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Transcript
IA Clarington Investments Inc. Simplified Prospectus June 20, 2017 Offering Series A, Series B, Series B5, Series DA, Series DF, Series E, Series E4, Series E5, Series E6, Series EX, Series EX5, Series EX6, Series F, Series F4, Series F5, Series F6, Series F8, Series F10, Series FE, Series FE4, Series FE5, Series FE6, Series FX, Series FX5, Series FX6, Series FX8, Series I, Series L, Series L4, Series L5, Series L6, Series L8, Series L10, Series LM, Series M, Series O, Series P, Series P4, Series P5, Series P6, Series T4, Series T5, Series T6, Series T8, Series T10, Series V, Series X and Series Y units or shares as indicated below: Money Market Funds IA Clarington Money Market Fund (Series A, B, DA, DF, F, I, L, O and X) Fixed Income Funds IA Clarington Bond Fund (Series A, F, I, L, O and X) IA Clarington Core Plus Bond Fund (Series A, E, E4, F, F4, FE, FE4, I, L, L4, O, P, P4 and T4) IA Clarington Inhance Bond SRI Fund (Series B, E, F, FE and I) IA Clarington Real Return Bond Fund (Series A, F, I, L and O) IA Clarington Short-Term Bond Fund (Series A, F and I) IA Clarington Short-Term Income Class* (Series A) IA Clarington Strategic Corporate Bond Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O, P, P5 and T5) IA Clarington Strategic Corporate Bond Class* (Series A, E, E5, F, F5, L, L5 and T5) IA Clarington Tactical Bond Fund (Series A, F, I, L and O) IA Clarington Tactical Bond Class* (Series A, F, F5, L, L5 and T5) Floating Rate Debt Funds IA Clarington Floating Rate Income Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, P, P5 and T5) IA Clarington U.S. Dollar Floating Rate Income Fund (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5 and T5) Diversified Income Funds IA Clarington Inhance Monthly Income SRI Fund (Series E6, F6, FE, FE6, I, L6, O, P6, T6 and V) IA Clarington Monthly Income Balanced Fund (Series A, E, E6, F, F6, F8, I, L, L6, O, T6 and T8) IA Clarington Strategic Income Fund (Series A, E, E6, EX, EX6, F, F6, F8, I, L, L6, L8, O, P, P6, T6, T8 and Y) IA Clarington Strategic Income Class* (Series A, E, E6, F, F6, F8, L, L6, L8, T6 and T8) IA Clarington Tactical Income Fund (Series A, E, E6, EX, EX6, F, F6, F8, FE, FE6, FX, FX6, FX8, I, L, L6, L8, O, P, P6, T6, T8 and X) IA Clarington Tactical Income Class* (Series A, E, E6, F, F6, F8, L, L6, L8, T6 and T8) IA Clarington Yield Opportunities Fund (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5 and T5) Canadian Balanced Funds IA Clarington Canadian Balanced Fund (Series A, E, E5, F, F5, FE, FE5, FX, FX5, I, L, L5, O, P, P5 and T5) IA Clarington Canadian Balanced Class* (Series A, E, E5, EX, EX5, F, F5, FE, FE5, FX, FX5, L, L5, P, P5 and T5) IA Clarington Focused Balanced Fund (Series A, E, E5, EX, EX5, F, F5, FE, FE5, I, L, L5, O, P, P5 and T5) IA Clarington Focused Balanced Class* (Series A, E, E5, F, F5, L, L5 and T5) IA Clarington Growth & Income Fund (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5 and T5) IA Clarington Inhance Balanced SRI Portfolio (Series A, E, E6, F, F6, FE, FE6, I, L, L6, O and T6) IA Clarington Inhance Conservative SRI Portfolio (Series E6, F6, FE6, L6 and T6) IA Clarington Inhance Growth SRI Portfolio (Series A, E, F, FE, L and V) Canadian Equity Funds IA Clarington Canadian Conservative Equity Fund (Series A, F, F5, I, L, L5, O and T5) IA Clarington Canadian Conservative Equity Class* (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5 and T5) IA Clarington Canadian Dividend Fund (Series A, F, F6, I, T6 and X) IA Clarington Canadian Growth Class* (Series A, F, I and O) IA Clarington Canadian Leaders Class* (Series A, F, I, L and O) IA Clarington Canadian Small Cap Fund (Series A, E, F, FE, I, L, O and P) IA Clarington Canadian Small Cap Class* (Series A, E, F, FE and P) IA Clarington Dividend Growth Class* (Series A, E, E6, F, F6, F10, FE, FE6, I, L6, L10, O, P, P6, T6 and T10) IA Clarington Focused Canadian Equity Class* (Series A, E, E5, EX, EX5, F, F5, FE, FE5, I, L, L5, O, P, P5 and T5) IA Clarington Inhance Canadian Equity SRI Class* (Series A, E, F, FE, I, L and V) IA Clarington North American Opportunities Class* (Series A, E, F, FE, I, L and P) IA Clarington Strategic Equity Income Fund (Series A, E, E6, F, F6, I, L, L6, O, T6 and Y) IA Clarington Strategic Equity Income Class* (Series A, E, E6, F, F6, FE, FE6, L, L6, L8, P, P6, T6 and T8) Global & U.S. Balanced Funds IA Clarington Global Growth & Income Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, P, P5 and T5) IA Clarington Global Tactical Income Fund (Series A, E, E6, F, F6, F8, FE, FE6, I, L, L6, L8, O, P, P6, T6 and T8) IA Clarington Global Tactical Income Class* (Series A, F, F6, F8, L, L6, L8, T6 and T8) IA Clarington Strategic U.S. Growth & Income Fund (Series A, E, E6, F, F6, FE, FE6, I, L, L6, L8, O, P, P6, T6 and T8) Global Equity Funds IA Clarington Global Equity Fund (Series A, E, F, F6, FE, L, L6, I, O, P, T6 and T8) IA Clarington Global Opportunities Fund (Series A, E, F, I, L and O) IA Clarington Global Opportunities Class* (Series A, E, EX, F, FE, L, P, T6 and T8) IA Clarington Global Value Fund (Series A, E, F, F6, FE, I, L, L6, O, P and T6) IA Clarington Inhance Global Equity SRI Class* (Series A, E, F, FE, I, L and V) U.S. Equity Funds IA Clarington Focused U.S. Equity Class* (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O, P, P5 and T5) IA Clarington Sarbit Activist Opportunities Class* (Series A, E, F, FE, I and P) IA Clarington Sarbit U.S. Equity Fund (Series A, E, F, F6, FE, I, L, L6, O, P and T6) IA Clarington Sarbit U.S. Equity Class (Unhedged)* (Series A, E, F, F6, FE, L, L6, P and T6) IA Clarington U.S. Dividend Growth Fund (Series A, E, F, F6, FE, I, L, L6, O, P and T6) IA Clarington U.S. Dividend Growth Registered Fund (Series A, E, F, FE, L and P) Distinction Portfolios Distinction Balanced Class* (Series A, I, L, LM, M and O) Distinction Bold Class* (Series A, I, M and O) Distinction Conservative Class* (Series A, I, L, LM, M and O) Distinction Growth Class* (Series A, I, L, LM, M and O) Distinction Prudent Class* (Series A, I, M and O) Managed Portfolios IA Clarington Balanced Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) IA Clarington Conservative Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) IA Clarington Growth Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) IA Clarington Maximum Growth Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) IA Clarington Moderate Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) Forstrong Funds Forstrong Global Strategist Balanced Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O and T5) Forstrong Global Strategist Growth Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O and T5) Forstrong Global Strategist Income Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O and T5) *each a class of shares of Clarington Sector Fund Inc. (collectively, the “Funds”) No securities regulatory authority has expressed an opinion about the merits of the Funds’ securities and it is an offence to claim otherwise. The Funds and the securities of the Funds offered under this Simplified Prospectus are not registered with the United States Securities and Exchange Commission and they are sold in the United States only in reliance on exemptions from registration. IA Clarington Investments Inc. also offers the IA Clarington Target Click Funds and other IA Clarington mutual funds which are described in separate simplified prospectuses and annual information forms. Table of Contents Page No. Introduction............................................................................................................................................. 1 What is a Mutual Fund and What are the Risks of Investing in a Mutual Fund? ........................... 4 What is a Mutual Fund? ........................................................................................................................ 4 How is a Mutual Fund Structured? ....................................................................................................... 4 What are the General Risks of Investing in Mutual Funds? ................................................................. 5 Different Mutual Funds have Different Risks ...................................................................................... 5 What are the Specific Risks Associated with Mutual Funds? .............................................................. 5 Organization and Management of the Funds .................................................................................... 12 Companies that Work with the Funds ................................................................................................ 12 Fund of Funds ..................................................................................................................................... 14 Certain Changes without Securityholder Approval ............................................................................ 14 Purchases, Switches and Redemptions ............................................................................................... 14 Valuation of a Fund ............................................................................................................................ 14 Foreign Currencies.............................................................................................................................. 15 Series of Securities ............................................................................................................................. 15 How to Purchase Funds ...................................................................................................................... 18 Switching Securities of the Funds ...................................................................................................... 21 How to Redeem Funds........................................................................................................................ 22 Short-Term Trading Fees .................................................................................................................... 25 Optional Services .................................................................................................................................. 25 Pre-Authorized Chequing Plan ........................................................................................................... 25 Systematic Withdrawal Plan ............................................................................................................... 26 Systematic Switch Plan....................................................................................................................... 26 IA Clarington Elite Program ............................................................................................................... 26 Redirected Distributions and Dividends ............................................................................................. 26 Registered Plans.................................................................................................................................. 27 Dollar-Cost Averaging Service........................................................................................................... 27 Fees and Expenses................................................................................................................................. 27 Fees and Expenses Payable by the Funds ........................................................................................... 28 Fees and Expenses Payable Directly by You ..................................................................................... 35 Impact of Sales Charges ..................................................................................................................... 39 Dealer Compensation ........................................................................................................................... 40 Sales Commissions ............................................................................................................................. 40 Trailer Fees ......................................................................................................................................... 40 Dealer Advisor Fee ............................................................................................................................. 42 Dealer Service Fee .............................................................................................................................. 42 Other Sales Incentives ........................................................................................................................ 42 Equity Interests ................................................................................................................................... 42 Dealer Compensation from Management Fees .................................................................................. 42 i Income Tax Considerations for Investors .......................................................................................... 42 When You Earn Income ..................................................................................................................... 43 Adjusted Cost Base ............................................................................................................................. 43 Key Tax Differences Between Corporate Class Funds and Trust Funds ........................................... 43 Trust Funds ......................................................................................................................................... 44 Corporate Class Funds ........................................................................................................................ 45 All Funds ............................................................................................................................................ 46 What Are Your Legal Rights? ............................................................................................................. 47 Specific Information about Each of the Mutual Funds Described in this Document .................... 48 Fund Specific Information ................................................................................................................... 