Download Mackenzie Canadian Large Cap Growth Fund

MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
MANAGEMENT REPORT
Management’s Responsibility for Financial Reporting
The accompanying financial statements have been prepared by Mackenzie Financial Corporation, as Manager of Mackenzie Canadian Large Cap Growth Fund (the “Fund”). The Manager is
responsible for the integrity, objectivity and reliability of the data presented. This responsibility includes selecting appropriate accounting principles and making judgments and estimates
consistent with International Financial Reporting Standards. The Manager is also responsible for the development of internal controls over the financial reporting process, which are designed
to provide reasonable assurance that relevant and reliable financial information is produced.
The Board of Directors (the “Board”) of Mackenzie Financial Corporation is responsible for reviewing and approving the financial statements and overseeing the Manager’s performance of
its financial reporting responsibilities. The Board is assisted in discharging this responsibility by an Audit Committee, which reviews the financial statements and recommends them for
approval by the Board. The Audit Committee also meets regularly with the Manager, internal auditors and external auditors to discuss internal controls over the financial reporting process,
auditing matters and financial reporting issues.
Deloitte LLP is the external auditor of the Fund. It is appointed by the Board. The external auditor has audited the financial statements in accordance with Canadian generally accepted
auditing standards to enable it to express to the securityholders its opinion on the financial statements. Its report is set out below.
On behalf of Mackenzie Financial Corporation,
Manager of the Fund
Barry McInerney
President and Chief Executive Officer
Terry Rountes
Chief Financial Officer, Funds
June 6, 2017
INDEPENDENT AUDITOR’S REPORT
To the Securityholders of Mackenzie Canadian Large Cap Growth Fund (the “Fund”)
We have audited the accompanying financial statements of the Fund which comprise the statements of financial position as at March 31, 2017 and 2016, and the statements of
comprehensive income, statements of changes in financial position and statements of cash flows for the periods then ended, as indicated in Note 1, and a summary of significant accounting
policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal
control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards.
Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as at March 31, 2017 and 2016, and its financial performance and its cash
flows for the periods then ended, as indicated in Note 1, in accordance with International Financial Reporting Standards.
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
June 6, 2017
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
STATEMENTS OF FINANCIAL POSITION
In thousands (except per security figures)
As at March 31
2017
$
ASSETS
Current assets
Investments at fair value
Cash and cash equivalents
Dividends receivable
Accounts receivable for investments sold
Accounts receivable for securities issued
Unrealized gains on derivative contracts
Total assets
LIABILITIES
Current liabilities
Accounts payable for investments purchased
Accounts payable for securities redeemed
Unrealized losses on derivative contracts
Total liabilities
Net assets attributable to securityholders
Net assets attributable to securityholders
per series (note 3)
Series A
Series D
Series F
Series FB
Series G
Series I
Series O
Series PW
Series PWF
Series PWX
Series R
Series S
Quadrus Series
H Series
H5 Series
L Series
L5 Series
L8 Series
N Series
N5 Series
D5 Series
D8 Series
QF Series
QF5 Series
2016
$
195,660
2,761
256
16
10
519
199,222
212,705
2,637
437
6,771
33
–
222,583
5
183
848
1,036
198,186
5,061
115
–
5,176
217,407
33,301
15
575
1
1,013
2,142
914
390
51
49
7
84,981
61,382
405
1
10,226
1
1
2,344
1
50
203
132
1
32,889
6
598
1
1,045
1,783
674
255
1
43
22,391
85,487
60,707
417
1
9,374
–
–
1,520
1
43
171
–
–
The accompanying notes are an integral part of these financial statements.
2017
$
Net assets attributable to securityholders
per security (note 3)
Series A
Series D
Series F
Series FB
Series G
Series I
Series O
Series PW
Series PWF
Series PWX
Series R
Series S
Quadrus Series
H Series
H5 Series
L Series
L5 Series
L8 Series
N Series
N5 Series
D5 Series
D8 Series
QF Series
QF5 Series
27.50
10.23
21.78
10.39
11.94
14.42
24.68
10.08
11.40
9.56
11.37
31.30
27.36
18.77
16.33
13.40
15.12
14.80
14.10
16.41
11.05
13.65
10.53
15.20
2016
$
24.87
9.25
19.67
9.38
10.79
13.06
22.10
9.12
10.30
8.63
10.28
28.25
24.75
17.02
15.48
12.11
–
–
12.73
15.52
10.51
13.38
–
–
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
STATEMENTS OF COMPREHENSIVE INCOME
For the periods ended March 31 (note 1)
In thousands (except per security figures)
2017
$
Income
Dividends
Interest income
Other changes in fair value of investments
Net realized gain (loss)
Net unrealized gain (loss)
Securities lending income
Total income (loss)
Expenses (note 6)
Management fees
Management fee rebates
Administration fees
Interest charges
Commissions and other portfolio transaction costs
Independent Review Committee fees
Other
Expenses before amounts absorbed by Manager
Expenses absorbed by Manager
Net expenses
Increase (decrease) in net assets attributable to
securityholders from operations before tax
Foreign withholding taxes
Foreign income taxes paid (recovered)
Increase (decrease) in net assets attributable to
securityholders from operations
Increase (decrease) in net assets attributable to
securityholders from operations per series
Series A
Series D
Series F
Series FB
Series G
Series I
Series O
Series PW
Series PWF
Series PWX
Series R
Series S
Quadrus Series
H Series
H5 Series
L Series
L5 Series
L8 Series
N Series
N5 Series
D5 Series
D8 Series
QF Series
QF5 Series
2016
$
4,667
111
5,452
24
25,440
4,265
33
34,516
46,090
(65,351)
56
(13,729)
2,339
(4)
302
2
590
1
3
3,233
–
3,233
2,591
(4)
337
1
445
1
6
3,377
–
3,377
31,283
238
–
(17,106)
196
–
31,045
(17,302)
4,450
1
82
–
148
277
129
51
8
7
1,534
14,282
8,318
63
–
1,365
–
–
296
–
6
25
3
–
(3,197)
–
(46)
–
(101)
(130)
(43)
(16)
–
(4)
(1,623)
(5,535)
(5,981)
(28)
–
(495)
(1)
–
(82)
–
(4)
(16)
–
–
The accompanying notes are an integral part of these financial statements.
2017
$
Increase (decrease) in net assets attributable to
securityholders from operations per security
Series A
Series D
Series F
Series FB
Series G
Series I
Series O
Series PW
Series PWF
Series PWX
Series R
Series S
Quadrus Series
H Series
H5 Series
L Series
L5 Series
L8 Series
N Series
N5 Series
D5 Series
D8 Series
QF Series
QF5 Series
3.59
1.48
3.05
1.47
1.62
2.04
3.86
1.38
1.78
1.49
2.20
4.84
3.56
2.68
2.39
1.80
1.32
1.48
2.27
2.62
1.49
1.87
1.34
1.57
2016
$
(2.45)
1.15
(1.62)
(0.46)
(1.00)
(1.10)
(1.75)
(0.77)
0.30
(0.59)
(0.63)
(1.97)
(2.41)
(0.93)
0.66
(1.15)
–
–
(1.06)
0.71
(1.04)
(1.34)
–
–
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
STATEMENTS OF CHANGES IN FINANCIAL POSITION
For the periods ended March 31 (note 1)
In thousands
NET ASSETS ATTRIBUTABLE TO SECURITYHOLDERS
Beginning of period
Increase (decrease) in net assets from operations
Distributions paid to securityholders:
Investment income
Capital gains
Return of capital
Management fee rebates
Total distributions paid to securityholders
Security transactions:
Proceeds from securities issued
Reinvested distributions
Value of securities redeemed
Total security transactions
Total increase (decrease) in net assets
End of period
Increase (decrease) in fund securities (note 7):
Securities outstanding – beginning of period
Issued
Reinvested distributions
Redeemed
Securities outstanding – end of period
NET ASSETS ATTRIBUTABLE TO SECURITYHOLDERS
Beginning of period
Increase (decrease) in net assets from operations
Distributions paid to securityholders:
Investment income
Capital gains
Return of capital
Management fee rebates
Total distributions paid to securityholders
Security transactions:
Proceeds from securities issued
Reinvested distributions
Value of securities redeemed
Total security transactions
Total increase (decrease) in net assets
End of period
Increase (decrease) in fund securities (note 7):
Securities outstanding – beginning of period
Issued
Reinvested distributions
Redeemed
Securities outstanding – end of period
2017
2016
Series A
$
32,889
42,565
4,450
(3,197)
2017
2016
Series D
$
6
1
1
–
2017
2016
Series F
$
598
687
82
(46)
2017
2016
Series FB
$
1
–
–
–
2017
2016
Series G
$
1,045
1,407
148
(101)
(267)
(911)
–
–
(1,178)
(236)
(4,062)
–
–
(4,298)
–
–
–
–
–
–
–
–
–
–
(6)
(21)
–
–
(27)
(4)
(69)
–
–
(73)
–
–
–
–
–
–
–
–
–
–
(9)
(32)
–
–
(41)
(8)
(135)
–
–
(143)
10,444
1,175
(14,479)
(2,860)
412
33,301
2,856
4,287
(9,324)
(2,181)
(9,676)
32,889
8
–
–
8
9
15
5
–
–
5
5
6
160
26
(264)
(78)
(23)
575
153
71
(194)
30
(89)
598
–
–
–
–
–
1
1
–
–
1
1
1
–
39
(178)
(139)
(32)
1,013
–
135
(253)
(118)
(362)
1,045
Securities
1,322
1,382
394
101
44
166
(549)
(327)
1,211
1,322
Securities
1
–
–
–
1
–
1
–
–
1
Securities
30
29
8
6
1
3
(13)
(8)
26
30
Securities
–
–
–
–
–
Series I
$
1,783
1,793
277
(130)
Series O
$
674
708
129
(43)
Series PW
$
255
66
51
(16)
Series PWF
$
1
8
–
–
–
–
–
Securities
97
–
3
(15)
85
–
–
Series PWX
$
43
47
7
(4)
106
–
12
(21)
97
(20)
(66)
–
(4)
(90)
(11)
(185)
–
(4)
(200)
(10)
(35)
–
–
(45)
(5)
(94)
–
–
(99)
(4)
(13)
–
–
(17)
(1)
(22)
–
–
(23)
(1)
(2)
–
–
(3)
–
–
–
–
–
(1)
(2)
–
–
(3)
–
(5)
–
–
(5)
190
90
(108)
172
359
2,142
246
200
(126)
320
(10)
1,783
193
45
(82)
156
240
914
729
99
(720)
108
(34)
674
154
17
(70)
101
135
390
280
23
(75)
228
189
255
43
2
–
45
50
51
1
–
–
1
1
1
–
3
(1)
2
6
49
–
5
–
5
(4)
43
Securities
137
14
6
(8)
149
The accompanying notes are an integral part of these financial statements.
