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PURPOSE TACTICAL INVESTMENT GRADE BOND FUND PURPOSE MONTHLY COMMENTARY AND REBALANCE UPDATE FUND DETAILS TOP HOLDINGS ETF Series Ticker Symbol: FundSERV Series Codes: BND Series A - PFC 2100 Series F - PFC 2101 Management Fee: 0.35% Series A Trailer Fee: 0.50% Distribution Frequency: Monthly Distribution Type: Inception Date: Interest Income & Capital Gains October 28, 2015 PORTFOLIO REBALANCING Duration Management: Tactical Rebalance Frequency: Quarterly Currency Hedged: − − − − Yes FUND COMMENTARY The Fund was slightly negative in January as investment grade bonds declined in current interest rate environment guided by a hawkish Fed and dovish Bank of Canada. Canadian bonds provided negative returns while U.S. corporate bonds remained largely flat, and U.S. high yield was the largest detractor. The Fund hedged duration risk by using Canadian 10Yr Treasury Futures and U.S. 10Yr Treasury options in January. The Canadian interest rate hedge ended in a small benefit to the Fund while the U.S. hedge position detracted significantly. Energy and high yield were the worst performing sectors as credit spreads further widened on conflicting global growth patterns and investors continued to flock to the safety of U.S. 10Yr treasuries. AS OF 1/31/16 NAME DURATION CASH YIELD WEIGHT Canadian Corporate Bonds - Top 10 Hydro One Inc 10.91 5.02% 2.25% Toyota Credit Canada Inc 4.11 2.03% 2.01% Bell Canada 10.25 5.76% 1.98% Bank of Montreal 4.79 3.19% 1.94% 1.93% Loblaw Cos Ltd 10.93 5.31% Bank of Nova Scotia 4.60 3.10% 1.92% Toronto-Dominion Bank 7.50 3.08% 1.91% TransCanada Pipelines Ltd 8.17 3.36% 1.89% TELUS Corp 7.51 3.66% 1.87% Royal Bank of Canada 4.72 2.75% 1.86% 1.39% U.S. Corporate Bonds - Top 10 Verizon Communications Inc 6.35 4.65% Wells Fargo & Co 9.19 4.18% 1.29% Wal-Mart Stores Inc 6.35 2.54% 1.26% Duke Energy Ohio Inc 6.39 3.56% 1.01% Oracle Corp 8.12 3.01% 0.92% PepsiCo Inc 6.41 2.70% 0.83% Bank of America Corp 7.70 4.04% 0.83% QUALCOMM Inc 7.95 3.54% 0.82% United Parcel Service Inc 4.62 2.97% 0.82% Morgan Stanley 8.46 4.32% 0.82% 4.33 7.07 9.31% U.S. High Yield Bonds High Yield US Corporate Bond Hedged to CAD Index ETF Cash Cash 6.93% SECTOR BREAKDOWN AS OF 1/31/16 SECTOR NAME WEIGHT Financials 20.02% Consumer Discretionary 12.24% Energy 11.74% Industrials 10.41% High Yield 9.31% Telecommunication Services 9.02% Consumer Staples 8.73% Utilities 5.72% Information Technology 2.76% Health Care 1.63% Materials 0.79% Real Estate 0.70% Cash 6.93% Total 100.00% PURPOSEINVEST.COM PURPOSE TACTICAL INVESTMENT GRADE BOND FUND PORTFOLIO STATISTICS DURATION & YIELD BREAKDOWN AS OF 1/31/16 AS OF 1/31/16 Yield to Maturity (%) 3.37% Coupon (%) 3.95% Term (yrs) 7.21 Duration (yrs) 4.46 PURPOSE INVESTMENTS NOTIONAL EXPOSURE DURATION CONTRIBUTION CASH YIELD Portfolio Gross 93.07% 5.74 3.72% Short Call Options (U.S. 10 Yr Treas) -21.94% -1.28 0.18% 0.00% 0.00 0.00% 4.46 3.90% Short Futures (CAD 10Yr Fut) Fund RATINGS BREAKDOWNS1 AS OF 1/31/16 RATING WEIGHT AAA 1.84% AA 15.02% A 34.30% BBB 32.63% BB 3.60% B 4.25% CCC or below 1.43% Other 0.00% Cash 6.93% Total 100.00% MATURITY BREAKDOWNS AS OF 1/31/16 TERM WEIGHT 0 Years 6.93% 0 - 1 Year 0.00% 1 - 5 Years 27.36% 5 - 10 Years 51.94% 10 - 30 Years 13.77% Other 0.00% Total 100.00% INCOME BREAKDOWN AS OF 1/31/16 Bond Cash Yield (%) Option Strategy 3.72% ON Approximate Option Strategy Yield 0.18% Portfolio Cash Yield (%) 3.90% FIXED INCOME SECTOR BREAKDOWNS AS OF 1/31/16 FISB SECTOR WEIGHT Canadian Corporate Bonds 61.83% U.S. Corporate Bonds 21.93% High Yield Bonds Ratings source: FTSE TMX Global Debt Capital Markets and Standard and Poor’s, as applicable. Commissions, trailing commissions, management fees and expenses all may be associated with investment fund investments. The prospectus contains important detailed information about the investment fund. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share/unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. As with any investment, there are risks to investing in investment funds. There is no assurance that any fund will achieve its investment objective, and its net asset value, yield, and investment return will fluctuate from time to time with market conditions. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. The opinions expressed are provided by the portfolio manager responsible for the management of the Fund’s investment portfolio, as specified in the Fund’s prospectus. Unless otherwise stated, the source for data cited in any commentary is the portfolio manager. Nothing in any commentary should be considered a recommendation to buy or sell a particular security. The Fund may sell these securities at any time, or purchase securities that have previously been sold. The securities may increase or decrease in value after the date hereof, and the Fund may accordingly gain or lose money on the investment in the securities. The statements by the portfolio managers in their commentaries are intended to illustrate their approach in managing the funds, and do not necessarily reflect the views of Purpose Investments Inc. 1 9.31% Cash 6.93% Total 100.00% PURPOSE 130 Adelaide St. W Suite 1700 P.O. Box 83 Toronto, ON M5H 3P5 T: 416-583-3850 TF: 877-789-1517 F: 416-583-3851 www.purposeinvest.com [email protected]