48 IA Clarington Money Market Fund .................................................................................................... 52 IA Clarington Bond Fund ................................................................................................................... 55 IA Clarington Core Plus Bond Fund .................................................................................................. 59 IA Clarington Inhance Bond SRI Fund .............................................................................................. 64 IA Clarington Real Return Bond Fund ............................................................................................... 68 IA Clarington Short-Term Bond Fund ............................................................................................... 71 IA Clarington Short-Term Income Class ............................................................................................ 74 IA Clarington Strategic Corporate Bond Fund ................................................................................... 76 IA Clarington Strategic Corporate Bond Class .................................................................................. 81 IA Clarington Tactical Bond Fund ..................................................................................................... 85 IA Clarington Tactical Bond Class ..................................................................................................... 89 IA Clarington Floating Rate Income Fund ......................................................................................... 92 IA Clarington U.S. Dollar Floating Rate Income Fund ...................................................................... 98 IA Clarington Inhance Monthly Income SRI Fund .......................................................................... 104 IA Clarington Monthly Income Balanced Fund ............................................................................... 108 IA Clarington Strategic Income Fund............................................................................................... 113 IA Clarington Strategic Income Class .............................................................................................. 119 IA Clarington Tactical Income Fund ................................................................................................ 123 IA Clarington Tactical Income Class ............................................................................................... 129 IA Clarington Yield Opportunities Fund .......................................................................................... 133 IA Clarington Canadian Balanced Fund ........................................................................................... 138 IA Clarington Canadian Balanced Class .......................................................................................... 143 IA Clarington Focused Balanced Fund............................................................................................. 147 IA Clarington Focused Balanced Class ............................................................................................ 152 IA Clarington Growth & Income Fund ............................................................................................ 156 IA Clarington Inhance Balanced SRI Portfolio ................................................................................ 161 IA Clarington Inhance Conservative SRI Portfolio .......................................................................... 165 IA Clarington Inhance Growth SRI Portfolio ................................................................................... 168 IA Clarington Canadian Conservative Equity Fund ......................................................................... 171 IA Clarington Canadian Conservative Equity Class ........................................................................ 175 IA Clarington Canadian Dividend Fund ........................................................................................... 179 IA Clarington Canadian Growth Class ............................................................................................. 183 IA Clarington Canadian Leaders Class............................................................................................. 186 IA Clarington Canadian Small Cap Fund ......................................................................................... 189 IA Clarington Canadian Small Cap Class ........................................................................................ 192 IA Clarington Dividend Growth Class ............................................................................................. 195 ii IA Clarington Focused Canadian Equity Class ................................................................................ 200 IA Clarington Inhance Canadian Equity SRI Class .......................................................................... 205 IA Clarington North American Opportunities Class ........................................................................ 209 IA Clarington Strategic Equity Income Fund ................................................................................... 213 IA Clarington Strategic Equity Income Class .................................................................................. 218 IA Clarington Global Growth & Income Fund................................................................................. 222 IA Clarington Global Tactical Income Fund .................................................................................... 227 IA Clarington Global Tactical Income Class .................................................................................... 232 IA Clarington Strategic U.S. Growth & Income Fund ..................................................................... 236 IA Clarington Global Equity Fund ................................................................................................... 241 IA Clarington Global Opportunities Fund ........................................................................................ 245 IA Clarington Global Opportunities Class ....................................................................................... 248 IA Clarington Global Value Fund .................................................................................................... 252 IA Clarington Inhance Global Equity SRI Class .............................................................................. 256 IA Clarington Focused U.S. Equity Class ........................................................................................ 260 IA Clarington Sarbit Activist Opportunities Class ........................................................................... 265 IA Clarington Sarbit U.S. Equity Fund ............................................................................................ 269 IA Clarington Sarbit U.S. Equity Class (Unhedged) ........................................................................ 273 IA Clarington U.S. Dividend Growth Fund...................................................................................... 277 IA Clarington U.S. Dividend Growth Registered Fund ................................................................... 281 Distinction Balanced Class ............................................................................................................... 285 Distinction Bold Class ...................................................................................................................... 289 Distinction Conservative Class ......................................................................................................... 292 Distinction Growth Class .................................................................................................................. 296 Distinction Prudent Class ................................................................................................................. 300 IA Clarington Balanced Portfolio ..................................................................................................... 303 IA Clarington Conservative Portfolio ............................................................................................... 308 IA Clarington Growth Portfolio........................................................................................................ 313 IA Clarington Maximum Growth Portfolio ...................................................................................... 318 IA Clarington Moderate Portfolio .................................................................................................... 323 Forstrong Global Strategist Balanced Fund ...................................................................................... 328 Forstrong Global Strategist Growth Fund ........................................................................................ 333 Forstrong Global Strategist Income Fund......................................................................................... 338 iii Introduction This Simplified Prospectus contains selected important information to help you make an informed investment decision and to help you understand your rights as an investor. Throughout this document: “ACB” refers to adjusted cost base as described on page 43, “Administration Fee” refers to the fixed rate administration fee described on page 30 under the subheading “Operating Expenses”, “Advisor Service Charge Option” refers to the Series L Securities purchase option of a Fund as described on page 20, “Corporate Class Fund” refers to a Fund that is a separate class of CSFI as denoted by “Class” at the end of its name, “CRA” refers to the Canada Revenue Agency, “CSFI” refers to Clarington Sector Fund Inc., “Dealer Advisor Fee” refers to an annual fee you may pay to your dealer for Series F and FE Securities as described on page 37, “Dealer Service Fee” refers to an annual fee you may pay to your dealer for Series P Securities as described on page 36, “Deferred Sales Charge Option” refers to a purchase option of a Fund as described on page 20, “Dollar-Cost Averaging Service” refers to an optional service described on page 27, “DSC Securities” refers to Securities purchased under the Deferred Sales Charge Option, “Eligible Account” or “Eligible Accounts” refers to an account or accounts held by you (the investor), your spouse and your dependent minors residing at the same address as you, as well as related corporate accounts, subject to our approval, “Eligible Holding” or “Eligible Holdings” refers to an investment or investments in any series of any IA Clarington Fund, other than (i) Series I or Series O of any IA Clarington Fund, (ii) the Target Click Funds, (iii) IA Clarington Money Market Fund, (iv) IA Clarington Short-Term Income Class, (v) Series V of any of IA Clarington Inhance Monthly Income SRI Fund, IA Clarington Inhance Canadian Equity SRI Class, IA Clarington Inhance Global Equity SRI Class, IA Clarington Inhance Growth SRI Portfolio and (vi) Series F of IA Clarington Bond Fund, “ETF” refers to an exchange traded fund, the securities of which qualify as index participation units under NI 81-102, “Forstrong Funds” refers to Forstrong Global Strategist Balanced Fund, Forstrong Global Strategist Growth Fund and Forstrong Global Strategist Income Fund, all mutual funds offered by IA Clarington under this simplified prospectus, “Free Redemption Amount” refers to the redemption amount allowable before a redemption fee is charged, “Front End Option” refers to the purchase option of a Fund as described on page 20, “Front End Securities” refers to Securities purchased under the Front End Option, “Fund Costs” refers to the costs payable by a Fund as described on page 31. “Funds” refers to the mutual funds offered by IA Clarington under this simplified prospectus, 1 “Global Funds” refers to IA Clarington Global Tactical Income Fund, IA Clarington Global Tactical Income Class, IA Clarington Strategic U.S. Growth & Income Fund, IA Clarington Global Equity Fund, IA Clarington Global Opportunities Fund, IA Clarington Global Growth & Income Fund, IA Clarington Global Opportunities Class, IA Clarington Global Value Fund and IA Clarington Inhance Global Equity SRI Class, “Gold ETFs” refers to certain exchanged-traded funds that seek to provide daily results that replicate the performance of gold or the value of a specified derivative, the underlying interest of which is gold, on an unlevered basis, “IA Clarington Funds” refers collectively to the Funds, the Target Click Funds, the IA Clarington Global Equity Exposure Fund and other mutual funds managed by IA Clarington and offered under separate simplified prospectuses, “Industrial Alliance” refers to Industrial Alliance Insurance and Financial Services Inc., “Inhance SRI Funds” refers to IA Clarington Inhance Bond SRI Fund, IA Clarington Inhance Monthly Income SRI Fund, IA Clarington Inhance Canadian Equity SRI Class, IA Clarington Inhance Global Equity SRI Class, IA Clarington Inhance Conservative SRI Portfolio, IA Clarington Inhance Balanced SRI Portfolio and IA Clarington Inhance Growth SRI Portfolio “Leveraged ETFs” refers to certain exchange-traded funds which seek to provide daily results that replicate the daily performance of a specified widely-quoted market index by a multiple of up to 200% or an inverse multiple up to 200%, “Leveraged Gold ETFs” refers to certain exchange-traded funds that seek to provide daily results that replicate the performance of gold or the value of a specified derivative, the underlying interest of which is gold on an unlevered basis, by a multiple of 200%, “Low Load Option” refers to a purchase option of a Fund as described on page 20, “Low Load Securities” refers to Securities purchased under the Low Load Option, “Managed Portfolios” refers IA Clarington Balanced Portfolio, IA Clarington Conservative Portfolio, IA Clarington Growth Portfolio, IA Clarington Maximum Growth Portfolio, and IA Clarington Moderate Portfolio, all mutual funds offered by IA Clarington under this simplified prospectus, “Money Market Funds”, “Fixed Income Funds”, “Floating Rate Debt Funds”, “Diversified Income Funds”, “Canadian Balanced Funds”, “Canadian Equity Funds”, “Global & U.S. Balanced