The Renaissance Advisor

AdvisorThe Renaissance

QUARTERLY FUND PROFILES / PRACTICE MANAGEMENT / OUTLOOK / OPINION Q1 – MAR. 31, 2013

ALSO INSIDE:

Communicate to Clients in 3-Dimensions!

Get Ready to Ride

2013 Global Infrastructure ReportStable Road Ahead

TO DEFENDOUR EMPIRE

LET’S BUILD ASMALL FENCE

, .

GREAT LEADERS MAKE STRONGER PLANS: TODAY’S INCOME DECISION.

It’s a tough decision, but it’s time to make it. We have reached a fork in the road. The flight to “safer” assets in the face of volatile markets may have worked until now, but record low yields are proving to be a threatening force. Now is the time to plan for the future.

Renaissance is committed to going further for you. We have actionable tools, solutions and key support to make today’s income decision easier.

New and updated Income Decision tools now available.

Visit incomedecision.ca or call 1-888-888-FUND (3863).

7th Century BC China decides to build a Great Wall.

TODAY’S INCOME SOLUTIONS

Optimal Income Portfolio

Short-TermIncome Fund

Millennium HighIncome Fund

Optimal Inflation Opportunities Portfolio(inflation mitigation)

INCOME DECISION TOOLKIT

®Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc. Commissions, trailing commissions, management fees and expenses

all may be associated with mutual fund investments. Please read the Renaissance Investments family of funds simplified prospectus before investing.

Tax and Estate 3Americans in Canada: Tax Problems Grow

Economic Outlook 4North America: Soft Patch

Back of the Napkin 6Communicating in 3-Dimensions!

2013 Global Infrastructure Report 8

Solution Highlight 12Access the Infrastructure Advantage Now

Thanks to Our Supporters 13Portfolio Design is Critical

Get Ready to Ride 14

Brain Calisthenics 16

In this issue

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RENAISSANCE INVESTMENTS

Letter from the National Sales Manager

Welcome to Spring. This is the time of year where hope comes to the forefront for all of us in our personal lives and business ambitions. The warmweather, green grass and blue water make the world seem a better place.

Thank goodness for Spring, as often times we need it. The Winter extends for what seems like forever (although statistics show that it usually follows the same patterns year-in and year-out) and we are ready for vacation.

Now is when we make personal plans and look forward to family and friends getting together. Whatever is going on in our business and personallives, the outlook is a little better this time of year. We are feeling good.

So, if this is what we as advisors are thinking about, is anything different with our clients? Absolutely not. It is simply human nature that they arefeeling the same kind of hope and optimism. So perhaps this is the time of year – after RSP season, after tax season, after financial planning forthe new year – that we make sure we plan events with our clients and talk to them about everything non-business.

Help clients with their travel ideas, with baseball equipment for their kids, a new skateboard park fundraiser or a seniors program for the Summer.Add to their optimism this season by reassuring them about their financial future and listening to their excitement for the Spring and Summer andtheir personal plans. Your client relationships will be solidified and you will learn much more about the human side of the people you work with. Be sure you take the time to be personal with all of your clientele this Spring. Perhaps do the same with your teams.

Although we can have the ability to convert interest income to capital gain taken from us and our clients, Spring and the hope it brings will returnevery year. Guaranteed.

As always, we will strive to earn your business and become your trusted business partner. Any comments or ideas that you have, please feel freeto call me. Happy Spring!

Sincerely,

Dave WahlNational Sales ManagerRenaissance Investments416-943-6959

Spring’s Hope Can Nurture Client Relationships

RENAISSANCE INVESTMENTS 3

www.renaissanceinvestments.ca/en/jamie_golombek/

For the estimated one million U.S. citizens living in Canada, owning Canadianmutual funds can cause a tax headache.

The United States is the only country that requires its citizens to file a tax return and report their worldwide income, no matter where in the world theymight live or how many other citizenships they might hold. This differs frommost other countries, like Canada, which bases its taxation system primarilyon residency.

The problem with Canadian mutual funds for U.S. tax filers is that under U.S.tax law, they are considered to be Passive Foreign Investment Companies(PFICs) and as such, are governed by draconian U.S. tax rules and convolutedand complex annual reporting.

