Scotia Private Pools and Pinnacle Portfolios
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® 2020 Scotia Private Pools and Pinnacle Portfolios Annual Report December 31, 2020 Bond Funds Scotia Private Canadian Core Bond Pool Scotia Private Income Pool Scotia Private High Yield Income Pool Scotia Private American Core-Plus Bond Pool Scotia Private Global High Yield Pool Balanced Fund Scotia Private Strategic Balanced Pool Canadian Equity Funds Scotia Private Canadian Value Pool Scotia Private Canadian Mid Cap Pool Scotia Private Canadian Growth Pool Scotia Private Canadian Small Cap Pool Foreign Equity Funds Scotia Private U.S. Value Pool Scotia Private U.S. Mid Cap Value Pool Scotia Private U.S. Large Cap Growth Pool Scotia Private International Equity Pool Scotia Private International Small to Mid Cap Value Pool Scotia Private Emerging Markets Pool Scotia Private Global Equity Pool Scotia Private Global Infrastructure Pool Scotia Private Global Real Estate Pool Pinnacle Portfolios Pinnacle Balanced Portfolio Table Financial Statements 1 Bond Funds of Contents 3 Scotia Private Canadian Core Bond Pool 10 Scotia Private Income Pool 16 Scotia Private High Yield Income Pool 23 Scotia Private American Core-Plus Bond Pool 32 Scotia Private Global High Yield Pool Balanced Fund 41 Scotia Private Strategic Balanced Pool Canadian Equity Funds 47 Scotia Private Canadian Value Pool 52 Scotia Private Canadian Mid Cap Pool 57 Scotia Private Canadian Growth Pool 62 Scotia Private Canadian Small Cap Pool Foreign Equity Funds 66 Scotia Private U.S. Value Pool 70 Scotia Private U.S. Mid Cap Value Pool 74 Scotia Private U.S. Large Cap Growth Pool 78 Scotia Private International Equity Pool 84 Scotia Private International Small to Mid Cap Value Pool 91 Scotia Private Emerging Markets Pool 97 Scotia Private Global Equity Pool 102 Scotia Private Global Infrastructure Pool 107 Scotia Private Global Real Estate Pool The Pinnacle Portfolios 112 Pinnacle Balanced Portfolio 116 Notes to the Financial Statements 128 Management’s Responsibility for Financial Reporting 129 Independent Auditor’s Report 2 Scotia Private Canadian Core Bond Pool 3 STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOME As at For the period ended December 31 (note 1), December 31, (in dollars except average units) 2020 (in dollars) 2020 INCOME ASSETS Net gain (loss) on financial assets and liabilities at fair value through profit or Current assets loss Financial assets at fair value through profit or loss (note 2) Dividends 591 Non-derivative financial assets 265,685,173 Interest for distribution purposes 4,441,062 Cash 96,769 Net realized gain (loss) on non-derivative financial assets 1,696,711 Receivable for securities sold 469,195 Change in unrealized gain (loss) on non-derivative financial assets 5,743,531 Subscriptions receivable 336,021 Net gain (loss) on financial assets and liabilities at fair value Accrued investment income and other 1,198,463 through profit or loss 11,881,895 Total assets 267,785,621 Securities lending (note 11) 1,380 Other income 12,760 LIABILITIES Current liabilities Total income (loss), net 11,896,035 Payable for securities purchased 743,584 EXPENSES Redemptions payable 93,523 Management fees (note 5) 1,465 Total liabilities 837,107 Fixed administration fees (note 6) 140,591 Independent Review Committee fees 1,356 Net assets attributable to holders of redeemable units 266,948,514 Interest expense 756 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS Harmonized Sales Tax/Goods and Services Tax 14,849 PER SERIES Transaction costs 633 Pinnacle Series 262,574,205 Total expenses 159,650 Series F 505,662 Series I 3,868,647 Increase (decrease) in net assets attributable to holders of redeemable units from operations 11,736,385 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS PER UNIT INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERS Pinnacle Series 10.39 OF REDEEMABLE UNITS FROM OPERATIONS PER SERIES Series F 10.36 Pinnacle Series 11,692,369 Series I 9.95 Series F 7,370 Series I 36,646 INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS FROM OPERATIONS PER UNIT† Pinnacle Series 0.65 Series F 0.33 Series I 0.09 WEIGHTED AVERAGE NUMBER OF UNITS PER SERIES Pinnacle Series 18,056,343 Series F 22,043 Series I 389,282 † The increase (decrease) in net assets attributable to holders of redeemable units from operations per unit is calculated by dividing the increase (decrease) in net assets attributable to holders of redeemable units from operations per series by the weighted average number of units per series. BOND FUNDS The accompanying notes are an integral part of these financial statements. Portfolio Adviser: Fiera Capital Corporation Scotia Private Canadian Core Bond Pool (continued) 4 STATEMENT OF CHANGES IN NET ASSETS STATEMENT OF CASH FLOWS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE