at the event

Follow-up Early and Often:

Elite advisors know that timely follow-up is key to capitalizing on their intimate client events. Touch base personally, by telephone, within 24-36hours to thank your guests for joining you at your event. Pick up where youleft off on a particular topic of conversation and casually remind them ofwhat you do for a living. Sometimes, this can be done very effectively bysimply relating a story about a client who approached you with a difficultissue – which you were able to quickly and easily resolve. With other attendees, you may have built sufficient rapport during your event, making it feel perfectly natural to offer them a complimentary portfolio review orsomething similar. Regardless of how it’s done, ensure that you advance the relationship in some way, shape or form.

Rinse and Repeat:

The advisors who consistently gather assets through intimate client events do so by holding events frequently throughout the year. Most would agree thatmonthly is best, but certainly no fewer than six to nine social events per year.

Repetition is the mother of skill, and mastering the art of conducting intimateclient events is no exception. Practice makes perfect…and with frequencywill come greater effectiveness in all aspects of your event. You may chooseto specialize in just one type of event, and simply repeat the identical formatnine to 12 times a year. With this approach, the planning and execution ofyour client events will take on an unparalleled degree of mastery, as yourteam continues to refine the process and reap the rewards.

“Repetition is the mother of skill, and mastering the art of conducting intimate client events is no exception. Practice makes perfect…and with frequency will come greater effectiveness in all aspects of your event.”

This Asset Gathering Secrets of Elite Advisors Series continues in future editions of The Renaissance Advisor. Upcoming insightsfrom Grant will include:

PART 3 – CAPITALIZING ON NETWORKING OPPORTUNITIES

Grant Shorten is Director of Strategic Insights at Renaissance Investments. He offers insights and approaches that will work with your clients and have an immediate impact on your practice.

Video > Fee Transparency & You: Validating Your Trailer

www.advisor.ca/togoPodcast > How to Answer Common Fee Questions

8

This quarter, we asked our investment advisor partners to discuss how the all-in-one Renaissance Optimal Income Portfolio has met real client needs through an extended

period of low rates and two major market downturns since 2007.

Matt TolleyInvestment AdvisorEdward Jones

Cyrilla SaundersVice President, Investment Advisor, CIBC Wood Gundy

Kathy RobertsonAssociate Investment Advisor, CIBC Wood Gundy

9

REAL NEED #1:DOWNSIDE PROTECTION

REAL OUTCOME:A smoother ride with over 70% less volatility through two major

market downturns1

Central banks and governments moved in to support financial markets at thebeginning of the credit crisis. The steps they took were important, but theU.S. Federal Reserve (Fed) likely overstayed its welcome and a return to“normal” is now appropriate. That probably means even more volatility for financial markets. “Downside protection and portfolio stability have becomemore important than ever,” says Patrick O’Toole, Vice-President Global FixedIncome, CIBC Asset Management and co-manager of Renaissance OptimalIncome Portfolios. “The importance of diversification can’t be overestimatedin volatile markets.”

“2011 provided a great example of how Renaissance Optimal Income Portfoliocan perform in a declining market. The TSX was down about nine percent,while the portfolio returned over four percent,”says Matt Tolley, an investmentadvisor with Edward Jones in Osoyoos, BC. “Performance like that is very reassuring to clients and a good reminder of why they are holding this product.”

In declining markets, CIBC Wood Gundy Investment Advisor Cyrilla Saundersand Associate Investment Advisor Kathy Robertson in Charlottetown, PEI, try to avoid selling any equity position beaten up by negative market activity.They depend on solutions like Renaissance Optimal Income Portfolio toround out portfolios and be their “steady player,” providing consistent cashflows and sustaining portfolio valuations.

Robertson points out how easy it is to be positive when everything in a portfolio is performing well. She and Saunders believe the real measure oftheir success is clients’ comfort level when financial markets decline.

“Renaissance Optimal Income Portfolio was launched in late 2007, an idealtime to be put to the true test of volatility. To be able to discuss the negative2008 return of -12.3 percent, which was almost fully recaptured in 2009 with a positive 13.4 percent, was a tremendous joy to both our clients andour team. We are grateful that we can push greed aside while continuing tohave our clients’ best interests at hand.”