For example, under the PFIC rules, investors who dispose of Canadian mutualfunds or who receive certain types of distributions from these funds are taxedon their U.S. returns at the rates that apply to earned income as opposed tothe preferential tax rates that apply to capital gains. In addition, dependingon the timing of the distributions and/or dispositions, punitive interestcharges can also be imposed.

The PFIC rules themselves are extremely complex and require specialized U.S. tax reporting including the filing of Form 8621, “Information Return by aShareholder of a Passive Foreign Investment Company” for each PFIC owned.The form is three pages long and has six parts. According to the form’s instructions, the estimated time to properly comply with the PFIC rules is over31 hours, which includes: 11 hours to learn about the law or form, 15 hours or recordkeeping and just over 20 hours to prepare and send in the form. And that’s just for one PFIC.

It’s therefore no wonder U.S. tax preparers are discouraging their clients fromowning Canadian mutual funds in the first place, since it’s challenging forthem to recoup the fees they would have to charge their clients for the professional time involved to do the recordkeeping and fill out the forms necessary to comply with the U.S. laws.

Recently, the Investment Funds Institute of Canada (IFIC) which represents a large segment of Canada’s investment funds industry, called on the U.S.government to exclude Canadian mutual funds from the PFIC rules.

Its submission was made to two Congressional committees: the FinancialServices Working Group Committee on Ways & Means and the InternationalTax Reform Working Group.

In its submission, IFIC suggested that an administrative solution could be negotiated to exclude Canadian mutual funds from the PFIC Rules through“exchanging letters of understanding” between the Canada Revenue Agencyand the Internal Revenue Service.

As IFIC president and CEO Joanne De Laurentiis stated, “There is sufficientsimilarity between the treatment (for income tax purposes) of mutual funds in Canada and the U.S. to support the exclusion of Canadian mutual fundsfrom the PFIC rules.”

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.

Americans in Canada:Tax Problems Grow

www.advisor.ca/togoPodcast > 2013 Budget: Not Much Good Tax News

4 RENAISSANCE INVESTMENTS

North America: Soft Patch

ECONOMIC OUTLOOK

It appears that the key focus in the market now is on the health of the U.S. recovery. While things are not as bad as suggested by some of the headlinenumbers, we are entering a period in which the market might have to lowerexpectations regarding U.S. growth. All recent indicators have shown consistent signs of weakness. The manufacturing sector showed a weaker-than-expected reading while consumer confidence is softening a bit. Add tothat the disappointing labour market numbers of late and the picture that isemerging is consistent with our view that the strong growth in the first quarter will give way to a weaker second quarter.

While it was clear that the strong showing of the first quarter is unsustainable,the question is to what extent the current softening in U.S. activity is temporaryor a sign of future activity. At this point it is very reasonable to assume thatthe coming two quarters might see economic growth of less than 2% – not adisaster but clearly weaker than the estimated 3.4% growth in the first quarter.

In Canada, things are starting to make more sense. The 54,500 drop in payrollemployment in March was simply a reversal of the unexplainable 50,700 increase we saw in February. Beyond the monthly volatility, we have beencreating, on average, only 10,000 new jobs a month over the past six months.

What’s worrying is that despite the relatively strong U.S. economy in the firstquarter, Canadian trade has disappointed in the first two months of the yearwith the trade deficit actually widening. Given that the U.S. economy is slowingthis means that the trade performance will, in fact, worsen from this point.

As for the Canadian consumer, with the job market slowing down, real disposable income per capita actually fell in the last six months of 2012. Nosurprise then that growth in real retail sales in Canada is in negative territory.While better auto sales might have worked to lift activity in January, thisremedy might be short-lived with auto sales already back to their pre-recessionlevels. It’s difficult to see what will turn things around in the near future.Wage increases since the beginning of the year were uninspiring at best,while the labour market is widely expected to come down from the cloudswith job losses in the public sector and construction leading the way.

Dismal income growth in Canada also means that the widely watched debt-to-income ratio will continue to set record highs in the coming quarters. Real

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Stagnating Income – Real household disposable income per capita

Source: Statistics Canada, CIBC.

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household credit is now rising slower than during the 2007 recession andwith the exception of the near-recessionary period of 1995-96, it is now risingat the slowest pace seen in any non-recessionary period over the past threedecades. Simply put, short of a major shock to the system, it is unrealistic toexpect household credit expansion to decelerate further to meet the weakperformance of income growth. At this point, the rise in the debt-to-incomeratio is no longer about debt, it’s all about income.