Funds”, “Global Equity Funds”, “U.S. Equity Funds”, “Distinction Portfolios”, “Managed Portfolios” and “Forstrong Funds” are categories of Funds listed on the front cover, “Monthly Distribution Series” refers to the series listed on page 17 which target a monthly distribution amount, “NAV” refers to the net asset value of a Fund, “NI 81-102” refers to National Instrument 81-102-Investment Funds, as amended from time to time, “Operating Expenses” refers to the expenses of a Fund, other than Fund Costs, paid by IA Clarington, “PAC Plan” refers to the Pre-Authorized Chequing Plan as described on page 25, “Qualified Account” refers to the following type of account: Registered Retirement Savings Plan (“RRSP”), Registered Retirement Income Fund (“RRIF”), Locked-in Retirement Account (“LIRA”), Locked-in Retirement Savings Plan (“LRSP”), Restricted Locked-in Savings Plan (“RLSP”), Life Income Fund (“LIF”), Locked-in Retirement Income Fund (“LRIF”), Restricted Life Income Fund (“RLIF”) and/or Prescribed Income Retirement Fund (“PRIF”), registered pension plans, deferred profit sharing plans and other accounts as may be permitted by the Manager from time to time, 2 “Qualified Investor” refers to an investor who is a Canadian or U.S. resident who is the holder of a Qualified Account, “Reference Fund(s)” refers to a mutual fund or funds in which another mutual fund invests, or the performance of which is replicated by another mutual fund, “Registered Plans” refers to the following plans: RRSP, RRIF, LIRA, LRSP, RLSP, LIF, LRIF, RLIF, PRIF, Registered Education Savings Plan (“RESP”), and Tax-Free Savings Account (“TFSA”), “Security” or “Securities” refers to the units of the Trust Funds and the shares of the Corporate Class Funds, “securities lending transaction” refers to a transaction where the Fund loans portfolio securities to a third party for a fee and can demand the return of the securities at any time. While the securities are on loan, the borrower provides the Fund with collateral consisting of cash and/or securities. “Securityholder” refers to an investor in one or more of the Trust Funds or the Corporate Class Funds, “socially responsible investment principles” or “SRI principles” mean the investment principles described on page 48, “Target Click Funds” refers to IA Clarington Target Click 2020 Fund, IA Clarington Target Click 2025 Fund and IA Clarington Target Click 2030 Fund, all mutual funds offered by IA Clarington under a separate simplified prospectus, “Tax Act” refers to the Income Tax Act, R.S.C., 1985, c.1, as amended from time to time, “Transfer Funds” refers to IA Clarington Strategic Corporate Bond Fund, IA Clarington Strategic Income Fund, IA Clarington Strategic Equity Income Fund, IA Clarington Tactical Income Fund, IA Clarington Global Tactical Income Fund, IA Clarington Canadian Balanced Fund, IA Clarington Canadian Balanced Class, IA Clarington Canadian Conservative Equity Fund, IA Clarington Canadian Conservative Equity Class, IA Clarington Focused Balanced Fund, IA Clarington Focused Canadian Equity Class, IA Clarington Global Opportunities Fund, IA Clarington Global Opportunities Class, IA Clarington Sarbit U.S. Equity Fund, IA Clarington Sarbit U.S. Equity Class (Unhedged), IA Clarington Sarbit Activist Opportunities Class and IA Clarington Dividend Growth Class (Series F6 and T6) into which Series DA or Series DF units of IA Clarington Money Market Fund are switched on an automatic basis under the Dollar-Cost Averaging Service, “Trust Fund” refers to a Fund that is a mutual fund trust, “Underlying ETFs” refers to Leveraged ETFs, Gold ETFs and Leveraged Gold ETFs, “we”, “us”, “our”, “IA Clarington” or the “Manager” refers to IA Clarington Investments Inc., and “you” refers to everyone who invests in our Funds, This document is divided into two parts: pages 1 to 51 contain general information applicable to all of the Funds, and pages 52 to 342 contain specific information about each Fund described in this document. Additional information about each Fund is available in the following documents: the Annual Information Form, the most recently filed Fund Facts, the most recently filed annual financial statements, any interim financial report filed after those annual financial statements, the most recently filed annual management report of fund performance, and 3 any interim management report of fund performance filed after that annual management report of fund performance. These documents are incorporated by reference into this simplified prospectus, which means that they legally form part of this document just as if they were printed as part of this document. You can get a copy of these documents, at your request and at no cost, by calling us toll free at 1-800-530-0204 or from your dealer. Some of these documents are also available on IA Clarington’s Internet site at www.iaclarington.com or by contacting the Funds at [email protected]. These documents and other information about the Funds are also available at www.sedar.com. What is a Mutual Fund and What are the Risks of Investing in a Mutual Fund? What is a Mutual Fund? A mutual fund is a pool of money contributed by investors with similar investment objectives. Investors in the mutual fund share the income, expenses, gains and losses that the mutual fund makes on its investments according to the amount of the mutual fund they own. There are several benefits to investing in a mutual fund as opposed to investing by yourself. An investment in a mutual fund gives you the opportunity to participate with other investors with similar investment objectives in professionally managed investment portfolios. Professional portfolio managers make the investment decisions for the mutual fund in accordance with its investment objectives. Mutual funds also enable you to diversify your investment portfolio, which may be difficult for most individual investors to achieve. How is a Mutual Fund Structured? Trust or Corporation A mutual fund may be set up as a trust or a corporation. At IA Clarington, we have both types. Each Trust Fund is an open-ended mutual fund trust governed by a master declaration of trust under the laws of Ontario. The property and investments of the Trust Funds are held in trust by IA Clarington as trustee. There is no limit to the number of units of a Trust Fund you can buy. Each Corporate Class Fund is a separate class of CSFI. CSFI is a mutual fund corporation amalgamated under the laws of Ontario. Corporate Class Funds are primarily suitable for taxable investors, as they offer certain tax deferral benefits. See “Income Tax Considerations for Investors” on page 42 for more information. Series of Securities Most of the Funds issue Securities in more than one series. A series of Securities may be viewed as a subdivision of the Fund for certain purposes (e.g. calculation of fees), but for other purposes (e.g. investment activity) the Fund remains undivided. See “Purchases, Switches and Redemptions – Series of Securities” on page 15 for more information. Many of the Funds offer Series A Securities. In addition, the Funds may also offer Series B, Series B5, Series E, Series E4, Series E5, Series E6, Series EX, Series EX5, Series EX6, Series F, Series F4, Series F5, Series F6, Series F8, Series F10, Series FE, Series FE4, Series FE5, Series FE6, Series FX, Series FX5, Series FX6, Series FX8, Series I, Series L, Series LM, Series L4, Series L5, Series L6, Series L8, Series L10, Series M, Series O, Series P, Series P4, Series P5, Series P6, Series T4, Series T5, Series T6, Series T8, Series T10, Series V, Series X and Series Y Securities. IA Clarington Money Market Fund also offers Series DA and Series DF units. Throughout this document, unless we specify otherwise, all references to Series B Securities include Series B or Series B5 units or shares, all references to Series E Securities include Series E, Series E4, Series E5, Series E6, Series EX, Series EX5, Series EX6 units or shares, all references to Series F Securities include Series F, Series F4, Series F5, Series F6, Series F8, Series F10 Series FX, Series FX5, Series FX6, Series FX8 units or shares, all references to Series FE Securities include, Series FE, Series FE4, Series FE5, Series FE6 units or shares, all references to Series L Securities include Series L, Series LM, Series L4, Series L5, Series L6, Series L8 and Series L10 units or shares, all references to Series P Securities include Series P, Series P4, Series P5 and Series 4 P6 units or shares and all references to Series T Securities include Series T4, Series T5, Series T6, Series T8, Series T10 and Series Y units or shares. What are the General Risks of Investing in Mutual Funds? Mutual funds own different types of investments, depending upon their investment objectives. The value of these investments will change from day to day, reflecting changes in interest rates, economic conditions and market and company news. As a result, the value of a mutual fund’s Securities may go up and down and the value of your investment in a mutual fund may be more or less when you redeem it than when you purchased it. Securities held by a Fund that are traded on a public exchange are generally valued based on their most recent closing sale price. If the price is not available or if the price is not a true reflection of the value of the security, we will use another method to determine the value. This practice is called fair value pricing. It may happen for many reasons, including when the value is affected by events that occur after a market where the security is principally traded has closed or when there has been minimal or infrequent trading in a security. We use fair value pricing for all non-North American equity securities held by any of the Global Funds to avoid stale prices being used in calculating the net asset value of the Funds. The full amount of your investment in any of the Funds is not guaranteed. Unlike bank accounts or GICs, mutual fund securities are not covered by the Canada Deposit Insurance Corporation or any other government deposit insurer. Under exceptional circumstances, a mutual fund may suspend redemptions. Please see “Purchases, Switches and Redemptions” on page 14 for more information. Investing in mutual funds, like any other investment, may be subject to cyber security risks. Cyber security risk is the risk of harm, loss and liability resulting from a failure or breach of an organization’s information technology systems. Cyber security risks have the ability to negatively impact the Funds and the securityholders of the Funds by, among other things, disrupting and impacting business operations, interfering with a Fund’s ability to calculate its NAV, impeding trading by or in the Funds, potentially resulting in financial losses and causing violations of applicable privacy laws and other laws. While we have established business continuity plans and risk management systems to address cyber security risk, there are inherent limitations in such plans and systems, including the possibility that certain risks have not been identified. Furthermore, a Fund cannot control the cyber security plans and systems in place by its service providers or any other third party whose operations may affect the Fund or its securityholders. A Fund and its securityholders could be negatively impacted as a result. Different Mutual Funds have Different Risks All investments, including mutual funds, carry the risk that you will lose money or not make money. The degree of risk from one mutual fund to another varies considerably. Generally speaking, investments with the highest potential return carry the greatest risk. Money market funds are considered the least risky, but usually come with the lowest expected returns. The riskiest mutual funds tend to be aggressive growth mutual funds, but they also typically provide the highest potential return. We offer a selection of mutual funds within these two extremes. In deciding how much risk you are prepared to take, you should consider how soon you will need the money you are investing. The longer you can leave your money invested, the more time there is for short-term market declines to be reversed. What are the Specific Risks Associated with Mutual Funds? Below are some of the specific risks that can affect the value of your investments in a Fund. The descriptions of each Fund, provided later in this document, identify which risks apply to each Fund. 5 Activist Investor Risk An activist investor is an investor who attempts to use his or her rights as a shareholder of a publicly-traded company to bring about change to the company’s policies or strategic direction. The goals of an activist investor range from financial (increase of shareholder value through changes in corporate policy, financing structure, management or board membership) to non-financial (disinvestment from particular countries or environmental policies). The value of the securities of a company where an activist investor has disclosed the intention to seek change or influence the management or control of the company, or a company likely to become subject to such an action, may tend to be more volatile. There is no guarantee that an activist investor will be successful in changing or influencing the management or control of a company. The management of a company may resist the actions of an activist investor, resulting in uncertainty over a company’s governance and potential litigation. An activist investor, like other shareholders of a company, is limited in the actions it can take to change or influence the management or control of a company. Voting rights attached to a company’s shares are a common example of a method available to shareholders to influence or change the management or control of a company. There is no guarantee that an activist investor will hold a sufficient number of voting rights attached to its shares to change or influence the management or control of a company. Asset-Backed and Mortgage-Backed Securities Risk If a Fund invests in asset-backed or mortgage-backed securities and there are changes in the market’s perception of the creditworthiness of the parties involved, or in the value of, or interest rate applicable to, the underlying assets or property, then the value of such securities (and the net asset value of the Fund which is invested in such securities) may