The portfolio provides downside protection by offering broad diversificationacross asset classes. In fixed income, diversification comes from exposure to investment-grade bonds, real-return bonds, high-yield bonds, global bondsand floating-rate loans. Within equities, diversification is achieved with dividend stocks and infrastructure stocks.

Downside Protection1

CANADIAN BONDS

GLOBAL BONDS

HIGH-YIELD BONDS

REAL RETURN BONDS

FLOATING-RATE LOANS

CANADIAN DIVIDENDS

GLOBAL INFRASTRUCTURE

RENAISSANCE

OPTIMALINCOMEPORTFOLIOWhen the financial crisis hit in 2008, it was a surprise to many investors. Few investors, sophisticated or novice, had positioned their portfolios for the upheaval that followed. It’s a much different story in 2014, but there are some similarities. The biggest one – the economic landscape is obviously changing.

In times of uncertainty, particular investment needs come to the fore: downside protection in volatile markets, the potential for stable growth and the ability to consistently deliver income despite market conditions. In order to meet these needs, a portfolio typically requires a specific and strategic mix of underlying assets.

Aug-2014

Aug-2013

Aug-2012

Aug-2011

Aug-2010

Aug-2009

Aug-2008

Nov-2007

($ Value in 000)15

14

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11

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9

8

7

6

5

2011 Downturn

Global Financial Crisis

Renaissance Optimal Income PortfolioS&P/TSX Composite Total Return Index

10

REAL NEED #2: STABLE GROWTH

REAL OUTCOME: Annualized return of 8% over five years2

“After significant market corrections and increased geopolitical risk, investors still want growth, but they want stable growth,” says O’Toole,pointing out how investor attitudes have evolved over the last several years.

Tolley agrees, but also highlights that clients sometimes forget about risk,especially with the strong equity markets we’ve seen in the past 12 months.He speaks frequently with his clients and sees himself as the buffer betweenclients and their portfolios. “I try to remind clients that if you’re capturing all of the market returns on the upside in a strong bull market, you’re often exposing yourself to much of the market’s downside during a correction.Most clients can’t stomach more than a moderate amount of portfoliovolatility,” he emphasizes.

“I try to remind clients that if you’re capturing all of the market returns on the upside in a strongbull market, you’re often exposing yourself to much of the market’s downside during a correction.” Matt Tolley, Investment Advisor, Edward Jones

Tolley uses Renaissance Optimal Income Portfolio for clients who want consistentreturns with lower volatility. For him, the product provides “an all-in-one solution and an excellent foundation for building an investment portfolio.”

The portfolio is structured to provide stable growth in various market environments. Assets such as real-return bonds and infrastructure stocks areused to protect against rising inflation. Floating-rate loans provide a layer ofprotection from rising interest rates. Diversified fixed income vehicles andgood-quality, dividend-paying stocks also add yield to the portfolio.

Stable Growth2

REAL NEED #3: CONSISTENT INCOME

REAL OUTCOME: 7 years of 4% annual average distribution3

“The quality and selection of fixed income solutions included in RenaissanceOptimal Income Portfolio are not widely available in the retail market,” underlinesRobertson. Clients who need consistent income often rely on a fixed incomeportfolio. But access to products such as emerging market bonds, globalbonds, high-yield bonds and floating-rate loans, that can help mitigate therisks of fixed income investing, are not widely available to individual investors. The portfolio makes that diversification possible.

Fixed Income Opportunity Universe

“It is obvious that Renaissance Optimal Portfolio, with its regular monthlydistribution of approximately four percent (which allows for capital growth),or its T6 or T8 tax-efficient distributions, suits the client who wants or needscash. These timely, tax-efficient cash flows provide a great solution for ourteams,” says Robertson.