What does all this mean for the market? Despite the gross underperformanceof the TSX versus the S&P 500, many Canadian stocks have done quite well.Of the 10 major sectors in the index, one has essentially kept pace with theS&P 500 and three (health care, information technology and industrials) havenicely outpaced it. The lagging TSX pace owes to sectors that, unfortunately,include some of the most heavily weighted in the basket.

Resources are not surprisingly part of the problem, facing a global economythat has yet to gather speed. Although utilities stocks have ceded a bit ofground, the heaviest casualty has been materials stocks, plagued by poor operating performance in mining and disappointments in commodity prices.U.S. materials stocks also trail the S&P 500, but are still in positive territory.

Bay Street’s energy stocks, while ahead on the year, have underperformedtheir Wall Street counterparts, hurt by concerns over future pipeline capacityand competition from growing U.S. production.

The other major divergence has been in financials. U.S. banking stocks arebenefiting from revived housing and consumer demand, and the perceptionthat the legacy of the financial crisis is fading into the background. In contrast,Canada’s financials, while still gaining some attraction as dividend payers areseen as past their glory days of domestic credit demand, and therefore fatedto tamer earnings growth.

What could turn the tables? Global growth. An overweight position in energy and industrial materials would be to the TSX’s advantage if, as we expect, 2014 brings better growth in the U.S. and Asia, and at least the endof recession in Europe. Gold might not get a similar lift on the commodityprice front, and will need to prove to investors that they can do better in containing costs and meeting production targets.

For now, with interest rates so low, TSX stocks could still outperform fixed income. With 2013 economic news still muted, investors will be more relianton dividends than capital gains to deliver near-term performance. But latethis year, as eyes turn to improved global growth prospects in 2014, the tables could turn, allowing Toronto to take the lead from New York in terms of the pace of improvement.

www.renaissanceinvestments.ca/en/economy/

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TSX S&P 500

Why is the TSX Sucking Wind? – Year-to-date Appreciation (%)

Source: CIBC.

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.

www.advisor.ca/togoPodcast > Canadian Economy is in Transition


Communicating in 3-Dimensions!

BACK OF THE NAPKIN

The ability to connect with clients and prospects is criticalto the success of an advisory practice. But sometimes weget so stuck in our preferred ways of communicating, thatwe run the risk of missing out on some very big opportunities.

Consider this for a moment… We all experience the world through our five senses.

Everything we know, learn and feel is the result of information that comes tous through one or more of those senses. We either see it, hear it, feel it, smellit or taste it – and we do so through the following sensory-based channels: Visual (sight), Auditory (hearing), Kinesthetic (touch)… and to a lesser degree… Olfactory (smell) and Gustatory (taste).

Although smell and taste may contribute greatly to our experience under certain conditions, it’s really the first three channels of VAK that stand out asthe primary modalities that will dominate and feed our experience of life.

The VAK(OG) are also sometimes called “representational systems” becausethey are the mechanisms that carry information from the outside world to ourbrain. Ultimately, as human beings, we simply try to make sense of the incominginformation by rapidly interpreting the data, and then applying our own personal

meanings to each experience. Naturally, the meanings we attach to a particularevent will largely depend on our unique set of values and beliefs, but will alsobe heavily influenced by our past experiences of a similar nature.

So how can this basic understanding help us in the context of investor communication?

The reality is, we are all wired a little differently and we absorb and processinformation in different ways. Some people are primarily “visual” learners…some are “auditory” learners… while still others learn best by “doing” or experiencing “kinesthetically.” In the absence of a controlled scientific study, it would be difficult to substantiate a population breakdown between the threelearning styles. But simply knowing they exist provides us with some verypowerful information.

From a functional standpoint, a “visually-dominant” learner will typically respondbest when presented with pictures, charts, graphs and other visuals. In contrast,an “auditory” learner will need few (if any) graphics, but may be captivated bya verbal description or explanation. The “kinesthetic” learner will seek to understand a concept by touching it, feeling it, or sensing it on some level.