For the period ended December 31 (note 1), UNITS (in dollars) 2020 For the period ended December 31 (note 1), CASH FLOWS FROM OPERATING ACTIVITIES (in dollars) 2020 Increase (decrease) in net assets attributable to holders of redeemable units 11,736,385 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS, Adjustments for: BEGINNING OF PERIOD Net realized (gain) loss on non-derivative financial assets (1,696,711) Pinnacle Series – Change in unrealized (gain) loss on non-derivative financial assets (5,743,531) Series F – Purchases of non-derivative financial assets and liabilities (811,254,029) Series I – Proceeds from sale of non-derivative financial assets and liabilities 553,283,487 INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO Accrued investment income and other (1,198,463) HOLDERS OF REDEEMABLE UNITS FROM OPERATIONS Net cash provided by (used in) operating activities (254,872,862) Pinnacle Series 11,692,369 CASH FLOWS FROM FINANCING ACTIVITIES Series F 7,370 Proceeds from issue of redeemable units 279,622,831 Series I 36,646 Amounts paid on redemption of redeemable units (24,618,336) 11,736,385 Distributions to unitholders of redeemable units (34,864) DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS Net cash provided by (used in) financing activities 254,969,631 From net investment income Net increase (decrease) in cash 96,769 Pinnacle Series (3,966,484) Cash (bank overdraft), beginning of period – Series F (3,457) CASH (BANK OVERDRAFT), END OF PERIOD 96,769 Series I (36,646) (1) From net realized gains on investments Interest paid 756 (1) Pinnacle Series (1,320,845) Interest received, net of withholding taxes 3,237,880 (1) Series F (2,565) Dividends received, net of withholding taxes 591 Series I (19,533) (1) Classified as operating items. (5,349,530) REDEEMABLE UNIT TRANSACTIONS Proceeds from issue Pinnacle Series 275,442,367 Series F 501,951 Series I 4,014,534 Reinvested distributions Pinnacle Series 5,275,657 Series F 2,363 Series I 36,646 Payments on redemption Pinnacle Series (24,548,859) Series I (163,000) 260,561,659 INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS Pinnacle Series 262,574,205 Series F 505,662 Series I 3,868,647 266,948,514 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS, END OF PERIOD Pinnacle Series 262,574,205 Series F 505,662 Series I 3,868,647 266,948,514 BOND FUNDS The accompanying notes are an integral part of these financial statements. Portfolio Adviser: Fiera Capital Corporation Scotia Private Canadian Core Bond Pool (continued) 5 SCHEDULE OF INVESTMENT PORTFOLIO As at December 31, 2020 Face Average Carrying Face Average Carrying Issuer Value ($) Cost ($) Value ($) Issuer Value ($) Cost ($) Value ($) BONDS AND DEBENTURES – 99.3% BONDS AND DEBENTURES (cont'd) Corporate Bonds – 49.0% Corporate Bonds (cont'd) 407 International Inc. (Callable) 2.84% Canadian Western Bank 1.57% Sep 14, 2023 657,000 663,948 668,446 Mar 07, 2050 50,000 49,930 52,863 Canadian Western Bank 2.74% Jun 16, 2022 485,000 489,220 499,968 407 International Inc. (Callable) 3.30% Canadian Western Bank 2.88% Mar 01, 2021 175,000 176,834 175,703 Mar 27, 2045 335,000 361,050 379,586 Central 1 Credit Union (Callable) 3.06% Access Justice Durham Ltd. 5.02% Aug 31, 2039 750,460 945,828 952,607 Oct 14, 2026 552,000 558,950 559,272 Aeroports de Montreal (Callable) 3.03% Central 1 Credit Union 2.58% Dec 06, 2023 653,000 649,750 684,153 Apr 21, 2050 511,000 510,999 563,804 Chip Mortgage Trust 1.74% Dec 15, 2045 271,000 271,000 273,162 AltaGas Ltd. (Callable) 2.08% May 30, 2028 645,000 644,999 654,821 Choice Properties Real Estate Investment Trust AltaGas Ltd. (Callable) 2.16% Jun 10, 2025 695,000 694,999 722,618 (Callable) 2.98% Mar 04, 2030 125,000 126,108 133,206 AltaGas Ltd. (Callable) 4.12% Apr 07, 2026 415,000 444,245 468,734 Choice Properties Real Estate Investment Trust AltaGas Ltd. 2.61% Dec 16, 2022 169,000 171,093 175,188 (Callable) 3.01% Mar 21, 2022 100,000 98,895 102,733 AltaLink L.P. (Callable) 4.09% Jun 30, 2045 185,000 232,328 238,142 Choice Properties Real Estate Investment Trust AT&T Inc. (Callable) 2.85% May 25, 2024 612,000 624,878 649,342 (Callable) 3.20% Mar 07, 2023 500,000 511,110 524,410 AT&T Inc. (Callable) 4.00% Nov 25, 2025 500,000 541,274 564,215 Choice Properties Real Estate Investment Trust Bank of America Corporation (Callable) 2.60% (Callable) 3.55% Jan 10, 2025 115,000 121,378 125,190 Mar 15, 2023 100,000 101,795 102,498 Choice Properties Real Estate Investment Trust Bank of America Corporation (Callable) 2.93% (Callable) 4.06% Nov 24, 2025 750,000 797,888 840,017 Apr 25, 2025 120,000 124,146 127,614 Choice Properties Real Estate Investment Trust Bank of America Corporation (Callable) 3.41% (Callable) 4.18% Mar 08, 2028 550,000 590,700 633,930 Sep 20, 2025 1,765,000 1,849,445 1,916,555 Citigroup Inc.