Consistent Income3

Renaissance Optimal Income Portfolio Category†

1 year

16%

14%

12%

10%

8%6%

4%

2%

0%2 years 3 years 5 years Since

inception

Renaissance Optimal Income Portfolio Distribution Yield – Class A units

5%

4%

3%

2%

1%

0%

Sept-2014

Sept-2013

Sept-2012

Sept-2011

Sept-2010

Sept-2009

Sept-2008

Nov-2007

-2.0

-1.0

0

1.0

2.0

3.0

4.0 Canada U.S.

%

0

5

10

15

20

25

30

TwoDecades

Ago

OneDecade

Ago

June2014

0.00

0.04

0.08

0.12

0.16

0.20

60%

50%

40%

30%

20%

10%

0%

10 11 12 13

1985

1990

1995

2000

2005

2010

Fran

ceJa

pan U.

K.Au

stra

liaDe

nmar

kU.

K.

Aust

ralia

Ja

pan

Japa

nBe

lgiu

mSw

eden

Italy

U.

K.Fr

ance

Japa

nU.

S.

U.S.

Switz

erla

ndAu

stra

lia

Pola

nd

Cana

daPo

land

Cana

da Japa

n Au

stra

lia

Aust

ralia

U.

K.

Irela

nd

Irela

nd

Aust

ralia

Total Return

High-Yield

Bonds

Floating-Rate

Loans

Specialty Fixed Income

GlobalBonds

EmergingMarketBonds

Investment-GradeCorporate Bonds

ProvincialBonds

GovernmentBonds

Traditional Fixed Income

1981 1985 1989 1993 1997 2001 2005 2009 2013

11

Aside from clients who need a constant income stream, consistent incomeprovides another advantage. Tolley has noticed that, if an asset price is littlechanged or even declining, some clients find it hard to stay invested. This istrue even for investments that may be deeply undervalued “hidden gems.” A portfolio with a regular income stream is an excellent way to help keepclients invested, he points out. In effect, investors are getting “paid to wait.”

This helps maintain discipline in volatile markets. “In some ways it can becompared to renting out a property while you’re waiting for it to appreciatein value. The regular income makes it advantageous, and psychologicallyeasier, to stay with the investment and avoid selling it prematurely.”

The challenges on the horizon for investors can become advantages by keeping some simple strategies in mind. Portfolios with a steady incomestream help keep investors committed in volatile markets. Stable growth andsteady portfolio returns during erratic market swings provide reassurance.Downside protection that preserves portfolio value means capital is stillavailable to take advantage of future opportunities. Renaissance Optimal Income Portfolio provides these benefits in one simple solution.

ADVISOR ToGoAccess the ExpertsWhen You Need Them

Access to the experts when you need them

Patrick Bradley, Brandywine Global Podcast > A Closer Look at Emerging Markets

Nick Langley, RARE Infrastructure Podcast > Power Up Clients’ Portfolios

Stephen Carlin, CIBC Asset Management Podcast > How Much Volatility is too Much?

Nicholas Leach, CIBC Asset Management Podcast > How to Handle High-yield Bonds

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1 Compared to the S&P/TSX Composite Total Return Index. Volatility is measured by standard deviation of the daily returns over the periods June 18, 2008 to March 9, 2009 (Fund: 12.50, Index: 56.01) andApril 5, 2011 to October 3, 2011 (Fund: 6.10, Index: 23.11).

2 Performance for the five-year period ending August 31, 2014. The inception date of the fund was November 13, 2007. †Morningstar Canadian Fixed Income Balanced Category. The indicated rates of returnare the historical annual compounded total returns for class A units, including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution oroptional charges or income taxes payable by a security holder that would have reduced returns.

3 Distribution yield of the Class A units of the fund for the period November 13, 2007 (inception) to September 30, 2014. The distribution yield at a given time is calculated by dividing the distributions madeover the 12-month period prior to that time by the market value at that time. The fund intends to distribute monthly. The monthly distribution rate is expected to be 1/12th of approximately 4% per annumfor Class A units. Distributions for other classes may vary. The monthly distribution rates may be adjusted from time to time at our discretion. The payment of distributions is not guaranteed and mayfluctuate. If the annual amount distributed exceeds the portfolio's net income and net realized capital gains, such excess will constitute a return of capital. The total return of Class A units since inception,assuming that distributions have not been reinvested, is 4.0%.