be affected. These securities may also be subject to credit and default risk (see descriptions below). Capital Depletion Risk Certain Securities of certain Funds are designed to provide a monthly cash flow to investors. A significant portion of this cash flow will be paid as a return of capital. Returns of capital may reduce the net asset value per Security of the particular series of a Fund. As well, returns of capital may reduce the total assets of the Fund available for investment, which may reduce the ability of the Fund to generate future returns. Concentration Risk Some Funds may have a concentrated number of investments. As a result, the securities in which they invest may not be diversified across asset classes, sectors, regions or countries. By investing in a relatively small number of securities, the portfolio manager may also have a significant portion of the Fund invested in a single security. Concentrated portfolios may experience higher levels of volatility, as the value of the portfolio will vary more in response to changes in the market value of an individual security, asset class, sector, region or country. Corporate Class Risk Although each class of shares of CSFI has its own specific investments attributable to it, liabilities accruing to CSFI or any of the Corporate Class Funds represent obligations of the whole corporation. If the liabilities of one Corporate Class Fund exceed the assets attributable to that Corporate Class Fund, there is the risk of encroachment upon some or all of the assets attributable to the other Corporate Class Funds to satisfy those obligations. In addition, the tax position of any Corporate Class Fund will depend on the tax position of CSFI as a whole and, as a result, the tax implications of investing in a Corporate Class Fund may differ from the tax implications of investing in a Trust Fund. Further information concerning taxation of CSFI and its Securityholders is contained in the Annual Information Form of the Funds. CSFI may become subject to tax on certain income earned by the corporation. If CSFI does become subject to tax, the board of directors of the corporation, in consultation with its management, will allocate the tax payable by the corporation against the net 6 asset value of such series of such Corporate Class Funds that make up the corporation as it, in its absolute discretion, determines to be fair and equitable. Credit Risk This is the risk that the issuer of debt securities purchased by a Fund will not pay that obligation which will negatively impact the value of debt securities issued by the issuer (also see “Default Risk”). Credit risk includes the risk that an issuer may suffer adverse changes in its financial condition, causing its credit rating to be lowered which may increase the volatility of a security’s price. Changes in the credit rating of an issuer may not only affect the value of their debt securities but also its liquidity, making it more difficult to sell (see “Liquidity Risk”). Any of these events may negatively impact value and performance of a Fund holding such securities. Currency Risk Certain Funds invest in securities that are issued in foreign currencies. Changes in the value of the Canadian dollar, relative to these currencies, will affect the value of Canadian dollar denominated Funds and could negatively impact the performance of these Funds. For example, if a security is priced in a foreign currency and the value of the foreign currency declines relative to the Canadian dollar, the value of that security in Canadian dollars will decrease. This will have a negative effect on the value of the Fund. The NAV for IA Clarington U.S. Dollar Floating Rate Income Fund is calculated in U.S. dollars. For this Fund, changes in the value of the U.S. dollar will affect the value of investments in non-U.S. based issuers (including Canadian issuers) relative to the value of other currencies. Default Risk This is the risk that a debt issuer may fail to pay interest or principal promptly when due which will impact the value of debt securities issued by the issuer. This risk is typically, but not exclusively, associated with securities of issuers that carry a below investment grade credit rating (also see “Credit Risk”). The value of a Fund holding such securities may decline as a result. Deflation Risk Deflation risk occurs when the general level of prices fall. In the event deflation occurs, the interest payments on real return bonds would shrink and the market value of the real return bonds held by a Fund would be adjusted downward. Derivatives Risk A derivative is a contract between two parties, the value of which is based on the performance of other investments, such as equities, bonds, currencies or a market index. Derivatives may be traded in the over-thecounter market or on a stock exchange. A derivative is commonly a futures or a forward contract or an option, but there are other types of derivative instruments as well. Futures or forward contracts are agreements to buy or sell a security, commodity or currency for a certain price on a certain future date. Options give the buyer the right, but not the obligation, to buy or sell a security, commodity or currency for a certain price on or before a certain future date. Derivatives may be used to limit, or hedge against, losses that may occur because of a Fund’s investment in a security or exposure to a currency (see “Currency Risk”) or market. This is called hedging. Derivatives may also be used to obtain exposure to financial markets, reduce transaction costs, create liquidity or increase the speed of portfolio transactions. These investments are generally made for non-hedging purposes. The following risks are generally associated with using derivatives: the use of derivatives for hedging may not be effective. For example, when using derivatives to reduce risk associated with certain investments including, but not limited to, foreign markets, interest rates, currencies or specific stocks, there may be an imperfect correlation between changes in the market value of the investment being hedged and the hedging derivative. This is often referred to as “basis risk”. Furthermore, any past correlation may not be maintained during the hedging period. 7 a derivative contract may not be obtained when desired by a Fund because: (i) there may be a lack of parties wanting to buy or sell a derivative contract, or (ii) the exchanges on which some derivatives are traded may set daily trading limits on futures contracts, preventing the Fund from closing a contract, the other party to the derivative contract may not be able to meet its obligations and may default (also known as counterparty risk), if an exchange halts trading in a certain derivative, a Fund may not be able to close its position in that derivative, the cost of the derivative contract may increase, the price of a derivative may not accurately reflect the value of the underlying security or index, the costs associated with entering certain derivative contracts may impact the value and performance of a Fund the Tax Act, or its interpretation, may change in respect of the tax treatment of derivatives, and when a Fund enters certain derivatives such as futures contracts, assets of the Fund may be placed on deposit with the futures dealer (or other similar counterparties), which exposes the Fund to credit and financial risk associated with these parties. If a Fund is a “registered investment” for the purposes of the Tax Act, the Fund will not acquire or hold any investment, including an investment in a derivative, if, as a result of acquiring or holding that investment, the Fund would become subject to tax under Part X.2 of the Tax Act. Emerging Markets Risk In addition to the risks of investing in foreign investments generally, emerging markets investments are subject to greater risks arising from political or economic instability, nationalization or confiscatory taxation, currency exchange restrictions and an issuer’s unwillingness or inability to make principal or interest payments on its obligations. Emerging market companies may be smaller and have shorter operating histories than companies in developed markets. Equity Market Risk This is the risk that the market value of a Fund’s equity investments will rise or fall based on Canadian or international equity market conditions rather than the individual performance and characteristics of the companies that issued the securities. Equity markets can fluctuate with changes in general economic and financial conditions globally or in the countries where the markets are based. Political, social and environmental factors can also significantly affect equity markets and as a result the value of equity investments. ETF Risk The Funds may invest in ETFs which qualify as index participation units under NI 81-102. These ETFs seeks to provide returns similar to the performance of a particular market index or industry sector index. ETFs may not achieve the same return as their benchmark market or industry sector indices due to, among other things, differences in the actual weights of securities held in the ETF versus the weights in the relevant index (any such differences are usually small) and due to the operating and management expenses of the ETFs. An ETF may, for a variety of reasons, also fail to accurately track the market segment or index that underlies its investment objective. The price of an ETF can also fluctuate and the value of Funds that invest in securities offered by ETFs will change with these fluctuations. Floating Rate Loan Liquidity Risk Floating rate loans may be subject to legal or contractual restrictions on resale. The liquidity of floating rate loans varies significantly over time and among individual floating rate loans. During periods of infrequent trading, valuing a floating rate loan can be more difficult, and buying and selling a floating rate loan at an 8 acceptable price can be more difficult and delayed. Any difficulty in selling a floating rate loan can result in a financial loss to the Fund. The time required for trades of floating rate loans to settle is typically twenty business days (T+20). In comparison, floating rate notes and corporate bonds typically settle in three business days (T+3) (beginning September, 2017, settlement will change to two business days T+2). Foreign Investment Risk There is a risk that investments in foreign companies outside Canada will be affected by world economic factors in addition to changes in the value of the Canadian dollar (also see “Currency Risk”). In addition, information about foreign companies may not be as complete and may not be subject to the same accounting, auditing, financial reporting standards and practices and other disclosure requirements that apply in Canada. Different financial, political, social and environmental factors can significantly affect the value of a Fund’s foreign investments. In some countries that exhibit political instability there may be risks such as nationalization, expropriation or currency controls. Foreign markets may be more volatile or lack liquidity, which may increase the price volatility of the foreign securities. The costs of buying and selling securities in foreign markets may be higher than those involved in domestic transactions. These risks are generally higher with emerging market investments. Fund of Funds Risk The Funds invest directly in, or obtain exposure to, other investment funds as part of their investment strategy and will be subject to the risks of the Reference Fund. If a Reference Fund suspends redemptions, it may be difficult to value part of a Fund’s portfolio. Government Securities Risk Government securities are subject to the risk that the government that issued the securities may default on its obligations (also see “Default Risk”). In addition, some government agency securities may be subject to a higher degree of credit risk than the government, particularly if they are not backed by the full faith and credit of the government (see “Credit Risk”). Income Trust Risk Income trusts generally hold securities in, or are entitled to receive royalties from, an underlying active business. To the extent that an underlying business is susceptible to industry risks, interest rate fluctuations, commodity prices and other economic factors, investment returns from an income trust may be similarly affected. Although their returns are neither fixed nor guaranteed, income trusts are structured in part to provide a constant stream of income to investors. As a result, an investment in an income trust may be subject to interest rate risk. There is also a risk that where claims against an income trust are not satisfied by that trust, investors in that trust could be held liable for any outstanding obligations. Interest Rate Risk A Fund that invests in interest rate sensitive securities such as income trusts, bonds or other fixed income securities tend to be affected by changes in interest rates. If interest rates increase, the value of the security may decline. Variable and floating rate securities generally are less sensitive to interest rate changes but may decline in value if their interest rates do not rise as much, or as quickly, as interest rates in general. Large Transaction Risk Securities of a Fund may be purchased by another IA Clarington Fund or a third party mutual fund (as part of that mutual fund’s “fund-of-funds” portfolio), by large investors, or by a large group of smaller investors, or by or in respect of other investment products. For example, the Distinction Portfolios may invest in other Funds, and banks or other institutional investors may purchase Securities of a Fund for their own investment products. This could result in large investments in a Fund. Any significant transaction made by a large investor, or by a large group of smaller investors, could significantly impact a Fund’s cash flow. If the investor(s) buys large amounts of Securities of a Fund, the Fund could temporarily have a high cash balance. Conversely, if the 9 investor(s) redeems large amounts of Securities of a Fund, the Fund may be required to fund the redemption by selling securities from its portfolio at an inopportune time. This could include selling investments in a market cycle downturn when many investments have declined in value or at any