Annual Management Report of Fund Performance.Pdf
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CI Global Equity Alpha Private Pool Management Report of Fund Performance for the year ended March 31, 2021 This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements of the investment fund. You can get a copy of the annual financial statements at your request, and at no cost, by calling 1-800-792-9355, by writing to us at CI Investments Inc., 2 Queen Street East, Twentieth Floor, Toronto, ON, M5C 3G7 or by visiting our website at www.ci.com or SEDAR at www.sedar.com. Securityholders may also contact us using one of these methods to request a copy of the investment fund’s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure. To request an alternate format of this document, please contact us at [email protected] or 1-800-792-9355. INVESTMENT OBJECTIVE AND STRATEGIES The performance of the Fund’s other Series is substantially similar to that of Series A The investment objective of the CI Global Equity Alpha Private Pool (the Fund) is to units, except for differences in the structure of fees and expenses. For the returns of the seek long-term capital growth by investing primarily in equity securities of companies Fund’s other Series, please refer to the “Past Performance” section. worldwide. Equity markets, as defined by the MSCI ACWI Index, posted significant gains over the To fulfill this investment objective, the Fund will primarily invest in a portfolio of equity year. Although the year has been defined by the pandemic, global stocks ended higher securities of companies worldwide, including companies located in emerging markets. amid sizable stimulus, continued accommodative monetary policy and positive news It may invest in small, medium and large-capitalization companies, but will focus on mid on vaccination rollouts. Individuals stuck at home during lockdowns began piling into to large-capitalization companies. Although diversified by country, industry and company, so-called meme stocks, special-purpose acquisition companies, cryptocurrencies and the Fund’s portfolio will be focused and concentrated and will generally have less than nonfungible tokens. 25 equity holdings. The rotation away from growth stocks into more cyclical and value-oriented stocks began When selecting securities for the Fund, the portfolio advisor’s approach is to invest in in November of 2020 on the news of vaccine efficacy and continued in the first quarter globally-competitive companies within growing sectors. The portfolio advisor takes a of 2021. long-term view of the world and strives to understand the economics and characteristics of different businesses and industries. The portfolio advisor analyzes historical financial All major global regions ended the year in positive territory in U.S.-dollar terms. Given its performance, trends and technological changes in the business, sensitivity to economic exposure to “old economy” stocks, the neglected U.K. equity market went from a laggard factors as well as other factors which may affect the future economics of the business. in 2020 to a leader in the first quarter of 2021. The portfolio advisor strives to select companies with industry leadership, strong management, growing profits and potential for capital appreciation. The Fund slightly outperformed its benchmark for the year, in part owing to stock selection in the industrials, materials and consumer staples sectors. Individual contributors to For a complete discussion of the Fund’s investment objective and strategies, please refer performance included The Weir Group PLC, a focused engineering technology company to the Fund’s most recently filed simplified prospectus. with approximately 80% of revenue from mining markets. The company recovered significantly from its pandemic-related sell-off in early 2020, and the sale of its oil & RISK gas division to Caterpillar Inc. was well received. Shares of Wienerberger AG, a leading No changes affecting the overall level of risk associated with investing in the Fund producer of bricks, clay roof tiles, concrete pavers and pipe systems, rose on expectations were made during the year. The risks of the Fund remain as discussed in the Fund’s of further investment in infrastructure, residential construction and renovations across most recently filed simplified prospectus or its amendments. The Manager reviews the mainland Europe, the United Kingdom and the United States. Interpublic Group of risk rating for the Fund on an annual basis, at a minimum, based on the methodology Companies Inc., a global provider of creative and data-driven marketing solutions, mandated by the Canadian Securities Administrators to determine the risk level of announced stronger-than-expected fourth-quarter earnings and benefited from the the Fund. Any change to the risk rating made during the year was as a result of such reacceleration in online advertising spending following the initial