“The quality and selection of fixed income solutionsincluded in Renaissance Optimal Income Portfolioare not widely available in the retail market.” Kathy Robertson, Associate Investment Advisor, CIBC Wood Gundy

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Source: Bloomberg. Returns in USD represented by Citigroup WGBI.

The Global Bond Advantage

SOLUTION HIGHLIGHT: RENAISSANCE GLOBAL BOND FUND

Four Pillars of Superior Risk-Adjusted Returns Access Global Bonds with:Brandywine Global Investment Management

Invests inbonds withthe highestreal yields

1 2 3 4

Actively manages currency exposures to protect principal & enhance returns

Patientlyrotatesamongcountries

Controls risk by purchasingundervalued securities

Diversify Bonds to Address Rising Rates

As global central banks tighten monetary policies, there will be upwardpressure on interest rates and downward pressure on bond prices. Dueto different economic and monetary cycles across the globe, not all interest rates follow the same path and not all bond markets feel thesame price impact at the same time. Investors who diversify fixed income globally can benefit from these price differences.

Add Exposure to a Wide Range of Markets to Lower Risk

Global bonds offer exposure to monetary policies, interest-rate profiles,inflation and economic cycles of markets outside North America. A globally diversified bond mix offers benefits from positive factors insome countries, potentially offsetting some of the downside in others.

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Best-performing Countries Differ Every Year

• Pure Play: Renaissance Global Bond Fund

• Diversified Approach: Renaissance Optimal Income Portfolio (10 percent allocation)

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Be Interested in Clients’ Lives

THANKS TO OUR SUPPORTERS

Without the support of advisors like you, Renaissance Investments would not enjoy the privilege of helping so many Canadians realize their investment goals. Here is one of the outstanding professionals we are so very proud to work with.

What do you love about the business?

I love building relationships with all different types of people, especially those Iwouldn’t necessarily meet if I wasn’t a financial advisor.

What is your personal formula for building strong client relationships?

To be interested in clients’ lives. Not all advisors are really interested in thoseaspects of a client’s life – they’ll complete the KYC form but don’t take it further. I like to delve into their interests and passions.

What are the most common client concerns you hear and how do youaddress them?

The biggest concern is the costs associated with investing, and how an advisorgets paid. To make conversations easier, I bring this up myself. I’m happy my firm is taking leadership and disclosing fees plainly on statements and confirmations, even before the industry mandates we disclose this information.This transparency is necessary to build long-term client relationships.

Are there areas or themes of financial or investment planning that youplan to focus on more in the future?

Many advisors are focused on estate planning and the coming inter-generationaltransfer of wealth. I’m taking a different approach by speaking with youngerclients, a typically underserved group. These relationships can form the foundationof your business for many years to come. In addition, starting a financial plan at a young age can be extremely beneficial, as time works in your favour.

Best tips for gaining new clients:

Follow up in a timely manner, whether you meet someone at an event, chatwith them on the street, or are following a lead from an existing client. Followup with a phone call, email or handwritten note. Many advisors drop the ballon follow-up and it’s very important.

Favourite hobbies:

My wife and I love curling and soccer. I tried surfing when I was in Hawaii andwas surprised how much core strength is needed. Soccer and curling are goodexercise, but surfing is a challenge.

One item I can’t be without:

She’s not “an item,” but I couldn’t do without my assistant, Allison. She runsthe office and makes sure everything is handled. I couldn’t maintain and growmy business without her.

Firm: Edward Jones, Osoyoos, BC

Years in Business: 5

Team Members: 2

MattTolley

Profiling a few mouth-watering favourites. Sounds good, eh?

The delicate crispness of the air and the beautiful colours of turning leaves can mean only one thing – welcome fall. { }

comfo fdC A N A D I A N

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Profiling a few mouth-watering favourites. Sounds good, eh?