other time when a particular investment may have to be sold below its anticipated worth. This can have a negative impact on the performance of the Fund. Leveraged ETF Risk The Funds, other than IA Clarington Money Market Fund, have received regulatory relief to invest in Leveraged ETFs which attempt to magnify returns by a multiple of 200% or an inverse multiple of up to 200% of a specified widely-quoted market index, referred to as a “benchmark index”. Leveraged ETFs typically achieve their objectives through the use of leverage or derivatives. This can result in the Leveraged ETF experiencing more volatility than the benchmark index, and achieving longer-term returns that deviate significantly from the benchmark index. An investment in a Leveraged ETF may therefore be highly speculative. In addition, Leveraged ETFs can magnify potential gains or losses, and as a result typically have a higher degree of risk than investing in an exchange-traded fund that simply tracks the benchmark index. As per NI 81-102, the Funds will not invest in a Leveraged ETF with a benchmark index that is based on (i) a physical commodity (other than gold), or (ii) a specified derivative of which the underlying interest is a physical commodity (other than gold). Liquidity Risk Liquidity generally refers to the speed and ease with which a security can be sold and converted into cash. Securities that exhibit very low liquidity (“illiquid securities”) may result in increased transaction time, unfavourable transaction prices or the complete inability to sell a particular security. Illiquidity can be a result of various factors such as legal restrictions, a lack of an organized and efficient marketplace to trade the security, limited demand for the security, the nature of the investment itself and certain economic events. If a Fund experiences difficulties with selling a security, that particular security may lose value before it is sold. The Fund may also incur additional transaction costs. Illiquid securities may also be more difficult to value accurately and may experience increased price fluctuations. Prepayment Risk Many types of debt instruments, including floating rate loans, can be prepaid, in whole or in part, prior to the instruments stated maturity. Prepayment may be caused by a variety of factors which are difficult to predict. Such securities that were purchased above par or at the prepayment price could result in a capital loss as a result of such prepayment which will negatively impact the value and performance of a Fund holding the particular security. In addition, proceeds from a prepayment may not be invested at similar or more favourable interest rates as the initial security (see “Reinvestment Risk”). Reinvestment Risk Reinvestment risk generally refers to the risk that payments such as coupons from a bond or similar fixed income security may not be able to be reinvested at an interest rate similar or higher than the prevailing rate at which the security was initially purchased. Reinvestment risk is greater during periods of declining interest rates and as a result of early prepayment (see “Prepayment Risk”). Repurchase and Reverse Repurchase Transactions and Securities Lending Risk Some of the Funds may enter into repurchase and reverse repurchase transactions and/or securities lending agreements. Investors in Funds which don’t currently enter into repurchase and reverse repurchase transactions will be given 60 days’ prior written notice before a Fund starts to enter into these types of transactions. A repurchase transaction is where a Fund sells portfolio securities that it owns to a third party for cash and simultaneously agrees to buy back the securities at a later date at a specified price using the cash received by the Fund from the third party. While the Fund retains its exposure to changes in the value of the portfolio securities, it also earns fees for participating in the repurchase transaction. 10 A reverse repurchase transaction is where a Fund purchases securities from a third party and simultaneously agrees to sell the securities back to the third party at a later date at a specified price. The difference between the Fund’s purchase price for the securities and the resale price provides the Fund with additional income. A securities lending agreement is similar to a repurchase agreement except that instead of selling the securities and agreeing to buy them back later, the Fund loans the securities for a fee and can demand the return of the securities at any time. While the securities are on loan, the borrower provides the Fund with collateral consisting of cash and/or securities. The risks associated with these types of transactions arise if the other party to the agreement defaults or goes bankrupt and the Fund experiences losses or delays in recovering its investment. In a repurchase or securities lending transaction, the Fund could incur a loss if the value of the securities sold or loaned has increased in value relative to the value of the cash or collateral held by the Fund. In the case of a reverse repurchase transaction, the Fund could incur a loss if the value of the securities purchased by the Fund decreases in value relative to the value of the collateral held by the Fund. To minimize these risks, a Fund will not enter into these types of transactions unless it is, at a minimum, fully collateralized by liquid securities with a value of at least 102% of the market value of the securities sold, purchased or loaned, as the case may be. A Fund will not enter into a repurchase or securities lending agreement if, immediately thereafter, the aggregate market value of all securities loaned by the Fund and not yet returned to it or sold by the Fund and not yet repurchased would exceed 50% of the NAV of the Fund. To minimize the risk of loss to the Fund, these transactions will only be entered into with parties that have adequate resources and financial strength to meet their obligations under the agreement. Sector Risk Sector risk generally refers to the risk that changes in a market sector, for example Energy or Financials, will affect a Fund’s investments that are heavily concentrated in that sector. The performance of securities of sectorspecific companies can be highly correlated and, as a result, a Fund that has high sector concentrations may be impacted significantly by the performance of the overall sector. Series Risk Most of the Funds are available in more than one series of units or shares. Each series has its own fees and expenses, which the Funds track separately. If, for any reason, a Fund cannot pay the expenses of one series using its proportionate share of the Fund’s assets, the Fund will be required to pay those expenses out of the other series’ proportionate share of the assets. This could lower the investment return of the other series. Short Selling Risk A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. The short seller is obligated to return the borrowed securities in the future and may need to purchase them at short notice in order to satisfy this obligation. Where a Fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. Unlike a purchase of securities, where the maximum amount of the loss is limited to the amount invested, there is theoretically no limit to a Fund’s exposure on a short sale as the securities may need to be purchased at a higher price than at what the short sale took place. As a result the financial loss could be infinite. In addition, the securities loaned for the short sale may be recalled by the lender, and limitations on availability of securities may limit a Fund’s freedom of action in connection with short sales. Smaller Capitalization Risk The value of smaller capitalization companies may be less stable than those of larger capitalization companies. The securities of smaller capitalization companies may also trade less frequently and in smaller volumes than securities of larger capitalization companies, which can expose the Fund to liquidity risk. Funds that invest in smaller capitalization companies are more likely to be exposed to volatility resulting from these characteristics. 11 Tax Risk Canadian Tax Rules If the Trust Fund experiences a “loss restriction event” (i) the Fund will be deemed to have a year-end for tax purposes (which could result in the Fund being subject to tax unless it distributes its income and capital gains prior to such year-end), and (ii) the Fund will become subject to the loss restriction rules generally applicable to corporations that experience an acquisition of control, including a deemed realization of any unrealized capital losses and restrictions on their ability to carry forward losses. Generally, a Trust Fund will be subject to a loss restriction event when a person becomes a “majority-interest beneficiary” of the Fund, or a group of persons becomes a “majority-interest group of beneficiaries” of the Fund, as those terms are defined in the affiliated persons rules contained in the Tax Act, with appropriate modifications. Generally, a majority-interest beneficiary of a Trust Fund will be a beneficiary who, together with the beneficial interests of persons and partnerships with whom the beneficiary is affiliated, has a fair market value that is greater than 50% of the fair market value of all the interests in the income or capital, respectively, in the Fund. Generally, a person will be deemed not to have become a majority interest beneficiary, and a group of persons will be deemed not to have become a majority interest group of beneficiaries, of a Trust Fund where the Fund meets certain investment requirements and qualifies as an “investment fund” under the Tax Act. U.S. Tax Rules Funds that invest in specific U.S. debt securities may be considered to be engaged in a U.S. trade or business causing such Funds to be subject to U.S. income tax. In order to mitigate these tax consequences, the Manager of such Funds has established investment guidelines for investments in such U.S. debt securities. Tracking Risk Some of the Funds may seek to have all or a substantial portion of their returns linked to the performance of Securities of another mutual fund referred to as a “Reference Fund” by either directly purchasing securities similar to those held by the Reference Fund or by entering into forward contracts and other derivative instruments. The return (performance) of a Fund may be lower than that of its respective Reference Fund because the Fund bears its own fees and expenses, including the costs of any forward contracts and other derivatives that it may use to achieve its investment objectives. Additionally, there may be a delay between the time an investor buys Securities of a Fund and the time the Fund gets additional exposure to the Reference Fund. During this delay, the Fund may be unable to track the performance of its corresponding Reference Fund. Such performance lags and tracking errors could result in the security price of the Fund not precisely tracking the security price of its Reference Fund. Organization and Management of the Funds IA Clarington is a subsidiary of Industrial Alliance, a leading financial institution in Canada and an industry leader in the insurance and financial services sectors. Industrial Alliance is listed on the Toronto Stock Exchange under the symbol “IAG”. Companies that Work with the Funds Manager IA Clarington Investments Inc. 522 University Avenue, Suite 700 Toronto, Ontario, M5G 1Y7 1-800-530-0204 www.iaclarington.com The Manager manages the overall business of the Funds, including administration services, promoting sales of each Fund’s Securities, arranging for the provision of other services and hiring each Fund’s portfolio manager and/or sub-advisor. Trustee IA Clarington Investments Inc. Toronto, Ontario The Trust Funds are organized as trusts. When you invest in a Trust Fund, you buy units of a trust. The trustee holds legal title to the property of the Trust Funds for the benefit of all of the Securityholders of those Funds. 12 The Corporate Class Funds are organized as classes of shares of a corporation, Clarington Sector Fund Inc., and do not have a trustee. Portfolio Manager The portfolio manager and the sub-advisors are companies retained to manage the investment portfolio of the Funds. It may be difficult to enforce any legal rights against any of the non-Canadian sub-advisors because they are foreign companies and their assets are located outside Canada. Industrial Alliance Investment Management Inc. Québec City, Québec Industrial Alliance Investment Management Inc. acts as portfolio manager to all of the Funds. For many of the Funds, it has delegated its responsibilities to a subadvisor. See “Fund Details” to find out the sub-advisor responsible for each Fund. Industrial Alliance Investment Management Inc. is an affiliate of IA Clarington Investments Inc. Custodian RBC Investor Services Trust Montréal, Québec RBC Investor Services Trust is the custodian for the Funds, except IA Clarington Core Plus Bond Fund, IA Clarington Floating Rate Income Fund, IA Clarington U.S. Dollar Floating Rate Income Fund, IA Clarington Growth & Income Fund and IA Clarington North American Opportunities Class. CIBC Mellon Trust Company Toronto, Ontario CIBC Mellon Trust Company is the custodian for IA Clarington Core Plus Bond Fund, IA Clarington Floating Rate Income Fund, IA Clarington U.S. Dollar Floating Rate Income Fund, IA Clarington Growth & Income Fund and IA Clarington North American Opportunities Class. The custodians are responsible for the safekeeping of the assets of the Funds. They may retain the services of subcustodians in Canada and throughout the world to hold the investments of the Funds. Registrar and Transfer Agent IA Clarington Investments Inc. Toronto, Ontario The registrar and transfer agent keeps track of the owners of Securities of each of the Funds, processes purchase, switch and redemption orders and issues investor account statements, trade confirmations and annual tax reporting information. Securities Lending Agent RBC Investor Services Trust Montréal, Québec The securities lending agent acts as the agent for the Funds in administering the securities lending transactions of the Fund. Auditor PricewaterhouseCoopers LLP Montréal, Québec The auditor audits the annual financial statements of the Funds. Securityholder approval will not be required for a change of auditor of a Fund if the independent review committee of the Fund has approved the change and notice of the change is sent to Securityholders of the Fund at least 60 days before the change. 