Have you ever come away from a meeting with a client or prospect and wondered what went wrong? Perhaps you felt that you did a fantastic job ofdelivering a powerful message, but were all too aware that you were simplynot getting through to your audience. At the time, you may have even felt thatit was as though you were speaking a different language. You may, in fact,have been communicating in a “foreign language” (for them) given theirunique internal wiring.

Imagine what happens when we deliver an auditory (or purely verbal) recom-mendation to an ultra-visual client. Even if we mindfully employ descriptive anecdotes and a poetic choice of words, our visual listener will spend most of their time desperately trying to make “pictures” of what we’re saying.

Now, I’m not suggesting that a mismatch of learning styles should be viewedas a deal-breaker by our clients, but I do believe we can take some importantsteps to ensure that we are consistently creating and delivering messages inthe most resourceful way.

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It would be extremely helpful if we knew an investor’s preferred representationalsystem in advance, so we could simply tailor our messages accordingly. Inpractice, however, we will seldom be given the chance to profile and classifyour audience ahead of time. So, what’s the solution?

Learn to Communicate in 3-Dimensions:

By following this simple step-by-step process, you will be able to create messagesthat possess a strong appeal for ANY audience – regardless of their preferredlearning style.

Step 1: Identify your own dominant learning style first

By this point you may have already determined your most dominant learningstyle. If not, simply ask yourself whether you learn best visually, auditorily, or kinesthetically. Think back to your days in school, or how you prefer to be entertained, or how you remember information best. You may discover thatthere’s just one clear winner from the three sensory choices, or perhaps youmay even find some degree of balance between two or more. Either way, simply make note of your discovery.

Step 2: Determine how your own preference may be limiting your effectiveness

Now that you’ve gained some clarity around your preferred representationalsystem(s), ask yourself how this personal bias may be influencing the way youcommunicate with your clients and prospects. If you happen to be geared moretoward auditory, do you find yourself doing a lot of talking in your meetings,but showing very few visuals? As a visual, do you try to convey your thoughtsusing spreadsheets and charts, while offering little in the way of explanation?Or, maybe you prefer to tell emotional stories or provide hands-on demonstrationsto convey your ideas kinesthetically, while neglecting other important mediums.

Regardless of where your bias may be, we now know that a percentage ofyour audience will not be able to comprehend, retain, or recall your information in the most optimal way… for them.

Step 3: Construct and deliver all future messages in 3-Dimensions! (VAK)

You have a tremendous opportunity to create ultra-rich, three-dimensionalmessages so that your clients can align themselves with the dimension thatsuits them best. Here’s a simplified way to think about this process… Your ultimate goal is to employ the full suite of VAK by: showing them, telling them,and involving them.

When constructing your investor-facing content, start by compiling and incorporating a collection of attention-grabbing visual aids, graphics, pictures,diagrams and charts. Each of your chosen pieces should tell a compelling story,or make a powerful statement, without much need for verbal assistance.

Now create the auditory “scripts” that will explain, describe and expand uponyour visuals. The key here is to describe the graphics as effectively as youwould need to, if the graphics were not even being shown during the meeting.

In other words, your verbal descriptions should essentially stand alone – withor without the visual aids being present. Remember, your auditory client willalso be listening closely to your volume, pitch and tone, so your delivery willbe crucial.

Finally, consider adding a kinesthetic component to your message by incorporating an interactive demonstration on your computer, handing somematerials to your client, or by asking them how this idea “feels” to them so far.

Putting it all together:

By understanding and respecting our different pathways to learning, we’re able to approach our own communication model from a fresh perspective. And, with a simple strategic change to our messaging procedure, we can begin to create a richer and more captivating experience for our clients and prospects.

www.renaissanceinvestments.ca/en/practicemanagement/

VISUAL AUDITORY KINESTHETIC

Slides Verbal Descriptions Physical Object

Charts Explanations Demonstration

Graphs Stories Hands-on Training

Spreadsheets Metaphors Interactive Session

Pictures Life Lessons Role Play

Drawings Audio CDs Constructing

Videos MP3s Feelings-based

Contact your Renaissance representative to gain access toclient-facing VAK tools around “Today’s Income Decision” and other topics.

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.

www.advisor.ca/togoPodcast > A Checkup for Your Practice

INFRASTRUCTURE 2013 GLOBAL

Steady income, strong diversification, stable growth and an advantage in a rising inflation environment.