The delicate crispness of the air and the beautiful colours of turning leaves can mean only one thing – welcome fall.

comfo fd What do you “Put In” that?French fries covered in cheese curds and slathered with gravy. Three simpleingredients make up poutine, arguably the epitome of Canadian comfort food.Although it’s difficult to pin down its exact birthplace, the dish originated inQuebec in the late 1950s.¹ Since then, many delightful variations of classicpoutine have popped up across the country – some with luxe toppings likepulled pork, bacon, foie gras and lobster.

In 2007, the CBC polled viewers on the greatest Canadian inventions of alltime – number 10 on the list was poutine. It beat out the electron microscope,the BlackBerry, radio voice transmission and lacrosse.² Poutineries are poppingup across Canada and the web islaced with blogs dedicated tofinding the perfect poutine.

Potatoes, PotatoesPoutine wouldn’t be completewithout the fries, so we must pay homage to the vegetable that brings it alltogether. Mashed, baked, scalloped or fried, whichever way you prefer them,potatoes are a comfort food staple. And luckily, we don’t have to go far toget them – Prince Edward Island (PEI) is our potato-hub! Trademarked for theirunique growing conditions, PEI potatoes thrive on the island’s warm summers,cold winters, natural precipitation and red soil, high in iron oxide. PEI potatoescome in red, white, yellow and blue so you can have a beautiful potato bouquet at your next dinner.

Perogies are one of our popular potato favourites. Dauphin, Manitoba hasmade a name for itself as the host of Canada’s National Ukrainian Festival.Each summer, thousands of Ukrainians from across the country, and aroundthe world, descend upon the city to celebrate music, tradition and the

perfect potato perogies.

Alongside their cooking possibilities,potatoes are packed with nutritionalvalue. One medium-sized potatocontains up to 45 percent of yourdaily recommended intake of vitamin C, and more potassium

than a serving of bananas or broccoli.³

WeYAlberta BeefMeat and potatoes are comfort food’s backbone, especially when pulled from a warm crockpot. Moving west, Canada offers acres of open range and fertile farmland – welcome to cattle country. Beef cattle production is Alberta’s largest agricultural sector, responsible for 44 percent of the nation’s total production. Alberta beef is a powerhouse industry and Canadians fuel it – 65 percent of Alberta beef is consumed domestically.4

The industry is woven right into the western way of life and is celebrated annually at the Calgary Stampede; the Cattle Trail exhibit showcases its emphasis on safe food production standards, environmentally sustainable practices and animal welfare.5

Make the most of Alberta beef this fall in savory casseroles, chilies and stews. And how about the smell of a pot roast on Sunday afternoon? Sublime. The slow cooker is almost a potpourri dish of smells wafting through the home as the hearty goodness inside cooks to perfection. True Canadians also know that while barbeque season may technically be over, we don’t have to wait another year to grill our steaks. Simply shovel a path from door to barbeque and enjoy year-round.

Shake it up at the Sugar Shack A look to our beloved national flag gives lead to a sweet favourite. The roots of the maple tree rundeep in Canada’s history, and its iconic leaf has easily become synonymous with our Canadian identity, and along with it, maple syrup.

Originally collected by native Canadians, maple syrup soon caught on withEuropean settlers, especially in Quebec. The province’s maple syrup industryis the largest producer in the world and its profits feed the economy.6

It’s the perfect time – and excuse – to give in to our desire for comfort, and to insulate our bodies again. Canadian comfort food has been shaped by our continuous waves of immigration, and by our vast and differing landscape. It’s less about a particular dish, and more about the ingredientsthemselves, how they are combined, and what they mean to us. So come in from the cold and find a meal that warms you to the core.

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Potatoes retain heat well (think hot potato!) so the next time you need a warm compress, boil a potato or two, wrap in a clean cloth, and apply to your aching muscles.

Alberta’s cattle industry contributed $12.7 billion to the Canadian economy in 2012.

The idea of dunking a doughnut in coffee caught on from the 1934 Clark Gable film It Happened One Night.12

Japan relies on Canada for 99 percent of its maple sugar and maple syrup supply.13�

In 1675, the King of England banned coffee houses, claiming they were places where people met to conspire against him.