13 Independent Review Committee Stephen J. Griggs (Chair) Jean Morissette S. Robert Munroe The independent review committee reviews matters that involve a conflict of interest within the meaning of National Instrument 81-107-Independent Review Committee for Investment Funds. The independent review committee provides an annual report of its activities, which is available on IA Clarington’s website at www.iaclarington.com or, at your request and at no cost, by contacting us at [email protected] or calling us toll free at 1-800-530-0204. Additional information about the independent review committee and fund governance is available in the Funds’ Annual Information Form. Fund of Funds Each of the Funds may invest directly in other mutual funds, referred to as “Reference Funds”, including mutual funds managed by IA Clarington or an affiliate of IA Clarington. IA Clarington Canadian Small Cap Class, IA Clarington Global Opportunities Class, the Distinction Portfolios, IA Clarington Inhance Balanced SRI Portfolio, IA Clarington Inhance Conservative SRI Portfolio, IA Clarington Inhance Growth SRI Portfolio, IA Clarington Canadian Conservative Equity Class, IA Clarington Tactical Bond Class, IA Clarington Tactical Income Class, IA Clarington Yield Opportunities Fund, IA Clarington Global Tactical Income Class, IA Clarington Strategic Corporate Bond Class, IA Clarington Strategic Income Class, IA Clarington Strategic Equity Income Class, IA Clarington Canadian Balanced Class and the Managed Portfolios may invest primarily in other mutual funds, including any of the Funds and third-party mutual funds. Where IA Clarington is the manager of both a top fund and a Reference Fund, it will not vote the Securities of the Reference Fund held directly by the top fund. Instead, where applicable, IA Clarington may arrange for such Securities to be voted by the beneficial Securityholders of the applicable top fund. Certain Changes without Securityholder Approval A Fund may engage in a reorganization or transfer of assets with another mutual fund managed by us or an affiliate that meets certain criteria set out in NI 81-102 without Securityholder approval, if the reorganization or transfer is approved by its independent review committee and the Fund sends written notice of the change to its Securityholders at least 60 days prior to making the change. Purchases, Switches and Redemptions Securities of the Funds may be purchased, switched (transferred from one Fund to another IA Clarington Fund) or redeemed through a registered dealer across Canada. Securities are purchased, switched or redeemed at their net asset value per security. See “Valuation of a Fund” below for details on how to calculate the net asset value for each series of securities. If we receive a completed purchase, switch or redemption order on or before 4:00 p.m. Eastern Time on a day that the Toronto Stock Exchange is open for business or before the Toronto Stock Exchange closes for the day, whichever is earlier, it will be processed at the net asset value per security on that day. If we receive the order after that time, it will be processed at the net asset value per security calculated on the next business day. Securities of IA Clarington U.S. Dividend Growth Registered Fund are only available to Qualified Investors. Valuation of a Fund The value of a mutual fund is its net asset value, referred to as a “NAV”. We calculate a separate NAV for each series of Securities of the Funds. The NAV per series is calculated by adding together the total of the series’ share of a Fund’s assets and subtracting the total of the liabilities allocated to that series of Securities. The NAV of each series of Securities of a Fund is calculated at the close of business on each day that the Toronto Stock Exchange is open for trading. Once the NAV of a series of Securities of a Fund is determined, the 14 NAV for each security of that series can be calculated by dividing the series NAV by the total number of Securities outstanding in that series of the Fund. Further details concerning the valuation of each Fund’s Securities are included in the Annual Information Form. Foreign Currencies IA Clarington U.S. Dollar Floating Rate Income Fund is valued in U.S. dollars for the purposes of purchases, switches, redemptions and distributions. Each Fund is valued in Canadian dollars for the purposes of purchases, switches and redemptions. However, you may elect to purchase the series of Securities of the Funds specified below in U.S. dollars: IA Clarington Focused U.S. Equity Class (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5, T5) IA Clarington Global Equity Fund (Series A, E, F, F6, FE, I, L, L6, P, T6, T8) IA Clarington Global Growth & Income Fund (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5, T5) IA Clarington Global Opportunities Class (Series A, E, EX, F, FE, L, P) IA Clarington Global Opportunities Fund (Series A, E, F, L) IA Clarington Global Tactical Income Fund ((Series A, E, E6, F, F6, FE, FE6, L6, L8, P, P6, T6, T8) IA Clarington Growth & Income Fund (Series A, E, E5, F, F5, L, L5, P, P5, T5) IA Clarington North American Opportunities Class (Series A, E, F, L, P) IA Clarington Sarbit U.S. Equity Class (Unhedged) (Series A, E, F, F6, FE, L, L6, P, T6) IA Clarington U.S. Dividend Growth Fund (Series A, E, F, F6, FE, L, L6, P and T6) Series I and Series O Securities may also be available for purchase or redemption in currencies other than Canadian dollars. Any such privileges must be specified in the Series I agreement or Series O agreement pertaining to those Securities. For the purposes of purchases, switches and redemptions made pursuant to the Dollar-Cost Averaging Service, each Transfer Fund is valued only in Canadian dollars. You may not elect to purchase or redeem any Securities of the Transfer Funds in U.S. dollars. For the purposes of calculating eligibility and rates for management fee reductions as well as for tax reporting purposes, U.S. dollar investment amounts will be converted to Canadian dollars at the current exchange rate. Series of Securities Each Fund is permitted to have an unlimited number of series of Securities and may issue an unlimited number of Securities of each series. Please refer to “Fund Details” in the description of each Fund to determine what series of Securities each Fund offers. Certain series of the Funds may be subject to minimum investment amounts. These amounts are determined from time to time by IA Clarington in its sole discretion. They may also be waived by us and are subject to change without prior notice. The consideration that you and other investors pay to purchase securities of any series is tracked on a series by series basis in your Fund’s administration records. However, the assets of all series of a Fund are combined in a single pool to create one portfolio for investment purposes. Series A and T Securities Series A and Series T Securities of the Funds are available to all investors. Other than the amount of the monthly distribution and, in some cases, the management and administration fees, Series T Securities have the same general features as Series A Securities of the Funds. Series T Securities are designed to provide a taxefficient cash flow to investors by making monthly distributions as described under “Monthly Distribution Series” on page 17. Series B Securities Series B units of IA Clarington Money Market Fund are only available to investors who invest at least $100,000 in the Fund. 15 Series B units of IA Clarington Inhance Bond SRI Fund and Managed Portfolios are available to investors who invest through the Front End Option. Series B units are available to all investors in these Funds; however, your initial investment must be at least $500. Series DA and DF Securities Series DA and Series DF units of IA Clarington Money Market Fund are available to all investors who invest at least $1,000 and $10,000, respectively, in a Fund. They are designed to allow investors the opportunity to systematically invest in pre-selected Transfer Funds over time using the Dollar-Cost Averaging Service. Series DA and Series DF units otherwise have the same features as Series A and Series F Securities of the Funds respectively. For more information on the Dollar-Cost Averaging Service, please see “Optional Services” on page 27. Series E Securities Series E Securities are available to investors who invest at least $100,000 in a Fund. Series F Securities Series F Securities are available to investors whose dealer has signed a Series F agreement with us (generally, investors who participate in fee-based programs through their dealer). Instead of paying sales charges, these investors pay an annual fee, determined between the investor and dealer, to their dealer for investment advice and other services. We may collect the dealer advisor fee from you on behalf of your dealer. We do not pay any commission to dealers who sell Series F Securities, which means that we can charge a lower management fee. Series F Securities are also available to other groups of investors for whom we do not incur distribution costs. For Series F Securities, your initial investment should be at least $10,000 in a Fund. Series FE Securities Series FE Securities are available to investors who invest at least $100,000 in a Fund and whose dealer has signed a Series F agreement with us (generally, investors who participate in fee-based programs through their dealer). Instead of paying sales charges, these investors pay an annual dealer advisor fee, determined between the investor and dealer, to their dealer for investment advice and other services. We may collect the dealer advisor fee from you on behalf of your dealer. We do not pay any commission to dealers who sell Series FE Securities, which means that we can charge a lower management fee. Series FE Securities are also available to other groups of investors for whom we do not incur distribution costs. Series L Securities Series L Securities are available to investors whose dealers have signed a Series L agreement with us and are sold under the Advisor Service Charge Option only (please see page 20 for details on this purchase option). We pay your dealer a commission equal to 3.00% of the amount of your investment. Your dealer will pay us a redemption fee on a declining scale if you redeem these Securities within three years of purchase. Your dealer is required to provide you with written disclosure of any conflicts of interest arising from your purchase of Series L Securities and to obtain your written acknowledgement of this disclosure prior to your first purchase of Series L Securities. Otherwise, Series L Securities have the same attributes as Series A and/or Series T Securities. Series I and O Securities Series I and Series O Securities are special purpose Securities. They are typically used in fund of fund arrangements and are available to such investors as we may determine from time to time on a case-by-case basis. No management fees are charged to the Funds with respect to the Series I or Series O Securities. Instead, a separate management fee is negotiated and is paid directly to us. An agreement is entered into with us governing the investment in Series I or Series O Securities. There are no sales commissions payable to dealers on the sale of these Securities. If a top fund managed by us purchases Series I or Series O Securities of a Reference Fund, no management fee is paid by the top fund in respect of those securities and we will reimburse the top fund for any fixed expense charges paid by it in respect of its holdings of Series O Securities. 16 Series M Securities The Distinction Portfolios offer Series M and Series LM Securities. Series M and Series LM Securities are only available to investors who invest at least $15,000 in the relevant Fund. Series M and Series LM Securities have a lower management fee than, but are otherwise identical to, Series A or Series T Securities of the relevant Fund. Series P Securities Series P Securities are intended for investors who invest at least $100,000 in a Fund. No management fees are charged to a Fund, instead each investor will be charged a management fee directly by us and payable to us. The management fee is based upon the amount of your investment in Series P Securities. In addition, investors may pay a dealer service fee which is payable to your dealer. The dealer service fee is in addition to the management fee. Investors who negotiate a dealer service fee may be required to sign a Series P agreement. Please speak with your representative about this agreement. The management fee (plus applicable taxes) and dealer service fee are paid by a redemption of Series P Securities on the last business day of the month. There are no sales commissions payable to dealers on the sale of these Securities. Please see “Fees and Expenses Payable Directly By You” and “Dealer Compensation” on pages 35 and 40 for more details. Monthly Distribution Series Series B5, Series E4, Series E5, Series E6, Series EX5, Series EX6, Series F4, Series F5, Series F6, Series F8, Series F10, Series FX5, Series FX6, Series FX8, Series FE4, Series FE5, Series FE6, Series L4, Series L5, Series L6, Series L8, Series L10, Series P4, Series P5, Series P6, Series T4, Series T5, Series T6, Series T8 and Series T10 Securities are intended for investors seeking regular monthly distributions. The target distribution rate for Series E4, Series FE4, Series L4, Series P4 and Series T4 is 4% per annum, Series B5, Series E5, Series EX5, Series F5, Series FE5, Series FX5, Series L5, Series P5 and Series T5 Securities is 5% per annum, Series E6, Series EX6, Series F6, Series FE6, Series FX6, Series L6, Series P6 and Series T6 is 6% per annum, Series F8, Series FX8, Series L8 and Series T8 is 8% per annum, and Series F10, Series L10, and Series T10 is 10% per annum. The monthly distributions may consist of net income and/or return of capital. Return of capital reduces the amount of your original investment and may result in the return to you of the entire amount of your original investment. The amount of distribution should not be confused with the