Global infrastructure is tailor-made for today’s long-term investor.

8 RENAISSANCE INVESTMENTS 8 RENAISSANCE INVESTMENTS


No matter what twists and turns markets and economies take, investors cangain an advantage by diversifying their portfolio into the global infrastructurespace. Infrastructure, which now comprises about six percent of CanadaPension Plan, is an asset class lowly correlated to Canada’s benchmark S&P/TSX Composite Index, and other staples of Canadians’ portfolios.

For insight on what is driving this unique asset class in 2013 and beyond, we spokewith Nick Langley, Director & Senior Portfolio Manager with RARE InfrastructureLimited (RARE). Based in Sydney, Australia, RARE is one of the world’s most prolific global infrastructure firms focused solely on listed infrastructure.

A Global Road for Cautious Investors

Many Canadians are risk averse and hesitant to invest outside our borders,and infrastructure offers an excellent opportunity for global exposure withless volatility, says Langley. “It provides better capital protection in fallingmarkets and a reasonable share of the upside in rising markets.” With the predictable income distributions and natural inflation hedge from infrastructure companies, RARE targets long-term stable returns. “Overall, returns are attractive compared with global equity indices and comparisons,” he says.

RARE’S TOP 3 REGIONSDRIVING INFRASTRUCTURE GROWTH

North America Can quickly move through the recession and back into growth mode,spurred by extensive help from the U.S. Federal Reserve.

Asia (excluding China and Japan)Strong population and income growth, alongside stable governments,have provided a haven for the liquidity generated in developed markets.

Central and South AmericaSame as Asia above, although process in Central and South America’s is a little longer, with some governments, such as Brazil’s tinkering withregulation to try and capture a greater proportion of the wealth.

RARE’S TOP 3 SECTORSDRIVING INFRASTRUCTURE GROWTH

U.S. RailExposed and leveraged to rising GDP growth in the U.S. as U.S. rail firms move goods around the economy.

U.S. Wireless TowersIndirectly exposed to growth in smartphone subscribers and wireless data downloads.

Global PortsPoised to benefit from increased global and intra-regional trade, especially ports with emerging markets exposure.

REPORTFind out why today’s infrastructure opportunity is just as muchabout towers to service our insatiable appetite for mobilecommunication, as it is about essential utilities.


U.S. Wireless Towers – Tech Infrastructure

Not traditionally thought of as an infrastructure sector, U.S. wireless towershave many features that make the space particularly attractive right now,says Langley. “Consumers have identified handheld wireless smartphonesand tablets as their preferred operating devices going forward. The increasedfunctionality of these devices requires greater wireless coverage and bandwidth.U.S. wireless carrier providers must now upgrade their networks, which requires new equipment to be placed on the sites of the tower operators. Carrier providers are now in the process of rolling out the next generation innetworks known as Fourth Generation (4G) or Long-Term Evolution, and thisadditional equipment means higher revenues for tower companies thatcharge the wireless providers on the size and weight of the equipment they place on the tower.”

“Provisions for establishing new tower sites are very limited, putting a premiumon existing tower space and providing a quasi-monopolistic market for the existing operators. The opportunity for RARE is, as the rollout of 4G will takesome time, the wider market has not yet identified the opportunity that thetower market provides within the broader technology thematic. Finally, anumber of the tower companies are also in the process of changing theirstructures to that of a real estate investment trust – enabling them to eliminatecorporate tax liabilities and pushing their dividend yields up as they are thenrequired to distribute 90 percent of what would be taxable income to investors.”

A Natural Inflation Hedge

With utility rates, tolls or project costs that increase with inflation, infrastructureis a practical investment in times of rising prices. Langley says that most ofRARE’s portfolio holdings have direct or indirect links to inflation. “Utilities inthe U.K., Australia and South America (currently 21 percent) have their pricesadjusted by inflation each year and, in addition, their asset bases are adjustedto ensure their returns are protected from increased inflation. Many of RARE’stoll-road exposures (currently 10 percent) have tolls adjusted by inflation quarterly or annually. For example, Transurban is an international toll-road developer and its key asset in Australia has a quarterly adjustment of thelarger of inflation or one percent (and therefore has a minimum of four percentper annum price increases).”