112
18
16
(9)
137
Securities
31
8
2
(4)
37
26
28
4
(27)
31
Securities
28
6
16
27
2
2
(7)
(7)
39
28
Securities
–
5
–
–
5
–
–
–
–
–
Securities
5
–
–
–
5
4
–
1
–
5
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
STATEMENTS OF CHANGES IN FINANCIAL POSITION (cont’d)
For the periods ended March 31 (note 1)
In thousands
NET ASSETS ATTRIBUTABLE TO SECURITYHOLDERS
Beginning of period
Increase (decrease) in net assets from operations
Distributions paid to securityholders:
Investment income
Capital gains
Return of capital
Management fee rebates
Total distributions paid to securityholders
Security transactions:
Proceeds from securities issued
Reinvested distributions
Value of securities redeemed
Total security transactions
Total increase (decrease) in net assets
End of period
Increase (decrease) in fund securities (note 7):
Securities outstanding – beginning of period
Issued
Reinvested distributions
Redeemed
Securities outstanding – end of period
NET ASSETS ATTRIBUTABLE TO SECURITYHOLDERS
Beginning of period
Increase (decrease) in net assets from operations
Distributions paid to securityholders:
Investment income
Capital gains
Return of capital
Management fee rebates
Total distributions paid to securityholders
Security transactions:
Proceeds from securities issued
Reinvested distributions
Value of securities redeemed
Total security transactions
Total increase (decrease) in net assets
End of period
Increase (decrease) in fund securities (note 7):
Securities outstanding – beginning of period
Issued
Reinvested distributions
Redeemed
Securities outstanding – end of period
2017
2016
Series R
$
22,391
53,327
1,534
(1,623)
2017
2016
Series S
$
85,487
94,357
14,282
(5,535)
2017
2016
Quadrus Series
$
60,707
80,977
8,318
(5,981)
2017
2016
H Series
$
417
884
63
(28)
2017
2016
H5 Series
$
1
–
–
–
–
–
–
–
–
(178)
(3,064)
–
–
(3,242)
(1,178)
(4,026)
–
–
(5,204)
(671)
(11,533)
–
–
(12,204)
(498)
(1,700)
–
–
(2,198)
(444)
(7,633)
–
–
(8,077)
(4)
(15)
–
–
(19)
(3)
(52)
–
–
(55)
–
–
–
–
–
–
–
–
–
–
19
–
(23,937)
(23,918)
(22,384)
7
308
3,241
(29,620)
(26,071)
(30,936)
22,391
4,772
5,204
(19,560)
(9,584)
(506)
84,981
12,672
12,204
(16,007)
8,869
(8,870)
85,487
4,878
2,189
(12,512)
(5,445)
675
61,382
6,846
8,067
(21,125)
(6,212)
(20,270)
60,707
31
19
(106)
(56)
(12)
405
118
55
(557)
(384)
(467)
417
–
–
–
–
–
1
1
–
–
1
1
1
Securities
2,179
4,191
2
31
–
306
(2,180)
(2,349)
1
2,179
L Series
$
9,374
1,181
1,365
(495)
Securities
3,026
2,719
159
387
172
419
(642)
(499)
2,715
3,026
L5 Series
$
–
–
–
(1)
Securities
2,453
2,633
185
241
82
314
(477)
(735)
2,243
2,453
L8 Series
$
–
–
–
–
Securities
25
42
2
6
1
3
(6)
(26)
22
25
Securities
–
–
–
–
–
–
–
–
–
–
N Series
$
1,520
566
296
(82)
N5 Series
$
1
–
–
–
(86)
(294)
–
–
(380)
(63)
(1,084)
–
–
(1,147)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(27)
(91)
–
–
(118)
(11)
(188)
–
–
(199)
–
–
–
–
–
–
–
–
–
–
2,128
380
(2,641)
(133)
852
10,226
9,653
1,147
(965)
9,835
8,193
9,374
1
–
–
1
1
1
3
–
(2)
1
–
–
1
–
–
1
1
1
–
–
–
–
–
–
681
118
(153)
646
824
2,344
1,088
198
(51)
1,235
954
1,520
–
–
–
–
–
1
1
–
–
1
1
1
Securities
774
166
29
(206)
763
The accompanying notes are an integral part of these financial statements.
79
677
91
(73)
774
Securities
–
–
–
–
–
–
–
–
–
–
Securities
–
–
–
–
–
–
–
–
–
–
Securities
119
49
9
(11)
166
36
72
15
(4)
119
Securities
–
–
–
–
–
–
–
–
–
–
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
STATEMENTS OF CHANGES IN FINANCIAL POSITION (cont’d)
For the periods ended March 31 (note 1)
In thousands
NET ASSETS ATTRIBUTABLE TO SECURITYHOLDERS
Beginning of period
Increase (decrease) in net assets from operations
Distributions paid to securityholders:
Investment income
Capital gains
Return of capital
Management fee rebates
Total distributions paid to securityholders
Security transactions:
Proceeds from securities issued
Reinvested distributions
Value of securities redeemed
Total security transactions
Total increase (decrease) in net assets
End of period
Increase (decrease) in fund securities (note 7):
Securities outstanding – beginning of period
Issued
Reinvested distributions
Redeemed
Securities outstanding – end of period
2017
2016
D5 Series
$
43
51
6
(4)
2017
2016
D8 Series
$
171
199
25
(16)
2017
2016
QF Series
$
–
–
3
–
2017
2016
QF5 Series
$
–
–
–
–
2017
2016
Total
$
217,407 278,816
31,045
(17,302)
–
(1)
(2)
–
(3)
–
(5)
(2)
–
(7)
(2)
(5)
(15)
–
(22)
(1)
(18)
(15)
–
(34)
–
(1)
–
–
(1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2,113)
(7,215)
(17)
(4)
(9,349)
(1,636)
(28,149)
(17)
(4)
(29,806)
3
2
(1)
4
7
50
–
6
(3)
3
(8)
43
22
14
(7)
29
32
203
–
26
(4)
22
(28)
171
132
1
(3)
130
132
132
–
–
–
–
–
–
1
–
–
1
1
1
–
–
–
–
–
–
23,861
9,324
(74,102)
(40,917)
(19,221)
198,186
34,961
29,764
(79,026)
(14,301)
(61,409)
217,407
4
–
1
(1)
4
Securities
13
11
2
–
1
2
(1)
–
15
13
Securities
–
13
–
–
13
–
–
–
–
–
Securities
4
1
–
–
5
The accompanying notes are an integral part of these financial statements.
