Scotia Private Pools®
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675584_004-Pinnacle ARCvr Eng9_007409-Pinnacle ARCvr Eng.qx10 15/03/2019 00:54 Page 1 ® Scotia Private Pools and Pinnacle Portfolios For more information about Scotia Private Pools ® and Pinnacle Portfolios: Annual Report visit: www.scotiabank.com/scotiaprivatepools December 31, 2018 www.scotiabank.com/pinnacleportfolios Money Market Fund call: Scotia Private Short Term Income Pool 1-800-268-9269 (English) Bond Funds Scotia Private Income Pool 1-800-387-5004 (French) Scotia Private High Yield Income Pool Scotia Private American Core-Plus Bond Pool Scotia Private Global High Yield Pool write: Balanced Fund 1832 Asset Management L.P. Scotia Private Strategic Balanced Pool 1 Adelaide Street East Canadian Equity Funds 28th Floor Scotia Private Canadian Value Pool Scotia Private Canadian Mid Cap Pool Toronto, Ontario Scotia Private Canadian Growth Pool M5C 2V9 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 ® Registered trademark of The Bank of Nova Scotia, used under licence. SM54D 9098E-1 (12/18) Table Financial Statements 1 Money Market Fund of Contents 3 Scotia Private Short Term Income Pool Bond Funds 7 Scotia Private Income Pool 12 Scotia Private High Yield Income Pool 20 Scotia Private American Core-Plus Bond Pool 30 Scotia Private Global High Yield Pool Balanced Fund 38 Scotia Private Strategic Balanced Pool Canadian Equity Funds 44 Scotia Private Canadian Value Pool 49 Scotia Private Canadian Mid Cap Pool 54 Scotia Private Canadian Growth Pool 59 Scotia Private Canadian Small Cap Pool Foreign Equity Funds 64 Scotia Private U.S. Value Pool 69 Scotia Private U.S. Mid Cap Value Pool 74 Scotia Private U.S. Large Cap Growth Pool 79 Scotia Private International Equity Pool 85 Scotia Private International Small to Mid Cap Value Pool 92 Scotia Private Emerging Markets Pool 98 Scotia Private Global Equity Pool 103 Scotia Private Global Infrastructure Pool 108 Scotia Private Global Real Estate Pool The Pinnacle Portfolios 113 Pinnacle Balanced Portfolio 117 Notes to the Financial Statements 130 Management’s Responsibility for Financial Reporting 131 Independent Auditor’s Report 2 Scotia Private Short Term Income Pool 3 STATEMENTS OF FINANCIAL POSITION STATEMENTS OF CHANGES IN NET ASSETS As at ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS December 31, December 31, (in dollars) 2018 2017 For the periods ended December 31 (note 1), ASSETS (in dollars) 2018 2017 Current assets Financial assets at fair value through profit or loss (note 2) NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE Non-derivative financial assets 8,619,964 5,927,249 UNITS, BEGINNING OF PERIOD Cash 300,220 67,947 Pinnacle Series 7,084,875 5,889,671 Subscriptions receivable – 1,250,000 Series F 150,976 74,115 Accrued investment income and other 462 601 7,235,851 5,963,786 8,920,646 7,245,797 INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO LIABILITIES HOLDERS OF REDEEMABLE UNITS FROM OPERATIONS Current liabilities Pinnacle Series 39,700 17,638 Redemptions payable 4,040 9,917 Series F 900 240 Distributions payable 26 29 40,600 17,878 4,066 9,946 Net assets attributable to holders of redeemable units 8,916,580 7,235,851 DISTRIBUTIONS TO HOLDERS OF REDEEMABLE UNITS From net investment income NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE Pinnacle Series (39,700) (17,637) UNITS PER SERIES Series F (900) (240) Pinnacle Series 8,855,974 7,084,875 (40,600) (17,877) Series F 60,606 150,976 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE REDEEMABLE UNIT TRANSACTIONS UNITS PER UNIT Proceeds from issue Pinnacle Series 10.00 10.00 Pinnacle Series 11,807,701 8,333,703 Series F 12,000 95,623 Series F 10.00 10.00 Reinvested distributions Pinnacle Series 39,307 17,409 Series F 900 240 STATEMENTS OF COMPREHENSIVE INCOME Payments on redemption Pinnacle Series (10,075,909) (7,155,909) For the periods ended December 31 (note 1), Series F (103,270) (19,002) (in dollars except average units) 2018 2017 1,680,729 1,272,064 INCOME INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO Interest for distribution purposes 64,466 46,865 HOLDERS OF REDEEMABLE UNITS Pinnacle Series 1,771,099 1,195,204 Net gain (loss) on financial assets and liabilities at fair value through Series F (90,370) 76,861 profit or loss 64,466 46,865 Securities lending (note 11) – 17 1,680,729 1,272,065 Total income (loss), net 64,466 46,882 NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE EXPENSES UNITS, END OF PERIOD Management fees (note 5) 537 415 Pinnacle Series 8,855,974 7,084,875 Independent Review Committee fees 1,249 