“North American utilities (currently 20 percent of the portfolio) have an indirectlink to inflation, in that state-based regulators provide a target nominal returnon equity (invested in their asset bases), therefore, as inflation increases sodo their return on equity targets. We call it an indirect exposure because theregulatory “resets” take place on an ad-hoc basis, and so it takes a year ormore for these adjustments to be made and hence the companies’ have alagged inflation protection.”

“As such, the returns for over half the portfolio have medium to strong links to inflation over time. A further 23 percent (airports, satellite communicationsand some rail assets) have a portion of their assets repriced by inflation each year and the remaining 19 percent (ports, U.S. rail and U.S. towers inparticular) have negotiated pricing that is referenced to inflation or nominalreturn targets over time.”

Rising Interest Rate Protection

Langley says that RARE considers the interest rate exposure in terms of realrates plus inflation. “The portions of the portfolio protected from real ratesare generally the utilities. They are protected in that their return targets are“reset” on regular bases (between four- and eight-year cycles for the U.K.,Australia and Brazil) or on an ad-hoc basis (for U.S. utilities).”

“The portfolio is exposed to the impact of real rates on a number of infrastructurestocks (toll roads, airports, ports, rail companies, and other “GDP leveraged”companies) that do not have interest rate pass-through mechanisms in theirconcession contracts. If real rates begin to rise as a result of recovery in theglobal economy, then these companies are best positioned to benefit fromtheir exposure to GDP growth. It is worth noting that many of these companieshave inflation protection.”

“As a result, if the increase in interest rates occurs as a result of an increasein inflation then the majority of the portfolio is protected. If the increase arisesfrom movements in real rates then approximately half of the portfolio is exposed,however, it would benefit from the improvement in global GDP growth.”

Steady Income

Langley says that RARE's portfolio generally yields in the high three percentto low six percent range throughout the economic cycle.

“The wider market has not yet identified the opportunity that the towermarket provides within the broader technology thematic.”Nick Langley, Director & Senior Portfolio Manager, RARE Infrastructure

“RARE’s portfolio companies have not cut dividends during the period that they’ve been in the portfolio.”

Nick Langley, Director & Senior Portfolio Manager, RARE Infrastructure

“Early in the cycle, as the economy is coming out of recession (the point webelieve we are at now) is generally the low point for the dividend yield, becausethe portfolio is weighted toward infrastructure companies that have a highercapital growth component to their total return. These companies also havethe strongest dividend growth profiles as earnings recover from the recession.”Emphasizes Langley, “RARE’s portfolio companies have not cut dividends during the period that they’ve been in the portfolio. Income is a critical portion of the long-term returns RARE expects from infrastructure and, assuch, companies are assessed for dividend stability and growth potential.”

Infrastructure Complements “Today’s Income Decision”

In today’s low-yield environment, investors seeking additional income and steady growth are wise to consider broadening their portfolio outside of Canada to help meet their investment goals.

Use the New Income Decision Poster as a conversation starter.Show clients why it’s time to lookbeyond traditional income for theadditional yield they need.

Look for yours in this magazine

Video > Global Infrastructure:Stable Road Ahead

Podcast > Infrastructure:Global Growth Stocks toDrive 2013 Markets


See the next page for the Renaissance solutions that provide your clients access to the global infrastructure advantage.

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MSCI World Index

A Better Diversifier than Global EquitiesCorrelation with S&P/TSX Composite Index

A Less Volatile Global Investment5 Year Standard Deviation (as at March 31, 2013)

Source: Bloomberg, CIBC Asset Management Source: Bloomberg, CIBC Asset Management


Access the Infrastructure Advantage Now

SOLUTION HIGHLIGHT

STEP 1Choose to reduceportfolio risk and enhance returns byadding infrastructure

STEP 2Select from two stellar solutions

STEP 3Leave it to the experts

• 100% focus on listed global infrastructure (infrastructure specialists managing funds, not fund managers managing infrastructure)

• Over 70 years combined infrastructure experience• Seek to replicate risk-return profile of unlisted infrastructure• Active management to adjust portfolio ahead of business cycles

Z For more information on how to put these solutions to work for your clients, please speak to your Renaissance Investments representative.