pandemic-related review and was not a result of any change to the investment objective, strategies or slowdown. Schneider Electric SA, a global leader in energy management and automation management of the Fund. solutions, performed well given its exposure to growth in renewable power, connectivity and automation. FTI Consulting Inc. is an independent global business advisory firm RESULTS OF OPERATIONS dedicated to helping corporations, governments and law firms manage change, mitigate The Fund’s net assets decreased by $5.7 million to $96.9 million from March 31, 2020 risk and resolve disputes. Share prices increased sharply on news of a better-than- to March 31, 2021. The Fund had net redemptions of $32.9 million during the year. expected fourth quarter of 2020, strong guidance for fiscal year 2021 and a significant The portfolio’s performance increased assets by $27.6 million. The Fund paid distributions stock buyback. totalling $0.4 million. Series A units returned 38.3% after fees and expenses for the one-year period ended March 31, 2021. Over the same time period, the Fund’s benchmark The Fund’s stock selection in the consumer discretionary, health care and energy sectors returned 38.2%. The benchmark is the MSCI World Total Return Index (the Benchmark detracted from performance. Individual detractors included Santen Pharmaceutical Co. or the Index). Ltd., a global pharmaceuticals company specializing in ophthalmology, as shares fell CIG - 2056 CI Global Equity Alpha Private Pool Management Report of Fund Performance for the year ended March 31, 2021 on concerns about its Chinese business and competition from local generic companies. Effective July 29, 2020, units that were previously issued as Class A, Class A1, GlaxoSmithKline PLC cautioned that its full-year 2020 earnings would likely come in at Class A2, Class A3, Class A4, Class A5, Class AH, Class AT5, Class A1T5, Class A2T5, the lower end of its forecast range as people were reluctant to visit their physicians for Class A3T5, Class AT6, Class AT8, Class A1T8, Class A2T8, Class A3T8, Class C, vaccinations during the pandemic. The company’s shares also dipped on the news that Class D, Class E, Class ET5, Class ET8, Class EF, Class EFT5, Class EFT8, Class F, Sanofi SA and GlaxoSmithKline PLC delayed advanced trials of their COVID-19 vaccine Class F1, Class F2, Class F3, Class F4, Class F5, Class FH, Class FT5, Class F1T5, after it failed to produce a strong enough response in older people. Booz Allen Hamilton Class FT8, Class F1T8, Class F2T8, Class F3T8, Class H, Class I, Class IH, Insight Class, Holding Corp. is a consulting firm with expertise in analytics, digital, engineering and Class IT8, Class IU, Class O, Class OO, Class OT5, Class OT8, Class P, Class PH, cybersecurity that works with government and military organizations. Investors sold the Class PP, Class PT5, Class PT8, Class S, Class U, Class UT6, Class W, Class WH, stock on concerns that the weaker revenue and declining backlog was a sign that added Class X, Class Y, Class Y1, Class Y2, Class Y3, Class Z, Class Z1, Class Z2, Class Z3 and government spending owing to the pandemic would slow government defense-related Class Z4, as applicable, were renamed as Series A, Series A1, Series A2, Series A3, contracting revenues in 2021. Galp Energia SGPS SA is an Iberian-based integrated oil Series A4, Series A5, Series AH, Series AT5, Series A1T5, Series A2T5, Series A3T5, and gas operator that has a low cost of production owing to offshore Brazilian assets. Series AT6, Series AT8, Series A1T8, Series A2T8, Series A3T8, Series C, Series D, Shares were lower amid lockdowns and volatility in crude oil prices. The Fund’s lack of Series E, Series ET5, Series ET8, Series EF, Series EFT5, Series EFT8, Series F, exposure to Apple Inc. also detracted. Series F1, Series F2, Series F3, Series F4, Series F5, Series FH, Series FT5, Series F1T5, Series FT8, Series F1T8, Series F2T8, Series F3T8, Series H, Series I, Series IH, New positions in the Fund included Baidu Inc., Bureau Veritas SA, DBS Group Holdings Insight Series, Series IT8, Series IU, Series O, Series OO, Series OT5, Series OT8, Ltd., Ebara Corp., Heidelberg Cement AG and Nice Ltd. Series P, Series PH, Series PP, Series PT5, Series PT8, Series S, Series U, Series UT6, Series W, Series WH, Series X, Series Y, Series Y1, Series Y2, Series Y3, Series Z, Positions that were eliminated from the Fund included ASICS Corp., Booking Holdings Series Z1, Series Z2, Series Z3 and Series Z4, respectively. Inc., ICICI Bank Ltd., Murata Manufacturing Co. Ltd., Thule Group AB and Wienerberger AG. Booking Holdings Inc., Murata Manufacturing Co. Ltd. and Wienerberger AG were CI Investments Inc. rebrands as CI Global Asset Management Inc. sold for valuation reasons following strong recoveries from their pandemic-related lows. On November 10, 2020, CI Investments Inc. announced that it is rebranding to CI Global ASICS Corp., ICICI Bank Ltd.