Securities
–
–
–
–
–
–
–
–
–
–
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
STATEMENTS OF CASH FLOWS
For the periods ended March 31 (note 1)
In thousands
Cash flows from operating activities
Net increase (decrease) in net assets attributable to
securityholders from operations
Adjustments for:
Net realized loss (gain) on investments
Change in net unrealized loss (gain) on investments
Purchase of investments
Proceeds from sale and maturity of investments
Change in dividends receivable
Net cash from operating activities
Cash flows from financing activities
Proceeds from redeemable securities issued
Payments on redemption of redeemable securities
Distributions paid net of reinvestments
Net cash from financing activities
2017
$
2016
$
31,045
(17,302)
(25,440)
(4,265)
(214,287)
263,062
181
50,296
(46,090)
65,351
(160,559)
202,130
(141)
43,389
15,461
(65,611)
(25)
(50,175)
34,962
(79,126)
(42)
(44,206)
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effect of exchange rate fluctuations on cash and cash
equivalents
Cash and cash equivalents at end of period
121
2,637
(817)
3,457
3
2,761
(3)
2,637
Cash
Cash equivalents
Cash and cash equivalents at end of period
744
2,017
2,761
518
2,119
2,637
Supplementary disclosures on cash flow from operating
activities:
Dividends received
Foreign taxes paid
Interest received
Interest paid
4,848
238
111
2
5,311
196
24
1
The accompanying notes are an integral part of these financial statements.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
SCHEDULE OF INVESTMENTS
As at March 31, 2017
Country
Sector
Par Value/
No. of
Shares/Units
Average
Cost
($ 000s)
EQUITIES
3i Group PLC
United Kingdom
Financials
99,930 Actelion Ltd.
Switzerland
Health Care
6,993 Adidas AG
Germany
Consumer Discretionary
10,636 Advantage Oil & Gas Ltd.
Canada
Energy
234,826 Alimentation Couche-Tard Inc. Class B Sub. voting
Canada
Consumer Staples
50,820 Alphabet Inc. Class A
United States
Information Technology
2,037 Alphabet Inc. Class C
United States
Information Technology
1,524 Apple Inc.
United States
Information Technology
16,671 Applied Materials Inc.
United States
Information Technology
46,096 Aristocrat Leisure Ltd.
Australia
Consumer Discretionary
116,623 Ashtead Group PLC
United Kingdom
Industrials
45,694 ATCO Ltd. Class I non-voting
Canada
Utilities
25,432 Banco Bradesco SA Pfd.
Brazil
Financials
148,290 Bank of Montreal
Canada
Financials
37,170 The Bank of Nova Scotia
Canada
Financials
58,759 Barrick Gold Corp.
Canada
Materials
66,285 Best Buy Co. Inc.
United States
Consumer Discretionary
36,318 Brookfield Renewable Energy Partners LP
Canada
Utilities
53,571 Brother Industries Ltd.
Japan
Information Technology
77,900 CAE Inc.
Canada
Industrials
84,704 Canadian National Railway Co.
Canada
Industrials
62,630 Canadian Natural Resources Ltd.
Canada
Energy
104,533 Canadian Pacific Railway Ltd.
Canada
Industrials
9,035 Canadian Tire Corp. Ltd. Class A non-voting
Canada
Consumer Discretionary
10,213 Capital One Financial Corp.
United States
Financials
14,557 CCL Industries Inc. Class B non-voting
Canada
Materials
3,862 Celestica Inc. Sub. voting
Canada
Information Technology
65,609 CenturyLink Inc.
United States
Telecommunication Services
46,739 Christian Dior SE
France
Consumer Discretionary
10,594 Constellation Software Inc.
Canada
Information Technology
4,797 Crescent Point Energy Corp.
Canada
Energy
127,341 Detour Gold Corp.
Canada
Materials
68,575 Deutsche Wohnen AG
Germany
Real Estate
23,093 Dollarama Inc.
Canada
Consumer Discretionary
16,465 The Dow Chemical Co.
United States
Materials
27,924 Electrocomponents PLC
United Kingdom
Information Technology
248,449 Enerplus Corp.
Canada
Energy
176,135 Euronext NV
Netherlands
Financials
16,500 Express Scripts Holding Co.
United States
Health Care
31,192 Facebook Inc.
United States
Information Technology
5,893 Faes Farma SA
Spain
Health Care
29,686 First Quantum Minerals Ltd.
Canada
Materials
224,122 Fuchs Petrolub SE
Germany
Materials
26,760 Genworth MI Canada Inc.
Canada
Financials
32,271 Gilead Sciences Inc.
United States
Health Care
21,750 Goldcorp Inc.
Canada
Materials
44,564 Industrial Alliance Insurance and Financial Services Inc.
Canada
Financials
30,464 Ivanhoe Mines Ltd.
Canada
Materials
391,796 JPMorgan Chase & Co.
United States
Financials
19,522 1,106 2,416 2,353 1,724 1,677 1,097 632 2,348 1,903 2,070 875 1,178 995 2,967 2,470 1,379 1,901 2,111 1,796 1,555 1,944 3,493 1,706 1,560 1,405 898 951 1,753 2,984 3,114 1,972 1,892 957 1,601 1,819 1,961 1,556 957 2,960 843 117 2,003 1,658 972 2,703 1,077 1,484 955 1,895 Fair
Value
($ 000s)
1,248
2,622
2,692
2,062
3,053
2,298
1,682
3,187
2,386
2,130
1,259
1,315
2,043
3,692
4,571
1,674
2,375
2,111
2,164
1,721
6,148
4,551
1,765
1,613
1,678
1,121
1,269
1,466
3,276
3,135
1,830
1,045
1,012
1,815
2,361
1,960
1,886
958
2,735
1,114
141
3,167
1,737
1,187
1,966
865
1,756
1,818
2,282
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
SCHEDULE OF INVESTMENTS (cont’d)
As at March 31, 2017
Country
Sector
Par Value/
No. of
Shares/Units
Average
Cost
($ 000s)
Fair
Value
($ 000s)
EQUITIES (cont’d)
Lear Corp.
United States
Consumer Discretionary
12,710 2,366 2,394
Loblaw Companies Ltd.
Canada
Consumer Staples
27,646 1,582 1,995
Manulife Financial Corp.
Canada
Financials
134,085 2,968 3,163
Naver Corp.
South Korea
Information Technology
1,201 961 1,223
Onex Corp. Sub. voting
Canada
Financials
35,572 3,200 3,395
Open Text Corp.
Canada
Information Technology
67,053 2,696 3,031
Packaging Corp. of America
United States
Materials
13,530 1,199 1,649
PDL BioPharma Inc.
United States
Health Care
402,500 2,676 1,216
Pier 1 Imports Inc.
United States
Consumer Discretionary
121,673 1,433 1,159
The Procter & Gamble Co.
United States
Consumer Staples
20,335 2,378 2,431
Prudential Financial Inc.
United States
Financials
19,792 2,253 2,809
QEP Resources Inc.
United States
Energy
75,133 1,511 1,271
Quanta Services Inc.
United States
Industrials
39,253 1,492 1,938
Recordati SPA
Italy
Health Care
36,247 1,190 1,635
Restaurant Brands International Inc.
Canada
Consumer Discretionary
35,282 2,581 2,614
Royal Bank of Canada
Canada
Financials
71,455 3,945 6,923
Samsung Electronics Co. Ltd.
South Korea
Information Technology
1,090 1,646 2,674
Saputo Inc.
Canada
Consumer Staples
41,605 1,313 1,909
Sharp Corp.
Japan
Consumer Discretionary
634,200 2,454 3,561
Sun Life Financial Inc.
Canada
Financials
77,499 3,660 3,763
Tencent Holdings Ltd.
China
Information Technology
32,200 932 1,228
Thomson Reuters Corp.
United States
Financials
30,728 1,720 1,767
Toromont Industries Ltd.
Canada
Industrials
43,335 1,937 2,016
The Toronto-Dominion Bank
Canada
Financials
126,482 7,083 8,426
TransAlta Renewables Inc.
Canada
Utilities
69,510 1,036 1,095
TransCanada Corp.
Canada
Energy
21,837 1,123 1,340
Transcontinental Inc. Class A Sub. voting
Canada
Industrials
80,218 1,597 1,972
Turquoise Hill Resources Ltd.
Canada
Materials
357,681 1,634 1,452
United Continental Holdings Inc.