Sources: 1http://en.wikipedia.org/wiki/Poutine. 2http://www.nytimes.com/2007/05/23/dining/23pout.html?_r=2&. 3http://www.peipotato.org/why-pei-potatoes/nutrition-facts. 4http://www.albertabeef.org/page/about-industry. 5http://ag.calgarystampede.com/upload/press_release/710/01/news-release---calgary-stampede-beef-cattle-highlights.pdf.6http://www.siropderable.ca. 7http://www.purecanadamaple.com/benefits-of-maple-syrup/antioxidants-in-maple-syrup.8http://www.purecanadamaple.com/benefits-of-maple-syrup/antioxidants-in-maple-syrup. 9http://www.cbc.ca/archives/categories/lifestyle/food/my-canada-includes-tour. 10http://www.coffeeassoc.com/coffeeincanada.htm. 11http://en.wikipedia.org/wiki/Tim_Hortons12http://fb-troublemakers.com/12-interesting-facts-about-doughnuts-17307/ 13http://www.ats-sea.agr.gc.ca/asi/6164-eng.htm

Canadian Comfort Food: Cocktail Conversation Starters

The cabane à sucre is ingrained in its culture andan annual tradition in early spring. A visit to aQuebec ‘sugar shack’ is a great event – you’llenjoy amusements like live music and dancing,and of course, have the opportunity to put maplesyrup on everything, right from the jug in the middle of your table.

Maple syrup does offer some unexpected healthbenefits and features 54 different antioxidants.7

This significantly differentiates Canada’s maple syrup from its competitors,and it is ranked between bananas, raw broccoli and gala apples in terms of its antioxidant strength.8 So don’t feel so guilty when you pour it over your pancakes!

Doughnut Forget the Coffee!The Brits have their tea; we have our coffee. If going without your daily doseinduces a sense of panic, you’re not alone. Next to tap water, coffee is thefavourite beverage of adult Canadians, with the average coffee drinker consuming 2.6 cups of coffee each day.9

And at the heart of Canadian culture is the combination of coffee and doughnuts. We know that pairing a fresh cup of coffee with your maple-glazed doughnut makes a delightful combination. This, along with free Wi-Fi, is probably why 57 percent of the prepared coffee we consume is purchased at doughnut or bagel shops.10� Canadians eat more doughnuts per capita and have more doughnut outlets than any other nation.¹¹

And let’s not forget about the hockey rink. Whether you bring your coffee, or buy it from the arena’s coin machine, it’s a major part of the rink routine.The warmth and comfort of a coffee-in-hand has made it a Canadian accessory. And it’s no coincidence we’ve got two hands. The other is to hold the doughnut, of course.

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Check your answers at www.renaissanceinvestments.ca/magazine/answers/

brain calisthenics

Spot the difference – Can you spot the five differences between the pictures below?

Sudoku – Complete the Sudoku puzzle so that each and every row, column and 3x3 box contains the numbers one through nine only once.

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Word scramble – Unscramble the following letters to spell words from the article on pages 8-11:

1. dewsoind

2. lyloitativ

3. nvaetige

4. uarrtcdeep

5. tlesab

6. iplictoelaog

7. conentssit

8. miiatetg

9. eelurdvdnau

10. hioznro

Source: 4puz.com

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®Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc.1For Renaissance Premium Class funds. Based on target MER, where applicable: while Renaissance Investments intends to meet the stated MER and will waive management fees or absorb certain expenses to do so, we may discontinue this practice at any time. Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.

FOR ADVISOR USE ONLYRenaissance Investments and the Axiom Portfolios are offered by CIBC Asset Management Inc.This material was prepared for investment professionals only and is not for public distribution. It is for informational purposes only and is not intended to convey investment,legal or tax advice. The material and/or its contents may not be reproduced or distributed without the express written consent of CIBC Asset Management Inc.® Axiom, Axiom Portfolios and Renaissance Investments are registered trademarks of CIBC Asset Management Inc.

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