Fund’s rate of return or performance. Distributions can either be reinvested in additional Securities or paid in cash. Receiving distributions in cash may provide a tax-effective alternative to redeeming Securities. A redemption may result in a taxable disposition and/or a deferred sales charge. Series V Securities Series V Securities are also special purpose securities not sold to the general public. Series V Securities are only available to certain investors who have entered into a discretionary management relationship with a portfolio manager that has signed a Series V agreement with us. No management fees are charged to the Funds with respect to the Series V Securities. Instead, the portfolio manager of each Series V investor negotiates a separate fee for our discretionary management services that is paid directly to us and enters into a Series V Securities agreement with us. There are no sales commissions payable to dealers on the sale of these securities. Series X and Y Securities Series X and Series Y Securities are available to certain investors in connection with mutual fund reorganizations, series re-designations or other changes. Series X Securities are not otherwise available for purchase. Series X Securities of IA Clarington Canadian Dividend Fund can only be issued in exchange for Series A Securities of IA Clarington Canadian Dividend Fund or pursuant to a pre-authorized chequing plan established in respect of Series A Securities of IA Clarington Canadian Dividend Fund. Series X Securities of the other Funds were issued to certain investors in exchange for their holdings in certain mutual funds formerly managed by us. Series X Securities of any Fund that are issued in exchange for securities of another series of a mutual fund are treated as if they were purchased under the same sales charge option (the Front End option, Low Load option or Deferred Sales Charge option) as the securities for which the Series X Securities were exchanged. Series T8 Securities of IA Clarington Strategic Income Fund were re-designated as Series Y 17 Securities of that Fund. Series T4 Securities of IA Clarington Strategic Equity Income Fund were re-designated as Series Y Securities of that Fund. Holders of Series X and Series Y Securities of any Fund may elect to receive cash instead of reinvesting their distributions. How to Purchase Funds Buying a Registered Fund IA Clarington U.S. Dividend Growth Registered Fund may only be purchased by Qualified Investors. We will reject an order from anyone other than a Qualified Investor for this Fund. Buying a U.S. Dollar Fund Securities of IA Clarington U.S. Dollar Floating Rate Income Fund are available for purchase in U.S. Dollars only. For these U.S. dollar securities: We will calculate the NAV per security in U.S. dollars on a daily basis, When you redeem securities, we will pay you in U.S. dollars, When you request cash distributions, we will pay you in U.S. dollars, Switches will only be permitted to and from series of securities in U.S. dollars. These switches will be processed in U.S. dollars, Switches to a U.S. Dollar Purchase Option fund will be allowed, and Tax reporting will be in Canadian dollars. You may purchase Securities of any Fund through your dealer. Minimum initial investment amounts are set out below: Series Series A Series B, other than Series B of IA Clarington Money Market Fund Series L, other than Series LM Securities Series T Series B of IA Clarington Money Market Fund Series E Series FE Series P Series F Series LM Series M Initial Investment $500 $100,000 $10,000 $15,000 Any subsequent purchase of Securities of a Fund should be at least $50. For Series DA and Series DF Securities of IA Clarington Money Market Fund, each of your lump sum investments must be at least $1,000 and $10,000, respectively, in the Fund to participate in the Dollar-Cost Averaging Service. Minimum investment amounts apply to all investments regardless of the currency used for purchase and must be in the currency in which you are investing. For example, if you are investing in a Fund in U.S. dollars, the minimum investment amount must be met in U.S. dollars. If you subscribe for a series of Securities but do not meet the initial investment requirements for those Securities, we will purchase Series A, Series F, Series M or Series T Securities of that Fund (as applicable). We do not currently enforce the minimum amount requirement applicable to Series A, Series F, Series L (other than Series LM) or Series T Securities, but may enforce them in our discretion in the future without notice to you. Where we enforce a minimum amount requirement, we may waive it at our discretion. Except as noted below, Series I, Series O and Series V Securities do not have a minimum purchase threshold, but are only available to 18 investors who enter into a Series I or Series O agreement, or to investors whose portfolio manager has entered into a Series V agreement, as applicable, with us. Once you have given a purchase order to your dealer, the dealer must send your order to us on the same day it is received, if received by the dealer during normal business hours, and otherwise on the next business day. Generally, your dealer will transmit purchase orders by courier, Priority Post or telecommunications facilities. It is the responsibility of your dealer to transmit orders to us in a timely manner and to assume all associated costs. We have the right to accept or reject any purchase order within one business day of receiving the order. If an order is rejected, any amounts received will be returned to your dealer immediately. If your cheque for the purchase of Securities is not honoured, we may reverse the purchase order and hold you responsible for any costs involved. If we receive a purchase order that is otherwise valid but fails to specify a Fund or if any other part of your purchase order is incomplete, we have the discretion to treat the order as if it is an order to purchase Series A units of IA Clarington Money Market Fund under the Front End Option at a 0% sales charge. We must receive payment for all purchases within three business days of receiving the order. After September 5, 2017, we will require payment within two business days. If the payment and all necessary documents are not received within three business days, securities regulations require us to redeem the Securities on the next business day. The proceeds of the redemption will be used to reduce any amount owing to the Fund. Any excess will belong to the applicable Fund. We will pay any shortfall to the applicable Fund, but we may collect such amount, together with the charges or expenses incurred, with interest, from the dealer who placed the order. Your dealer has the right to collect these amounts from you. If you purchase Securities of a Fund during a period when the NAV is suspended, you may either withdraw your purchase order prior to the end of the suspension period or receive the Securities based on the NAV per security first calculated following the end of the suspension period. We may at any time suspend or cease sales of a Fund or of any series of Securities of a Fund. This is commonly called a “cap” of the Fund or the series of the Fund. Even if we cap a Fund or a series of Securities of a Fund, we may re-open it for investment at our discretion. Purchase Options You may purchase Series A, Series DA, Series M and Series T Securities, except Series A and Series T5 Securities of the Managed Portfolios, under three options: Front End Option, Low Load Option, or Deferred Sales Charge Option. If you do not specify an option, your purchase will be considered to be a purchase under the Front End Option, at a 0% sales charge. Series A and Series T5 Securities of the Managed Portfolios are only available for purchase under the Low Load Option or the DSC Option. If you do not specify an option, your purchase will be considered to be a purchase of Series B Securities of the Managed Portfolios under the Front End Option at a 0% sales charge. Series B and Series E Securities are only available for purchase under the Front End Option. Series DF, Series F, Series FE, Series I, Series O, Series P and Series V Securities have special attributes described previously. They are not sold under these three purchase options. Rather, these series of Securities are sold with no sales charge and no redemption fee, while any redemption fees applicable to Series I, Series O or Series V Securities will be set out in the Series I, Series O or Series V agreement relating to those Securities. Series L Securities are only available for purchase under the Advisor Service Charge Option. 19 Front End Option At the time of purchase, you negotiate a sales charge with your dealer of no more than 5.00% of the total amount of Securities purchased under this option and the balance is invested in a Fund. Securities purchased under this option are referred to as “Front End Securities”. Additional fees may apply for short-term trades involving Front End Securities. Please see “Short-Term Trading Fees” on page 25 for details. Low Load Option At the time of purchase, the full amount of your purchase is invested in a Fund and we pay your dealer a commission equal to 2.50% of the amount of your investment. You then pay us a redemption fee on a declining scale if you redeem Securities within three years of purchase. See “Calculating Redemption Fees” on page 24. Securities purchased under this option are referred to as “Low Load Securities”. Additional fees may apply for short-term trades involving Low Load Securities. Please see “Short-Term Trading Fees” on page 25 for details. Deferred Sales Charge Option At the time of purchase, the full amount of your purchase is invested in a Fund and we pay your dealer a commission equal to 5.00% of your initial investment. You then pay us a redemption fee on a declining scale if you redeem Securities within seven years of purchase. See “Calculating Redemption Fees” on page 24. Securities purchased under this option are referred to as “DSC Securities”. Additional fees may apply for shortterm trades involving DSC Securities. Please see “Short-Term Trading Fees” on page 25 for details. Advisor Service Charge Option At the time of purchase, the full amount of your purchase of Series L Securities is invested in a Fund and we pay your dealer a commission equal to 3.00% of the amount of your investment. Your dealer will pay us a redemption fee on a declining scale if you redeem Securities within three years of purchase. See “Calculating Redemption Fees - Advisor Service Charge Option” on page 24 for details. Additional fees may apply for shortterm trades involving Series L Securities. Please see “Short-Term Trading Fees” on page 25 for details. U.S. Dollar Purchase Option If you purchase Securities using U.S. dollars, other than securities of IA Clarington U.S. Dollar Floating Rate Income Fund, we will determine the U.S. dollar NAV per security by converting the Canadian dollar NAV per security at the exchange rate on the day your order is received. You must redeem Securities of a Fund in the same currency in which the Securities were purchased. The overall performance of your investment is the same, regardless of the currency in which you make your purchase, as the same series is sold under either option. Reported returns to clients who select the CAD $ purchase option are commonly stated in CAD $ terms. Reported returns to clients who select the US $ purchase option are commonly stated in US $ terms. The economic return experienced by you under either option is the same. The option to purchase Securities in U.S. dollars is offered as a convenience for investors who prefer to transact in U.S. dollars. Securities available for purchase in U.S. dollars are the same Securities that are available for purchase in Canadian dollars. This purchase option does not hedge, or protect, against losses caused by fluctuations in the exchange rate between Canadian and U.S. dollars. For the purposes of purchases, switches and redemptions made pursuant to the Dollar-Cost Averaging Service, each Transfer Fund is valued only in Canadian dollars. You may not elect to purchase or redeem any Securities of the Transfer Funds in U.S. dollars. Securities denominated in U.S. dollars may not be held in Registered Plans, other than in a TFSA. 20 Switching Securities of the Funds You may switch Securities of a Fund for Securities of another IA Clarington Fund, switch between purchase options or switch a series of a Fund for another series of the same or another IA Clarington Fund, subject to meeting eligibility requirements of the Fund and/or series you are switching into as well as the rules and criteria set out below. Some Funds or series may be closed to switches. Switching Between IA Clarington Funds Switches from a Trust Fund or a Corporate Class Fund to any other Trust Fund or a Target Click Fund are accomplished by redeeming Securities of one Fund and purchasing Securities of the other IA Clarington Fund. These switches will constitute a disposition and may result in a capital gain or loss for income tax purposes. For more information, please see “Income Tax Considerations for Investors” on page 42. Switches from a Corporate Class Fund to another Corporate Class Fund are accomplished by exchanging shares of one Corporate Class Fund for the other Corporate Class Fund. If your proposed switch would constitute 1% or more of the NAV of the Corporate Class Fund you currently hold, we may need to limit or stagger your switch request. Effective January 1, 2017, switches between Corporate Class Funds are treated as a disposition for income tax purposes. Previously, switches between Corporate Class Funds were not considered to be a disposition for income tax purposes. Changes to the Tax Act announced in the March 22, 2016 Federal Budget removed this tax benefit. For more information, please see “ Income Tax Considerations for Investors” on page 42. Certain restrictions may apply in connection with switches to the Target Click Funds. Please refer to the simplified prospectus of the Target Click Funds for more details. Switching Between Purchase Options You may switch Front End Securities of an IA Clarington Fund for Low Load Securities or DSC Securities of another IA Clarington Fund and vice versa. As described below, a switch fee