United States
Industrials
21,644 2,107 2,034
United Rentals Inc.
United States
Industrials
14,852 1,703 2,471
Valener Inc.
Canada
Utilities
40,551 912 886
VMware Inc. Class A
United States
Information Technology
23,213 2,597 2,846
Wabash National Corp.
United States
Industrials
92,003 2,567 2,533
Western Forest Products Inc.
Canada
Materials
882,568 2,020 1,915
Westshore Terminals Investment Corp.
Canada
Industrials
101,548 2,188 2,687
Whitecap Resources Inc.
Canada
Energy
128,720 1,438 1,332
Whiting Petroleum Corp.
United States
Energy
115,578 2,613 1,455
The Williams Companies Inc.
United States
Energy
63,221 1,360 2,489
WPP PLC
United Kingdom
Consumer Discretionary
34,946 1,001 1,021
Total equities
164,815 195,660
Transaction costs
Total investments
(244)
164,571 –
195,660
Derivative instruments
(see schedule of derivative instruments)
(329)
Cash and cash equivalents
2,761
Other assets less liabilities
94
Total net assets
198,186
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
SUMMARY OF INVESTMENT PORTFOLIO
March 31, 2017
March 31, 2016
Portfolio Allocation
Equities
Cash and short-term investments
Other assets (liabilities)
% of NAV
98.8
1.4
(0.2)
Portfolio Allocation
Equities
Cash and short-term investments
Other assets (liabilities)
% of NAV
97.9
1.2
0.9
Regional Allocation
Canada
United States
Other
Japan
United Kingdom
Germany
South Korea
Cash and short-term investments
Other assets (liabilities)
% of NAV
53.0
28.3
7.1
2.9
2.8
2.7
2.0
1.4
(0.2)
Regional Allocation
Canada
United States
Other
Japan
United Kingdom
Brazil
Cash and short-term investments
Other assets (liabilities)
% of NAV
55.0
25.0
7.2
5.9
3.3
1.5
1.2
0.9
Sector Allocation
Financials
Information technology
Industrials
Consumer discretionary
Materials
Energy
Health care
Consumer staples
Utilities
Cash and short-term investments
Other
Other assets (liabilities)
% of NAV
25.2
15.3
13.4
12.4
9.5
9.2
5.2
4.7
2.7
1.4
1.2
(0.2)
Sector Allocation
Financials
Energy
Information technology
Industrials
Consumer discretionary
Consumer staples
Materials
Health care
Telecommunication services
Cash and short-term investments
Other assets (liabilities)
% of NAV
29.9
13.2
11.6
10.1
9.5
9.2
7.0
5.1
2.3
1.2
0.9
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
SCHEDULE OF DERIVATIVE INSTRUMENTS
As at March 31, 2017
Schedule of Forward Currency Contracts
Counterparty
Credit Rating
AA
AA
AA
AA
AA
AA
AA
AA
Unrealized Gains
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
AA
Unrealized (Losses)
Bought
($ 000s)
4,725 British pound
3,000 U.S. dollar
23,200 Mexican peso
5,298 Canadian dollar
2,238 Canadian dollar
2,540 Canadian dollar
900 U.S. dollar
2,542 Canadian dollar
781
79
3,994
665
1,900
733
797
6,826
2,484
3,929
4,900
829
567
698
91
81
1,230
1,065
267
2,487
1,680
550
1,990
643
1,889
175,000
184
175,000
Canadian dollar
Canadian dollar
Canadian dollar
Canadian dollar
Hong Kong dollar
Canadian dollar
Canadian dollar
Canadian dollar
Canadian dollar
Canadian dollar
Hong Kong dollar
Canadian dollar
Canadian dollar
Canadian dollar
Canadian dollar
Canadian dollar
Canadian dollar
Canadian dollar
Canadian dollar
Canadian dollar
Euro
U.S. dollar
Canadian dollar
Canadian dollar
Canadian dollar
Japanese yen
Canadian dollar
Japanese yen
Sold
($ 000s)
(7,721) Canadian dollar
(3,948) Canadian dollar
(1,464) Canadian dollar
(3,675) Euro
(1,675) U.S. dollar
(1,763) Euro
(1,194) Canadian dollar
(1,763) Euro
(67,800)
(6,910)
(2,400)
(400)
(329)
(4,350)
(485)
(4,240)
(1,500)
(3,000)
(850)
(4,900)
(47,800)
(60,000)
(1,500)
(1,315)
(20,385)
(926,500)
(225,000)
(1,500)
(2,422)
(732)
(4,790)
(550,000)
(1,626,000)
(2,115)
(15,500)
(2,115)
Japanese yen
Japanese yen
British pound
British pound
Canadian dollar
Hong Kong dollar
British pound
British pound
British pound
U.S. dollar
Canadian dollar
Hong Kong dollar
Japanese yen
Japanese yen
Mexican peso
Mexican peso
Mexican peso
South Korean won
South Korean won
British pound
Canadian dollar
Canadian dollar
Brazilian real
South Korean won
South Korean won
Canadian dollar
Japanese yen
Canadian dollar
Settlement
Date
Apr. 26, 2017
May 5, 2017
May 12, 2017
May 12, 2017
May 12, 2017
Jun. 30, 2017
Jul. 14, 2017
Jul. 14, 2017
Contract
Cost
($ 000s)
7,721
3,948
1,464
(5,298)
(2,238)
(2,540)
1,194
(2,542)
Current
Fair Value
($ 000s)
7,876
3,987
1,636
(5,221)
(2,226)
(2,509)
1,195
(2,510)
Apr. 5, 2017
Apr. 5, 2017
Apr. 21, 2017
Apr. 21, 2017
Apr. 26, 2017
Apr. 26, 2017
Apr. 26, 2017
Apr. 26, 2017
Apr. 26, 2017
May 5, 2017
May 10, 2017
May 10, 2017
May 10, 2017
May 10, 2017
May 12, 2017
May 12, 2017
May 12, 2017
May 12, 2017
May 12, 2017
May 17, 2017
Jun. 9, 2017
Jun. 16, 2017
Jun. 23, 2017
Jun. 23, 2017
Jun. 23, 2017
Jul. 12, 2017
Jul. 12, 2017
Jul. 26, 2017
(781)
(79)
(3,994)
(665)
329
(733)
(797)
(6,826)
(2,484)
(3,929)
850
(829)
(567)
(698)
(91)
(81)
(1,230)
(1,065)
(267)
(2,487)
2,422
732
(1,990)
(643)
(1,889)
2,115
(184)
2,115
(810)
(83)
(4,000)
(667)
325
(744)
(808)
(7,066)
(2,500)
(3,988)
839
(839)
(572)
(717)
(106)
(93)
(1,438)
(1,103)
(267)
(2,501)
2,389
730
(1,993)
(655)
(1,936)
2,096
(185)
2,098
Unrealized
Gains (Losses)
($ 000s)
155
39
172
77
12
31
1
32
519
(29)
(4)
(6)
(2)
(4)
(11)
(11)
(240)
(16)
(59)
(11)
(10)
(5)
(19)
(15)
(12)
(208)
(38)
(14)
(33)
(2)
(3)
(12)
(47)
(19)
(1)
(17)
(848)
Total forward currency contracts
(329)
Total derivative instruments at fair value
(329)
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
CANADIAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
1. Fiscal Periods and General Information
The information provided in these financial statements and notes thereto is for the periods ended or as at March 31, 2017 and 2016, as applicable.
In the year a Fund or series is established or reinstated, ‘period’ represents the period from inception or reinstatement to the period end of that fiscal
year. Refer to Note 9 for the formation date of the Fund and the inception date of each series.
The Fund is organized as an open-ended mutual fund trust established under the laws of the Province of Ontario pursuant to a Declaration of Trust
as amended and restated from time to time. The address of the Fund’s registered office is 180 Queen Street West, Toronto, Ontario, Canada. The
Fund is authorized to issue an unlimited number of units (referred to as “security” or “securities”) of multiple series. Series of the Fund are available
for sale under Simplified Prospectus or exempt distribution options.
Mackenzie Financial Corporation (“Mackenzie”) is the manager of the Fund and is wholly owned by IGM Financial Inc., a subsidiary of Power Financial
Corporation, which itself is a subsidiary of Power Corporation of Canada. The Great-West Life Assurance Company, London Life Insurance Company
and The Canada Life Assurance Company (collectively, the “Related Insurance Companies”) are wholly owned by Great-West Lifeco Inc., which is also
a subsidiary of Power Financial Corporation. Investments in companies within the Power Group of companies held by the Fund are identified in the
Schedule of Investments.