1 Source: Morningstar, for the period specified ending March 31, 2013 for Class A units of the Funds. ©2013 Morningstar Research Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or itscontent providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of thisinformation. Past performance is no guarantee of future results. Quartile rankings are determined by Morningstar Research Inc., an independent research firm. Quartile rankings are comparisons of the performance of a fund to otherfunds in a particular category and are subject to change monthly. 2 Renaissance Optimal Income Portfolio inception date November 13, 2007. Renaissance Global Infrastructure Fund inception date October 20, 2010.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the Renaissance Investments family of funds simplified prospectus before investing. Mutual fundsare not guaranteed, their values change frequently and past performance may not be repeated.

Morningstar Rating 1 yr 2 yr 3 yr 5 yr Since Inception2

Diversified Access:Renaissance Optimal Income Portfolio �� 8.2% 6.0% 7.4% 4.7% 4.3%

Quartile1 1 1 1 1 n/a

Pure Play Access:Renaissance Global Infrastructure Fund �� 18.2% 10.2% 11.1% 4.2% 3.3%

Quartile1 1 1 1 1 n/a

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9.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0%

5.9%

5.7%

5.5%

5.3%

5.1%

4.9%

4.7%

4.5%

+30% Infrastructure/70% S&P/TSX Composite Index

+20% Infrastructure /80% S&P/TSX Composite Index

100% S&P/TSX Composite Index

MoreReturn

Less Risk

Source: Morningstar Direct as at December 31, 2012.

Performance as at March 31, 2013. Source: Morningstar Direct.


Portfolio Design is Critical

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?

The private client investment business continues to fascinate me after all theseyears in the business for two reasons. It allows me to support interesting peoplewith their varied goals in life. Each client has a unique personal situation, whichoffers its own challenges and opportunities to be researched and presented in a way that is clear to the client. Also, the investment environment is alwaysevolving. Some solutions that were prudent at one time are no longer appropriateand there are new products and services to be learned. Boredom is never a problem!

What are you doing to combat low yield for clients?

Certainly a current challenge is that of today’s low yields. Traditional solutionsof laddered bond portfolios and high-quality government bond portfolios are nolonger adequate for many clients. There are three directions to go with this situation. Increasing capital through saving more or working longer. Alternately,investment portfolios need to use more “risk” assets. Dividend income fromstocks can be higher than yields on bonds. This is not the usual historical situation, but today, a well-designed stock portfolio can generate higher cashflow than a fixed income portfolio. However, risk must always be thoroughlydiscussed and understood. This is where portfolio design is critical and diversification is not just holding more securities, but holding non-correlatedsecurities with appropriate quality.

With talk of a “great rotation,” do you plan to allocate more assets toward equities?

Adding more equities to client portfolios is a slippery slope and one that mustbe carefully researched and presented. I use a cash flow methodology with a bottom-up portfolio design process that involves matching client expenseneeds with investment income. The current low fixed income yields have alreadytilted client portfolios towards more equity holdings than in the past and my

balanced portfolios have already moved to hold more equities. In this move,selection of the equities is a key consideration to maintain the overall risk at a level appropriate for the clients.

What are your thoughts on including infrastructure as an asset classin your client portfolios?

Infrastructure has become a key holding in client portfolios as the overall equityposition has increased, for two main reasons: stable cash flows and low correlationwith other asset classes. Research in this asset class and implementation selection is as critical as everywhere else. Looking at index performance andcorrelation statistics is only relevant if they can be replicated. Finding a fundwhere infrastructure investments are in hard assets, as well as tradable securities,is important in building a truly diversified and lower-risk portfolio.

Best tip for gaining new clients:

Work with centres of influence at every opportunity, starting with your clients.

Favourite hobbies:

Sailing and music.

One item I can’t be without:

My cell phone – how did we ever survive before?

Firm: TD Wealth Private Investment Advice, Oakville ON

Years in Business: 26

Team Members: 2

Ann E. Martin, CFA

From country roads to citytrails – the signs of cycling’sgrowing popularity in Canadaare everywhere. There’s noreason you shouldn’t join in the fun this spring.



Cycling Canada reports that the number of licensed cyclists in Canada grows about 10 percent a year. In fact, a 2012 Globe and Mailarticle ran with the headline:

“Cycling is the new golf.”