1,154 Series F 60,606 150,976 Interest expense and bank overdraft charges 141 – 8,916,580 7,235,851 Audit fees 11,157 8,368 Custodian fees 3,123 1,643 Filing fees 15,797 16,268 Legal fees 1 14 STATEMENTS OF CASH FLOWS Unitholder administration costs 3,007 41,155 Unitholder reporting costs 399 4,656 For the periods ended December 31 (note 1), Harmonized Sales Tax/Goods and Services Tax 3,960 5,569 (in dollars) 2018 2017 Total expenses 39,371 79,242 Expenses absorbed by the Manager (15,503) (50,238) CASH FLOWS FROM OPERATING ACTIVITIES Net expenses 23,866 29,004 Increase (decrease) in net assets attributable to holders of redeemable units 40,600 17,878 Increase (decrease) in net assets attributable to holders of redeemable Adjustments for: units from operations 40,600 17,878 Purchases of non-derivative financial assets and liabilities (31,452,327) (24,511,732) Proceeds from sale of non-derivative financial assets and INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERS liabilities 28,759,612 24,419,391 OF REDEEMABLE UNITS FROM OPERATIONS PER SERIES Accrued investment income and other 139 (350) Pinnacle Series 39,700 17,638 Accrued expenses and other payables – (272) Series F 900 240 Net cash provided by (used in) operating activities (2,651,976) (75,085) INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS FROM OPERATIONS PER UNIT† CASH FLOWS FROM FINANCING ACTIVITIES Pinnacle Series 0.10 0.03 Proceeds from issue of redeemable units 13,069,701 7,183,322 Series F 0.08 0.03 Amounts paid on redemption of redeemable units (10,185,055) (7,166,334) Distributions to unitholders of redeemable units (396) (220) WEIGHTED AVERAGE NUMBER OF UNITS PER SERIES Pinnacle Series 413,837 510,570 Net cash provided by (used in) financing activities 2,884,250 16,768 Series F 10,774 8,251 Net increase (decrease) in cash 232,273 (58,317) Cash (bank overdraft), beginning of period 67,947 126,264 † The increase (decrease) in net assets attributable to holders of redeemable units from CASH (BANK OVERDRAFT), END OF PERIOD 300,220 67,947 operations per unit is calculated by dividing the increase (decrease) in net assets Interest paid(1) 141 – attributable to holders of redeemable units from operations per series by the weighted MONEY MARKET FUND average number of units per series. Interest received, net of withholding taxes(1) 65,942 47,215 (1) Classified as operating items. The accompanying notes are an integral part of the financial statements. Portfolio Adviser: 1832 Asset Management L.P. Scotia Private Short Term Income Pool (Continued) 4 SCHEDULE OF INVESTMENT PORTFOLIO As at December 31, 2018 Face Average Carrying Issuer Value ($) Cost ($) Value ($) Short Term Bonds – 5.6% Bank of Montreal (Floating Rate) 1.60% Apr 11, 2019 125,000 125,396 125,803 BMW Canada Inc. (Floating Rate) 2.35% Jun 14, 2019 50,000 50,154 50,194 Genesis Trust II 2.43% May 15, 2019 100,000 100,107 100,369 HSBC Bank Canada (Floating Rate) 2.11% Jul 10, 2019 50,000 50,017 50,082 Royal Bank of Canada (Floating Rate) 1.94% Aug 01, 2019 125,000 125,000 125,219 Wells Fargo Canada Corporation 2.94% Jul 25, 2019 50,000 50,150 50,759 500,824 502,426 Bankers’ Acceptances – 8.6% Canadian Imperial Bank of Commerce 0.00% Aug 29, 2019 75,000 73,358 73,914 Canadian Imperial Bank of Commerce 0.00% May 13, 2019 300,000 297,568 297,586 National Bank of Canada 0.00% Feb 25, 2019 100,000 99,417 99,681 Royal Bank of Canada 0.00% Apr 01, 2019 200,000 198,890 198,902 Toronto-Dominion Bank, The 0.00% Feb 01, 2019 100,000 99,677 99,821 768,910 769,904 Bearers’ Deposit Notes – 0.6% Fédération des caisses Desjardins du Québec 0.00% Jan 14, 2019 50,000 49,842 49,964 Commercial Paper – 8.4% FortisBC Energy Inc. 0.00% Mar 27, 2019 200,000 198,950 198,962 Greater Toronto Airports Authority 0.00% Jan 11, 2019 100,000 99,823 99,941 Honda Canada Finance Inc. 0.00% May 23, 2019 50,000 49,465 49,556 Nestlé Capital Canada Ltd. 0.00% Feb 19, 2019 100,000 99,574 99,718 Nova Scotia Power Inc. 0.00% Jan 09, 2019 50,000 49,892 49,977 Omers Finance Trust 0.00% Feb 20, 2019 50,000 49,734 49,855 Suncor Energy Inc. 0.00% Mar 29, 2019 200,000 198,882 198,895 746,320 746,904 Promissory Notes – 27.9% Province of Alberta 0.00% Mar 20, 2019 500,000 497,460 497,958 Province of British Columbia 0.00% Feb 12, 2019 300,000 298,986 299,364 Province of British Columbia 0.00% Mar 25, 2019 700,000 696,252 696,959 Province of Nova Scotia 0.00% Feb 26, 2019 250,000 248,795 249,267 Province of Saskatchewan 0.00% Feb 13, 2019 150,000 149,177 149,663 Province of Saskatchewan 1.93% Apr 09, 2019 600,000 596,874 596,906 2,487,544 2,490,117 Treasury Bills – 45.5% Government