2. Basis of Preparation and Presentation
These audited annual financial statements (“financial statements”) have been prepared in accordance with International Financial Reporting
Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). A summary of the Fund’s significant accounting policies
under IFRS is presented in Note 3.
These financial statements are presented in Canadian dollars, which is the Fund’s functional and presentation currency, and rounded to the nearest
thousand unless otherwise indicated. These financial statements are prepared on a going concern basis using the historical cost basis, except for
financial assets and liabilities that have been measured at fair value.
These financial statements were authorized for issue by the Board of Directors on June 6, 2017.
Standards issued but not yet effective for the current accounting year, as applicable, are described in Note 3.
3. Significant Accounting Policies
(a) Financial instruments
Financial instruments include financial assets and liabilities such as debt and equity securities, open-ended investment funds and derivatives.
The Fund classifies and measures financial instruments in accordance with IFRS 9 Financial Instruments (as issued in 2014) (“IFRS 9”). Upon
initial recognition, financial instruments are classified as fair value through profit or loss (“FVTPL”). All financial instruments are recognized in
the Statement of Financial Position when the Fund becomes a party to the contractual requirements of the instrument. Financial instruments are
derecognized when the right to receive cash flows from the instrument has expired or the Fund has transferred substantially all risks and rewards of
ownership. As such, investment purchase and sale transactions are recorded as of the trade date.
Financial instruments are subsequently measured at FVTPL with changes in fair value recognized in the Statement of Comprehensive Income – Net
unrealized gain (loss).
The Fund’s redeemable securities contain multiple dissimilar contractual obligations and therefore meet the criteria for classification as financial
liabilities under IAS 32 Financial Instruments: Presentation. The Fund’s obligation for net assets attributable to securityholders is presented at the
redemption amount.
Realized and unrealized gains and losses on investments are calculated based on average cost of investments and exclude commissions and other
portfolio transaction costs, which are separately reported in the Statement of Comprehensive Income – Commissions and other portfolio transaction
costs.
Gains and losses arising from changes in the fair value of the investments are included in the Statement of Comprehensive Income for the period in
which they arise.
The Fund accounts for its holdings in unlisted open-ended investment funds, if any, at fair value through profit and loss. Mackenzie has concluded
that any unlisted open-ended investment fund in which the Fund invests, does not meet either the definition of structured entities or the definition of
an associate.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
CANADIAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
3. Significant Accounting Policies (cont’d)
(b) Fair value measurement
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
Investments listed on a public securities exchange or traded on an over-the-counter market are valued on the basis of the last traded market price
or close price recorded by the security exchange on which the security is principally traded, where this price falls within the quoted bid-ask spread
for the investment. In circumstances where this price is not within the bid-ask spread, Mackenzie determines the point within the bid-ask spread
that is most representative of fair value based on the specific facts and circumstances. Mutual fund securities of an underlying fund are valued
on a business day at the price calculated by the manager of such underlying fund in accordance with the constating documents of such underlying
fund. Unlisted or non-exchange traded investments, or investments where a last sale or close price is unavailable or investments for which market
quotations are, in Mackenzie’s opinion, inaccurate, unreliable, or not reflective of all available material information, are valued at their fair value as
determined by Mackenzie using appropriate and accepted industry valuation techniques including valuation models. The fair value determined using
valuation models requires the use of inputs and assumptions based on observable market data including volatility and other applicable rates or
prices. In limited circumstances, the fair value may be determined using valuation techniques that are not supported by observable market data.
The cost of investments is determined on a weighted average cost basis.
Cash and cash equivalents which includes cash on deposit with financial institutions and short term investments that are readily convertible to
cash, are subject to an insignificant risk of changes in value, and are used by the Fund in the management of short-term commitments. Cash and
cash equivalents are reported at fair value which closely approximates their amortized cost due to their nature of being highly liquid and having short
terms to maturity. Bank overdraft positions are presented under current liabilities as bank indebtedness in the Statement of Financial Position.
The Fund may use derivatives (such as written options, futures, forward contracts, swaps or customized derivatives) to hedge against losses
caused by changes in securities prices, interest rates or exchange rates. The Fund may also use derivatives for non-hedging purposes in order to
invest indirectly in securities or financial markets, to gain exposure to other currencies, to seek to generate additional income, and/or for any other
purpose considered appropriate by the Fund’s portfolio manager(s), provided that the use of the derivative is consistent with the Fund’s investment
objectives. Any use of derivatives will comply with Canadian mutual fund laws, subject to the regulatory exemptions granted to the Fund, as
applicable. Refer to “Exemptions from National Instrument 81-102” in the Annual Information Form of the Fund for further details, including the
complete conditions of these exemptions, as applicable.
Valuations of derivative instruments are carried out daily, using normal exchange reporting sources for exchange-traded derivatives and specific
broker enquiry for over-the-counter derivatives.
The value of forward contracts is the gain or loss that would be realized if, on the valuation date, the positions were to be closed out. The change in
value of forward contracts is included in the Statement of Comprehensive Income – Other changes in fair value of investments – Net unrealized gain
(loss).
The value of futures contracts or swaps fluctuates daily, and cash settlements made daily, where applicable, by the Fund are equal to the unrealized
gains or losses on a “mark to market” basis. These unrealized gains or losses are recorded and reported as such until the Fund closes out the
contract or the contract expires. Margin paid or deposited in respect of futures contracts or swaps is reflected as a receivable in the Statement of
Financial Position – Margin on futures contracts or swaps. Any change in the variation margin requirement is settled daily.
Premiums received from writing options are included in the Statement of Financial Position as a liability and subsequently adjusted daily to fair
value. If a written option expires unexercised, the premium received is recognized as a realized gain. If a written call option is exercised, the
difference between the proceeds of the sale plus the value of the premium, and the cost of the security is recognized as a realized gain or loss. If a
written put option is exercised, the cost of the security acquired is the exercise price of the option less the premium received.
Refer to the Schedule of Derivative Instruments and Schedule of Options Purchased/Written, as applicable, included in the Schedule of Investments
for a listing of derivative and options positions as at March 31, 2017.
(c) Income recognition
Interest income from interest bearing investments is recognized using the effective interest method. Dividends are accrued as of the ex-dividend
date. Realized gains or losses on the sale of investments, including foreign exchange gains or losses on such investments, are calculated on an
average cost basis. Distributions received from an underlying fund are included in interest income, dividend income or realized gains (losses) on sale
of investments, as appropriate.
Income, realized gains (losses) and unrealized gains (losses) are allocated daily among the series on a pro-rata basis.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
CANADIAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
3. Significant Accounting Policies (cont’d)
(d) Commissions and other portfolio transaction costs
Commissions and other portfolio transaction costs are costs incurred to acquire, issue or dispose of financial assets or liabilities. They include fees
and commissions paid to agents, advisers, brokers and dealers.
(e) Securities lending, repurchase and reverse repurchase transactions
The Fund is permitted to enter into securities lending, repurchase and reverse repurchase transactions as set out in the Fund’s Simplified Prospectus.
These transactions involve the temporary exchange of securities for collateral with a commitment to redeliver the same securities on a future date.
Securities lending transactions are administered by Canadian Imperial Bank of Commerce (the “Securities Lending Agent”). The value of cash
or securities held as collateral must be at least 102% of the fair value of the securities loaned, sold or purchased. Income is earned from these
transactions in the form of fees paid by the counterparty and, in certain circumstances, interest paid on cash or securities held as collateral. Income
earned from these transactions is included in the Statement of Comprehensive Income – Securities lending income and recognized when earned.
Note 9 summarizes the details of securities loaned and collateral received, as well as a reconciliation of securities lending income, if applicable.
(f)Offsetting
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position only when there is a legally enforceable
right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously.
In the normal course of business, the Fund enters into various master netting agreements or similar agreements that do not meet the criteria for
offsetting in the Statement of Financial Position but still allow for the related amounts to be set off in certain circumstances, such as bankruptcy or
termination of the contracts. Note 9 summarizes the details of such offsetting, if applicable.
Income and expenses are not offset in the Statement of Comprehensive Income unless required or permitted to by an accounting standard, as
specifically disclosed in the IFRS policies of the Fund.
(g) Foreign currency
The functional and presentation currency of the Fund is Canadian dollars. Foreign currency purchases and sales of investments and foreign currency
dividend and interest income and expenses are translated to Canadian dollars at the rate of exchange prevailing at the time of the transactions.
Foreign exchange gains (losses) on purchases and sales of foreign currencies are included in the Statement of Comprehensive Income – Net realized
gain (loss).