There are many factors driving the popularity of cycling: boomers seeking a lower-impact activity than running; a growing media profile of the sport(Ryder Hesjedal of British Columbia won the Giro d’Italia last year); a surgein cycling-related charity events; and biking becoming a more viable optionfor commuters (bike lanes, better equipment, cost of gas).

Maybe you haven’t hopped on a bike since you were a kid. Now is a goodtime to get back in the saddle. The first thing you’re going to need is a bike,which raises several questions:

• How much will it cost? From under $100 for a used bike on eBay, toover $2,500 for a top road bike, your possible price points are endless.

• How will I use my bike?Whether you intend to enter races, ride trailsor commute to work will have a big say in the type of bike you need.

• What accessories do I need? Helmets, gloves, glasses, clothing,lights, computers – there is an endless supply of cool bike gear to spendyour money on.

Depending on your needs, there’s something to satisfy everyone. Find a reputable bike shop that can help with your selection. Remember when youbought your dream car, you took the time to ensure it was the perfect ”fit.” It’s the same with a bike. Ideally choose a frame that fits your leg length.Be sure to take a few test rides.

Awesome Accessoriesblessthisstuff.com released its top nine bicycle accessories in 2012. The list included:

• A leather bicycle wine rack that supports a bottle of vino on your frame.

• A “horn” iPhone bicycle amplifier so you can listen to your playlist on the move.

• A commuter trailer attachmentthat carries office gear and groceries.

• A no-button automatic bike lightthat senses when you’re moving,

and when it’s dark enough to turn on.

www.blessthisstuff.com

A cyclist’s perspective…

We spoke with Ed Veal, a category one road cyclist and the current Ontario CupChampion,for some practical and helpful insights. Ed is coach and owner of RealDeal Racing (www.realdealracing.ca).

How fit do you need to be to begin cycling?

“Not fit at all. Don’t wait to be whatever your idea of ‘fit’ is to begin having fun on a bike. The sooner you begin, the quicker you’ll become ‘cycling fit.’ Sweating andbeing a little winded can be quite enjoyable if you choose to embrace the feeling.”

What are some do’s and don’ts in cycling?

“Some people focus too much on training. Make sure you enjoy being outdoors and seeing the sights you might not see in a car. Travel some unfamiliar roads andexplore a bit. Biking can be so enjoyable and sometimes that is lost in the chase forspeed and fitness. I still ride for fun – jump a curb, ride through a puddle and swerveback and forth (when it is safe).”

What advice can you offer someone who wants to get involved in racing?

“For starters, ease into riding with others. Get out with a friend and practise ridingclose and drafting [advanced technique to ride inches apart in a straight line to reduce wind] with someone you trust. Then add in a second and third rider, once you are more comfortable. Take the back roads to start and then work your way on to the highway when you have more experience. There is a lot of skill involved whenriding in a pack. It does not come overnight. Make sure you work on cornering, bikehandling and riding with others before you enter any event.”

What are some of the advantages of joining a cycling group?

“There are too many to list. Some of the clubs these days are incredible and offermany different rides and activities all year. Cycling is very social, so meeting and riding with others who enjoy the same things would be my number-one reason for joining a club.”

What cycling activities or events are fun for the whole family?

“Any weekly mountain bike series would be perfect. An eight-hour event where youset up a camp and ride as much or as little as you like, and just hanging around thecamp enjoying the outdoors – this could be the ultimate family cycling activity.”

Overall, it doesn’t matter what age you are or if you’re in top shape – cycling is anactivity everyone can enjoy. You may even want to join or start a cycling group in yourcommunity. To get you on the right path, there are numerous resources on cycling –here are a few to help you get started on your journey today: www.canbike.net,www.cyclingcanada.ca, and www.tourducanada.com. Enjoy the ride!


brain calisthenics

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

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.

3 8 9 7

1 6 3

6 5 7 1

6 9 5 4

9 1

5 8 1 6

7 2 1 3

5 1 7

9 3 4 7

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

1. wersto

2. uorxesep

3. ainiotnlf

4. eewlirss

5. bihdndtaw

6. tctopionre

7. ieutsliti

8. oyrmtija

9. sesiornce

10. tisybiatl

Source: 4puz.com

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FOR DEALER 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.

To learn more about how Renaissance Investments can help you and your clients, visitwww.renaissanceinvestments.caor call 1-888-888-FUND (3863).

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