The fair value of investments and other assets and liabilities, denominated in foreign currencies, are translated to Canadian dollars at the rate of
exchange prevailing on each business day.
(h) Net assets attributable to securityholders per security
Net assets attributable to securityholders per security is computed by dividing the net assets attributable to securityholders of a series of securities
on a business day by the total number of securities of the series outstanding on that day.
(i) Net asset value per security
The daily Net Asset Value (“NAV”) of an investment fund may be calculated without reference to IFRS as per the Canadian Securities Administrators’
(“CSA”) regulations. The difference between NAV and Net assets attributable to securityholders (as reported in the financial statements), if any, is
mainly due to differences in fair value of investments and other financial assets and liabilities. Refer to Note 9 for the Fund’s NAV per security.
(j) Increase (decrease) in net assets attributable to securityholders from operations per security
Increase (decrease) in net assets attributable to securityholders from operations per security in the Statement of Comprehensive Income represents
the increase (decrease) in net assets attributable to securityholders from operations for the period, divided by the weighted average number of
securities outstanding during the period.
(k)Mergers
The Fund applies the acquisition method of accounting for Fund mergers. Under this method, one of the Funds in each merger is identified as the
acquiring Fund, and is referred to as the Continuing Fund, and the other Fund involved in the merger is referred to as the Terminated Fund. This
identification is based on the comparison of the relative net asset values of the Funds as well as consideration of the continuation of such aspects of
the Continuing Fund as: investment advisors; investment objectives and practices; type of portfolio securities; and management fees and expenses.
(l) IASB Disclosure Initiative
Amendments to IAS 1 Presentation of Financial Statements became effective for annual periods beginning on or after January 1, 2016. Mackenzie has
determined there are no implications to the Fund’s financial statements arising from the amendments.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
CANADIAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
4. Critical Accounting Estimates and Judgments
The preparation of these financial statements requires management to make estimates and assumptions that primarily affect the valuation of
investments. Estimates and assumptions are reviewed on an ongoing basis. Actual results may differ from these estimates.
Use of Estimates
Fair value of securities not quoted in an active market
The Fund may hold financial instruments that are not quoted in active markets and are valued using valuation techniques that make use of
observable data, to the extent practicable. Various valuation techniques are utilized, depending on a number of factors, including comparison with
similar instruments for which observable market prices exist and recent arm’s length market transactions. Key inputs and assumptions used are
company specific and may include estimated discount rates and expected price volatilities. Changes in key inputs, could affect the reported fair
value of these financial instruments held by the Fund.
Use of Judgments
Classification and measurement of investments and application of the fair value option
In classifying and measuring financial instruments held by the Fund, Mackenzie is required to make significant judgments in order to determine the
most appropriate classification in accordance with IFRS 9. Mackenzie has assessed the Fund’s business model, the manner in which all financial
instruments are managed and performance evaluated as a group on a fair value basis, and concluded that FVTPL in accordance with IFRS 9 provides
the most appropriate measurement and presentation of the Fund’s financial instruments.
Functional currency
The Fund’s functional and presentation currency is the Canadian dollar, which is the currency considered to best represent the economic effects of
the Fund’s underlying transactions, events and conditions taking into consideration the manner in which securities are issued and redeemed and how
returns and performance by the Fund are measured.
Structured entities and associates
In determining whether unlisted open-ended investment funds in which the Fund invests, but that it does not consolidate, meets the definitions
of either a structured entity or of an associate, Mackenzie is required to make significant judgments about whether these underlying funds have
the typical characteristics of a structured entity or of an associate. Mackenzie has assessed the characteristics of these underlying funds and has
concluded that they do not meet the definition of either a structured entity or of an associate because the Fund does not have contracts or financing
arrangements with these underlying funds and the Fund does not have an ability to influence the activities of these underlying funds or the returns it
receives from investing in these underlying funds.
5. Income Taxes
The Fund qualifies as a mutual fund trust under the provisions of the Income Tax Act (Canada) and, accordingly, is subject to tax on its income
including net realized capital gains in the taxation year, which is not paid or payable to its securityholders as at the end of the taxation year. It is the
intention of the Fund to distribute all of its net income and sufficient net realized capital gains so that the Fund will not be subject to income taxes.
Losses of the Fund cannot be allocated to investors and are retained in the Fund for use in future years. Non-capital losses may be carried forward
up to 20 years to reduce taxable income and realized capital gains of future years. Capital losses may be carried forward indefinitely to reduce future
realized capital gains. Refer to Note 9 for the Fund’s loss carryforwards.
6. Management Fees and Operating Expenses
Mackenzie is paid a management fee for managing the investment portfolio, providing investment analysis and recommendations, making
investment decisions, making brokerage arrangements relating to the purchase and sale of the investment portfolio and making arrangements with
registered dealers for the purchase and sale of securities of the Fund by investors. The management fee is calculated on each series of securities of
the Fund as a fixed annual percentage of the daily net asset value of the series.
Each series of the Fund, except B-Series, is charged a fixed rate annual administration fee (“Administration Fee”) and in return, Mackenzie bears all
of the operating expenses of the Fund, other than certain specified fund costs. The Administration Fee is calculated on each series of securities of
the Fund as a fixed annual percentage of the daily net asset value of the series.
Other fund costs include taxes (including, but not limited to GST/HST and income tax), interest and borrowing costs, all fees and expenses of the
Mackenzie Funds’ Independent Review Committee (IRC), costs of complying with the regulatory requirement to produce Fund Facts, fees paid to
external service providers associated with tax reclaims, refunds or the preparation of foreign tax reports on behalf of the Funds, new fees related to
external services that were not commonly charged in the Canadian mutual fund industry and introduced after September 29, 2016, and the costs of
complying with any new regulatory requirements, including, without limitation, any new fees introduced after September 29, 2016.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
CANADIAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
6. Management Fees and Operating Expenses (cont’d)
All expenses relating to the operation of the Fund attributable to B-Series securities will be charged to that particular series. Operating expenses
include legal, audit, transfer agent, custodian, administration and trustee services, cost of financial reporting and Simplified Prospectus printing,
regulatory filing fees and other miscellaneous expenses specifically attributable to the B-Series securities and any applicable taxes.
Mackenzie may waive or absorb management fees and/or Administration Fees at its discretion and stop waiving or absorbing such fees at any time
without notice. Refer to Note 9 for the management fee and Administration Fee rates charged to each series of securities.
7. Fund’s Capital
The capital of the Fund, which is comprised of the net assets attributable to securityholders, is divided into different series with each series having
an unlimited number of securities. The securities outstanding for the Fund as at March 31, 2017 and 2016 and securities issued, reinvested and
redeemed for the periods are presented in the Statement of Changes in Financial Position. Mackenzie manages the capital of the Fund in accordance
with the investment objectives as discussed in Note 9.
8. Financial Instruments Risk
i. Risk exposure and management
The Fund’s investment activities expose it to a variety of financial risks, as defined in IFRS 7 Financial Instruments: Disclosures (“IFRS 7”). The
Fund’s exposure to financial risks is concentrated in its investments, which are presented in the Schedule of Investments, as at March 31, 2017,
grouped by asset type, with geographic and sector information.
Mackenzie seeks to minimize potential adverse effects of financial risks on the Fund’s performance by employing professional, experienced portfolio
advisors, by monitoring the Fund’s positions and market events daily, by diversifying the investment portfolio within the constraints of the Fund’s
investment objectives, and where applicable, by using derivatives to hedge certain risk exposures. To assist in managing risks, Mackenzie also
maintains a governance structure that oversees the Fund’s investment activities and monitors compliance with the Fund’s stated investment
strategy, internal guidelines, and securities regulations.
ii. Liquidity risk
Liquidity risk arises when the Fund encounters difficulty in meeting its financial obligations as they come due. The Fund is exposed to liquidity risk
due to potential daily cash redemptions of redeemable securities. In accordance with securities regulations, the Fund must maintain at least 90% of
its assets in liquid investments (i.e., investments that can be readily sold). In addition, the Fund retains sufficient cash and short-term investment
positions to maintain adequate liquidity. The Fund also has the ability to borrow up to 5% of its net assets for the purposes of funding redemptions.
iii. Currency risk
Currency risk arises when the fair value of financial instruments that are denominated in a currency other than the Canadian dollar, which is the
Fund’s reporting currency, fluctuates due to changes in exchange rates. Note 9 summarizes the Fund’s exposure, if applicable and significant, to
currency risk.
iv. Interest rate risk
Interest rate risk arises when the fair value of interest-bearing financial instruments fluctuates due to changes in the prevailing levels of market
interest rates. Cash and cash equivalents do not expose the Fund to significant amounts of interest rate risk. Note 9 summarizes the Fund’s
exposure, if applicable and significant, to interest rate risk.
v. Other price risk
Other price risk is the risk that the value of financial instruments will fluctuate as a result of changes in market prices (other than those arising
from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all
instruments traded in a market or market segment. All investments present a risk of loss of capital. This risk is managed through a careful selection
of investments and other financial instruments within the parameters of the investment strategies. Except for certain derivative contracts, the
maximum risk resulting from financial instruments is equivalent to their fair value. The maximum risk of loss on certain derivative contracts such as
forwards, swaps, and futures contracts is equal to their notional values. In the case of written call (put) options and short futures contracts, the loss
to the Fund continues to increase, without limit, as the fair value of the underlying interest increases (decreases). However, these instruments are
generally used within the overall investment management process to manage the risk from the underlying investments and do not typically increase
the overall risk of loss to the Fund. This risk is mitigated by ensuring that the Fund holds a combination of the underlying interest, cash cover and/or
margin that is equal to or greater than the value of the derivative contract. Note 9 summarizes the Fund’s exposure, if applicable and significant, to
other price risk.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
CANADIAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
8. Financial Instruments Risk (cont’d)
vi. Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the
Fund. Note 9 summarizes the Fund’s exposure, if applicable and significant, to credit risk.
All transactions in listed securities are executed with approved brokers. To minimize the possibility of settlement default, securities are exchanged for
payment simultaneously, where market practices permit, through the facilities of a central depository and/or clearing agency where customary.
The carrying amount of investments and other assets represents the maximum credit risk exposure as at the date of the Statement of Financial
Position.
The Fund may enter into securities lending transactions with counterparties and it may also be exposed to credit risk from the counterparties to
the derivative instruments it may use. Credit risk associated with these transactions is considered minimal as all counterparties have a designated
rating equivalent to a Standard & Poor’s credit rating of not less than A-1 (low) on their short-term debt and of A on their long-term debt, as
applicable.
vii. Underlying funds
The Fund may invest in underlying funds and may be indirectly exposed to currency risk, interest rate risk, other price risk and credit risk from
fluctuations in the value of financial instruments held by the underlying funds. Note 9 summarizes the Fund’s exposure, if applicable and significant,
to these risks from underlying funds.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
CANADIAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
9. Fund Specific Information (in ’000s, except for (a))
(a) Fund Formation and Series Information
Date of Formation
December 29, 1995
The Fund may issue an unlimited number of securities of each series. The number of issued and outstanding securities of each series is disclosed in
the Statements of Changes in Financial Position.
Series Offered by Mackenzie Financial Corporation (180 Queen Street West, Toronto, Ontario, M5V 3K1; 1-800-387-0614; www.mackenzieinvestments.com)
Series A securities are offered to retail investors investing a minimum of $500.
Series D securities are offered to retail investors investing a minimum of $500 through a discount brokerage or other account approved by Mackenzie.
Series F securities are offered to investors who are enrolled in a dealer-sponsored fee-for-service or wrap program, who are subject to an assetbased fee rather than commissions on each transaction and who invest at least $500; they are also available to employees of Mackenzie and its
subsidiaries, and directors of Mackenzie.
Series FB securities are offered to retail investors investing a minimum of $500. Investors are required to negotiate their advisor service fee, which
cannot exceed 1.50%, with their financial advisor.
Series G securities are offered to retail investors investing a minimum of $500 who are members of a group RRSP, DPSP, TFSA or pension plan.
Series I securities are offered to retail investors investing a minimum of $500 in a qualified group plan with a minimum of $20,000,000 in assets,
or investors investing a minimum of $500,000 who participate in the Portfolio Architecture Service or Open Architecture Service.
Series O securities are offered to investors investing a minimum of $500,000 who have entered into a Series O account agreement with Mackenzie,
and also available to certain qualifying employees of Mackenzie and its subsidiaries.
Series PW securities are offered through our Private Wealth Solutions to certain high net worth investors who invest a minimum of $100,000.
Series PWF securities are offered through our Private Wealth Solutions to certain high net worth investors who are enrolled in a dealer-sponsored
fee‑for‑service or wrap program, who are subject to an asset-based fee rather than commissions on each transaction and who invest at least
$100,000.
Series PWFB securities are offered through our Private Wealth Solutions to certain high net worth investors who invest a minimum of $100,000.
Investors are required to negotiate their advisor service fee, which cannot exceed 1.50%, with their financial advisor.
Series PWX securities are offered through our Private Wealth Solutions to certain high net worth investors who invest a minimum of $100,000.
Investors are required to negotiate their advisor service fee, which cannot exceed 1.50%, with their financial advisor.
Series R securities are offered only to other affiliated funds and certain institutional investors in connection with fund-of-fund arrangements.
Series S securities are offered to the Related Insurance Companies and certain other mutual funds, but may be sold to other investors as determined
by Mackenzie.
Series Distributed by Quadrus Investment Services Ltd. (255 Dufferin Ave., London, Ontario, N6A 4K1; 1-888-532-3322; www.quadrusgroupoffunds.com)
Quadrus Investment Services Ltd. (“Quadrus”) is the principal distributor of the series of securities listed below:
Quadrus Series, D5 Series and D8 Series securities are offered to investors investing a minimum of $500. Investors in D5 Series and D8 Series
securities also want to receive a regular monthly cash flow of 5% or 8% per year, respectively.
H Series and H5 Series securities are offered to investors investing a minimum of $500, who are enrolled in a Quadrus-sponsored fee-for-service or
wrap program and who are subject to an asset-based fee. Investors in H5 Series securities also want to receive a monthly cash flow of 5% per year.
L Series, L5 Series and L8 Series securities are offered to investors investing a minimum of $100,000 and who have eligible minimum total holdings
of $500,000. Investors in L5 Series and L8 Series securities also want to receive a regular monthly cash flow of 5% or 8% per year, respectively.
N Series and N5 Series securities are offered to investors investing a minimum of $100,000, who have eligible minimum total holdings of $500,000,
and who have entered into an N type series account agreement with Mackenzie and Quadrus. Investors in N5 Series securities also want to receive a
regular monthly cash flow of 5% per year.
QF Series and QF5 Series securities are offered to retail investors investing a minimum of $500. Investors are required to negotiate their advisor
service fee, which cannot exceed 1.25%, with their financial advisor. Investors in QF5 Series securities also want to receive a monthly cash flow
of 5% per year.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
NOTES TO FINANCIAL STATEMENTS
9. Fund Specific Information (in ’000s, except for (a)) (cont’d)
(a) Fund Formation and Series Information (cont’d)
An investor in the Fund may choose among different purchase options that are available under each series. These purchase options are a sales
charge purchase option, a redemption charge purchase option, various low-load purchase options and a no-load purchase option. The charges under
the sales charge purchase option are negotiated by investors with their dealers. The charges under the redemption charge and low-load purchase
options are paid to Mackenzie if an investor redeems securities of the Fund during specific periods. Not all purchase options are available under each
series of the Fund, and the charges for each purchase option may vary among the different series. For further details on these purchase options,
please refer to the Fund’s Simplified Prospectus and Fund Facts.
Net Asset Value per Security ($)
Mar. 31, 2017
Mar. 31, 2016
Series
Inception/
Reinstatement Date
Management
Fees
Administration
Fees
Series A
December 29, 1995
2.00%
0.24%
27.50
24.87
Series D
March 19, 2014
1.25%
0.19%
10.23
9.25
Series F
August 20, 2002
1.00%
0.19%
21.78
19.67
Series FB
October 26, 2015
1.00%
0.24%
10.39
9.38
Series G
March 5, 2008
1.50%
0.24%
11.94
10.79
Series I
August 11, 2005
1.35%
0.24%
14.42
13.06
Series O
April 14, 2003
–*
24.68
22.10
Series PW
October 9, 2014
1.85%
0.15%
10.08
9.12
Series PWF
January 12, 2016
0.85%
0.15%
11.40
10.30
Series PWFB
None issued
0.85%
0.15%
–
–
Series PWX
August 27, 2014
–
(1)
9.56
8.63
Series R
July 3, 2007
–*
–*
11.37
10.28
Series S
January 1, 2001
– (1)
0.025%
31.30
28.25
Quadrus Series
October 30, 1970
2.00%
0.24%
27.36
24.75
H Series
January 8, 2001
1.00%
0.19%
18.77
17.02
H5 Series
January 15, 2016
1.00%
0.19%
16.33
15.48
L Series
December 16, 2011
1.70%
0.15%
13.40
12.11
1.70%
0.15%
15.12
–
1.70%
0.15%
–
(2)
L5 Series
August 3, 2016
L8 Series
July 14, 2016
N Series
December 16, 2011
N5 Series
January 15, 2016
D5 Series
August 5, 2008
2.00%
D8 Series
February 18, 2009
QF Series
QF5 Series
*
(3)
–
(2)
14.80
–
–
(1)
14.10
12.73
–
(1)
16.41
15.52
0.24%
11.05
10.51
2.00%
0.24%
13.65
13.38
July 12, 2016
1.00%
0.24%
10.53
–
July 12, 2016
1.00%
0.24%
15.20
–
–
(1)
–
(1)
Not applicable.
(1) This fee is negotiable and payable directly to Mackenzie by investors in this series.
(2) This fee is payable directly to Mackenzie by investors in this series through redemptions of their securities.
(3) The series’ original start date was August 17, 2015. All securities in the series were redeemed on March 2, 2016. The series was reinstated at a price of $15.00 per security
on August 3, 2016.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
NOTES TO FINANCIAL STATEMENTS
9. Fund Specific Information (in ’000s, except for (a)) (cont’d)
(b) Investments by Mackenzie, Other Funds Managed by Mackenzie and Related Insurance Companies
As at March 31, 2017, Mackenzie, other funds managed by Mackenzie and Related Insurance Companies had an investment of $13, $7 and $84,981
(2016 – $7, $22,391 and $85,487), respectively, in the Fund.
(c) Loss Carryforwards
As at the last taxation year-end, there were no capital and non-capital losses available to carry forward for tax purposes.
(d) Securities Lending
The value of securities loaned and collateral received from securities lending at March 31, 2017 and 2016 were as follows:
March 31, 2017
($)
March 31, 2016
($)
Value of securities loaned
18,778
7,784
Value of collateral received
21,183
8,188
Collateral received is comprised of debt obligations of the Government of Canada and other countries, Canadian provincial and municipal
governments and financial institutions.
A reconciliation of the gross amount generated from the securities lending transactions to the security lending income to the Fund for the periods
ended March 31, 2017 and 2016 is as follows:
Percentage of
Total Amount (%)
2017
2016
Amount ($)
2017
2016
Gross Securities Lending Income
43
74
100.0
100.0
Securities Lending Agent fees
(10)
(18)
(23.3)
(24.3)
Securities Lending Income to the Fund
before Withholdings Taxes
33
56
76.7
75.7
Withholding Taxes
(2)
–
(4.7)
–
Net Securities Lending Income
31
56
72.0
75.7
(e)Commissions
The brokerage commissions paid to certain dealers included an amount of $34 (2016 – $26) that was available for payment to third party vendors
for the provision of investment decision making services. This amount represented 5.7% (2016 – 5.7%) of the total commissions and other
transaction costs paid during the period.
(f) Offsetting of Financial Assets and Liabilities
The following table presents offsetting of financial assets and liabilities and collateral amounts that would occur if future events, such as bankruptcy
or termination of contracts were to arise. No amounts were offset in the financial statements. Instruments disclosed in the table are included in the
appropriate line item on the Statements of Financial Position.
March 31, 2017
Gross amount of
assets/liabilities ($)
Amount offset ($)
Margin ($)
Net amount ($)
Unrealized gains on derivative contracts
204
(194)
–
10
Unrealized losses on derivative contracts
(380)
194
–
(186)
–
–
–
–
(176)
–
–
(176)
Liability for options written
Total
As at March 31, 2016, there were no amounts subject to offsetting.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
NOTES TO FINANCIAL STATEMENTS
9. Fund Specific Information (in ’000s, except for (a)) (cont’d)
(g) Risks Associated with Financial Instruments
i. Risk exposure and management
The Fund seeks long-term capital growth by investing primarily in Canadian equities. The Fund uses a growth style of investing and may hold up
to 49% of its assets in foreign investments.
ii. Currency risk
The table below indicates currencies to which the Fund had significant exposure as at period end in Canadian dollar terms, including the underlying
principal amount of any derivative instruments. Other financial assets and liabilities (including accrued interest and dividends receivable, and
receivables/payables for investments sold/purchased) that are denominated in foreign currencies do not expose the Fund to significant currency risk.
Currency
U.S. dollar
March 31, 2017
Cash and
Derivative
Investments
Short-Term
Instruments
($)
Investments ($)
($)
Net Exposure*
($)
54,225
30
(302)
53,953
5,725
138
1,827
7,690
11,451
–
(7,851)
3,600
Swiss franc
2,622
–
–
2,622
Australian dollar
2,130
–
–
2,130
Hong Kong dollar
1,228
–
(419)
809
Brazilian real
2,043
54
(1,993)
104
Mexican peso
–
–
(1)
(1)
Japanese yen
Euro
South Korean won
3,897
–
(3,961)
(64)
British pound
5,488
43
(9,666)
(4,135)
88,809
265
(22,366)
66,708
44.8
0.1
(11.3)
33.6
Total
% of Net Assets
Currency
March 31, 2016
Cash and
Derivative
Investments
Short-Term
Instruments
($)
Investments ($)
($)
Net Exposure*
($)
U.S. dollar
53,827
29
–
53,856
Japanese yen
12,896
–
–
12,896
Euro
8,543
11
–
8,554
British pound
7,212
–
–
7,212
Brazilian real
3,209
–
–
3,209
Swiss franc
2,921
–
–
2,921
Swedish krona
2,405
–
–
2,405
Mexican peso
Total
% of Net Assets
1,878
–
–
1,878
92,891
40
–
92,931
42.7
–
–
42.7
* Includes both monetary and non-monetary financial instruments
As at March 31, 2017, had the Canadian dollar increased or decreased by 5% relative to all foreign currencies, with all other variables held constant,
net assets would have decreased or increased by approximately $3,335 or 1.7% of total net assets (2016 – $4,647 or 2.1%). In practice, the actual
trading results may differ and the difference could be material.
MACKENZIE CANADIAN LARGE CAP GROWTH FUND
CANADIAN EQUITY FUND
ANNUAL AUDITED FINANCIAL STATEMENTS | March 31, 2017
NOTES TO FINANCIAL STATEMENTS
9. Fund Specific Information (in ’000s, except for (a)) (cont’d)
(g) Risks Associated with Financial Instruments (cont’d)
iii. Interest rate risk
As at March 31, 2017 and 2016, the Fund did not have a significant exposure to interest rate risk.
iv. Other price risk
The Fund’s most significant exposure to price risk arises from its investment in equity securities. As at March 31, 2017, had the prices on the
respective stock exchanges for these securities increased or decreased by 10%, with all other variables held constant, net assets would have
increased or decreased by approximately $19,566 or 9.9% of total net assets (2016 – $21,271 or 9.8%). In practice, the actual trading results may
differ and the difference could be material.
v. Credit risk
As at March 31, 2017 and 2016, the Fund did not have a significant exposure to credit risk.
(h) Fair Value Classification
The table below summarizes the fair value of the Fund’s financial instruments using the following fair value hierarchy:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
Level 3 – Inputs that are not based on observable market data.
The inputs are considered observable if they are developed using market data, such as publicly available information about actual events or
transactions, and that reflect the assumption that market participants would use when pricing the asset or liability.
Equities
Derivative assets
Derivative liabilities
Short-term investments
Total
Level 1
($)
195,660
–
–
–
195,660
March 31, 2017
Level 2
Level 3
($)
($)
–
–
519
–
(848)
–
2,017
–
1,688
–
Total
($)
195,660
519
(848)
2,017
197,348
Level 1
($)
212,705
–
–
–
212,705
March 31, 2016
Level 2
Level 3
($)
($)
–
–
–
–
–
–
2,119
–
2,119
–
Total
($)
212,705
–
–
2,119
214,824
The Fund’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances
that caused the transfer.
In accordance with the Fund’s valuation policy, the Fund applies fair value adjustment factors to the quoted market prices for non-North American
equities when North American intraday stock market movements exceed pre-determined tolerances. The adjustment factors are applied in order to
estimate the impact on fair values of events occurring between the close of the non-North American stock markets and the close of business for
the Fund. If fair value adjustment factors are applied, non-North American equities are classified as Level 2. Consequently, during the period ended
March 31, 2017, non-North American equities frequently transferred between Level 1 (unadjusted quoted market prices) and Level 2 (adjusted
market prices). As at March 31, 2017, these securities were classified as Level 1 (2016 – Level 1).
Financial instruments classified as level 2 investments are valued through incorporating observable market data and using standard market
convention practices. Short-term investments classified as level 2 investments are valued based on amortized cost plus accrued interest which
closely approximates fair value.