may apply. In addition, a redemption fee may apply if you switch Low Load Securities or DSC Securities that are still subject to a redemption fee schedule for Front End Securities. A switch from Low Load Securities or DSC Securities of a Fund to Securities of another IA Clarington Fund that are held under the same purchase option will not trigger the redemption fee normally applicable to a redemption of those Securities. You may not switch DSC Securities of an IA Clarington Fund for Low Load Securities of another IA Clarington Fund or vice versa. You may switch Securities purchased using Canadian dollars to Securities denominated in U.S. dollars and vice versa. A switch between the two currencies will not incur any additional fees. No disposition will occur as you continue to own the same series of a Fund. The primary change is that your holdings value may now be reported to you using your chosen benchmark currency. You may switch Securities purchased under the U.S. dollar purchase option to IA Clarington U.S. Dollar Floating Rate Income Fund, and vice versa. You may switch Series L Securities of a Fund for Front End Securities of another series of the same Fund, and vice versa. A switch fee may apply. In addition, your dealer will be required to pay us a redemption fee if you switch Series L Securities that are still subject to a redemption fee schedule for Front End Securities. If you switch from another series to Series L Securities, we will pay your dealer a commission, and your dealer will become subject to a redemption fee, as described under “Advisor Service Charge Option” on page 20. You may not switch Series L Securities for DSC Securities or Low Load Securities. All decisions regarding switching between purchase options are negotiated between you and your dealer. As described above, switches between purchase options may result in additional fees for you. In addition, these switches may result in your dealer receiving a higher trailer fee. See “Trailer Fees” on page 40 for the trailer fee paid in respect of each purchase option. You should understand the consequences to both you and your dealer before you switch between purchase options. 21 Switching Between Series You may generally switch one series of a Fund for another series of the same or another IA Clarington Fund if you are eligible to purchase the new series and the series is available for purchase. If you switch to Series A, Series DA, Series M or Series T Securities, you can choose any available purchase option to apply to your new Securities. If you switch to Series B or Series E Securities, you must select the Front End Option. You cannot switch into any series if you are not eligible to purchase that series. IA Clarington will automatically switch Series A and Series T Securities of Managed Portfolios purchased under Low Load Option or DSC Option for Series B Securities of Managed Portfolios when the redemption fee schedule has expired, unless otherwise directed in writing by the investor. This automatic switch will be completed in the quarter following the completion of the applicable redemption fee schedule. No switch fees will be charged when the automatic switch is implemented. You will cease to be eligible to hold a series of a Fund if the value of your initial investment, less any redemptions or switches from that investment, is below the minimum investment amount. If you no longer meet the eligibility requirements to purchase a series, we may switch you to Series A, Series B of the Managed Portfolios, Series DA or Series T Securities of the same Fund under the Front End Option or under the same purchase option as the Series M Securities if you were switched out of Series M. If we determine that you are no longer eligible to hold Series L, Series LM or Series P Securities or if you move your account to a dealer that has not entered into a Series L agreement or a Series P agreement with us, we will switch you to Series A, Series F, Series M or Series T (as applicable) of the same Fund. Your dealer (your former dealer if you have moved your account to a new dealer) will be required to pay a redemption charge to us. See “Fees and Expenses” on page 27 for additional information. Under the Dollar-Cost Averaging Service, you may not switch from Series A or Series F Securities of the Transfer Funds to Series DA or Series DF units of the IA Clarington Money Market Fund, respectively. Any switch to or from Series I, Series O or Series V Securities is subject to the terms of the Series I, Series O or Series V agreement governing those securities. In connection with the wind-up or termination of a Fund that holds Securities of another Fund, we may automatically switch the Series I, Series O or Series V Securities of the other Fund to Series A, Series B, Series F, and/or Series T Securities of that Fund in such proportions as we determine to be reasonable and equitable in the circumstances. Switching Securities of one series of a Fund for Securities of another series of the same Fund is not a disposition for tax purposes. See “Income Tax Considerations for Investors” on page 42 for more information. Switch Fees In addition to any applicable redemption fees, your dealer may charge you a switch fee of up to 2% of the value of the switched securities. If we determine that you are no longer eligible to hold a series of a Fund and we switch you to Series A or Series T Front End Securities or Series F Securities, as applicable, of the same Fund, you will not be charged a switch fee. You will not be charged a switch fee on automatic switches from Series DA and Series DF units of the IA Clarington Money Market Fund to the Transfer Funds under the Dollar-Cost Averaging Service. You will not be charged a switch fee on automatic switches from Series A or Series T5 to Series B units of the Managed Portfolios You may be charged a short-term trading fee in addition to a switch fee if you switch Securities within certain time periods. See “Short-Term Trading Fees” on page 25 for additional information. How to Redeem Funds You may redeem your Securities of a Fund at any time. The amount you will receive is the NAV of the Securities redeemed less any redemption fee, short-term trading fees and/or withholding taxes that may apply. 22 See “Calculating Redemption Fees” below. Securities will be redeemed in the currency in which they were purchased. You must give redemption instructions in writing. The instructions must also bear a signature guaranteed by a Canadian chartered bank, trust company or a member of a public stock exchange in Canada or be guaranteed to our satisfaction. For security reasons, we may refuse to accept a redemption request sent by you directly through telecommunications facilities. Additional documentation may be required if the investor is a corporation, partnership, agent, a trustee acting for someone else, upon the death of an investor or a surviving joint owner. Your dealer must forward your redemption request on the same day it is received, if received by the dealer during normal business hours, and otherwise on the next business day. Whenever possible, a dealer is required to transmit redemption requests by courier, Priority Post or telecommunications facilities. It is the responsibility of your dealer to transmit orders to us in a timely manner and to assume all associated costs. We will pay the redemption proceeds within three business days of receiving all necessary redemption documents. After September 5, 2017, we will pay redemption proceeds within two business days of receiving all necessary redemption documents. If all necessary documents are not received by us within ten business days of receiving a redemption request, you will be deemed to repurchase the Securities on the tenth business day at the NAV per security calculated that day. The redemption proceeds will be applied to the payment of the issue price of the securities. If the cost to repurchase the Securities is less than the redemption proceeds, the difference will belong to the applicable Fund. We will pay any shortfall to the applicable Fund, but we may collect such amount, together with the charges and expenses incurred, with interest, from the dealer who placed the redemption request. Your dealer has the right to collect these amounts from you. Each Fund (other than Series DA and Series DF units of IA Clarington Money Market Fund) has the right to redeem your Securities if the book value of your investment in that Fund is less than $500. You may be notified that the book value of your Securities in a Fund is less than $500 and given 30 days to make an additional investment to increase your investment in the Fund to $500 or more before the redemption is processed. Investors in Series DA and Series DF units of IA Clarington Money Market Fund must invest the minimum investment as set forth on page 18. If the balance of the Series DA or Series DF units of IA Clarington Money Market Fund falls below that minimum investment threshold because you have redeemed units, your fixed investment amount will continue to automatically switch on a weekly basis to the Transfer Fund(s) pre-selected by you until the initial lump sum investment is depleted. Only Qualified Investors may invest in IA Clarington U.S. Dividend Growth Registered Fund. If an investor is found not to be a Qualified Investor or cannot promptly confirm their eligibility as a Qualified Investor, the Manager reserves the right to redeem that investor’s investment in the Fund as soon as is reasonably practicable or, to switch the investment to securities of IA Clarington U.S. Dividend Growth Fund. An investor, directly or through his/her dealer, is required to promptly communicate to the Manager any changes to the investor’s tax residency. The Manager may, but is not obligated to, from time to time, request confirmation of an investor’s eligibility for this Fund. These measures are necessary to aim to preserve the intended tax treatment for the Fund. See “Who Should Invest in This Fund?” in the Fund’s profile. A non-Qualified investor may incur income capital gains or losses upon being redeemed out of the IA Clarington U.S. Dividend Growth Registered Fund. See “Income Tax Considerations for Investors” on page 42. We may suspend the right to redeem Securities of a Fund or postpone the date of payment upon redemption: during any period when normal trading is suspended on any exchange on which securities or specified derivatives are listed which represent more than 50% by value or underlying market exposure of the total assets of the Fund without allowance for liabilities and if those securities or specified derivatives are not traded on any other exchange that represents a reasonably practical alternative, or with the prior permission of the Canadian securities regulatory authorities. During any period of suspension there will be no calculation of NAV and no securities will be issued, switched or redeemed by the Fund. The calculation of the NAV per security will resume when trading resumes on the exchange or with the permission of the Canadian securities regulatory authorities. 23 If the right to redeem Securities of a Fund is suspended and you make a redemption request during that period, you may either withdraw your redemption request prior to the end of the suspension period or your Securities will be redeemed by the Fund in accordance with the redemption request at the NAV first calculated following the end of the suspension period. Calculating Redemption Fees If you purchase Low Load Securities or DSC Securities, you may have to pay a redemption fee when you redeem your Securities. The redemption fee is based on the date and original purchase price of your Securities. In certain circumstances (for example, redemption on death of a Securityholder or transfer to the beneficiaries of a Securityholder following his or her death) and with documentation satisfactory to us, we may waive or reimburse, in our discretion, the applicable redemption fee, or a portion thereof. The Series I, Series O or Series V agreement pertaining to Series I, Series O or Series V Securities may set out fees applicable to a redemption of those Securities. Low Load Option The redemption fees payable for redeeming Low Load Securities are shown under “Fees and Expenses” on page 27. The fees decline over time. No redemption fee will be payable by you for: switching your investment to another IA Clarington Fund purchased under the Low Load Option, or Securities received through reinvestment of distributions or dividends. Deferred Sales Charge Option The redemption fees payable for redeeming DSC Securities are shown under “Fees and Expenses” on page 27. The fees decline over time. No redemption fee will be payable by you for: switching your investment to another IA Clarington Fund purchased under the Deferred Sales Charge Option, Securities received through reinvestment of distributions or dividends, or redemptions in a calendar year that do not exceed the “Free Redemption Amount”. The “Free Redemption Amount” is equal to: 10% of the number of eligible DSC Securities held by you at December 31 of the previous year, plus 10% of the number of eligible DSC Securities you have purchased during the calendar year on or prior to the date of redemption, less the number of Securities that would have been issued for any distributions or dividends received in cash that are not reinvested in Securities, less the number of Securities previously redeemed by you during the calendar year. Any unused portion of the Free Redemption Amount cannot be carried forward to future years. If you switch Securities of a Fund for Securities of another IA Clarington Fund, any Free Redemption Amount attributable to those Securities exchanged will be transferred on a proportionate basis. Additional information on how we calculate redemption fees may be obtained in the Annual Information Form. Advisor Service Charge Option You do not pay any redemption fee in respect of Series L Securities. If you invest in Series L Securities, your dealer will be charged a redemption fee if you redeem your investment, if you switch your investment to Securities other than Series L Securities or if your Securities are redesignated 24 as Securities of another series within three years of purchase. The redemption fee is based on the original purchase price of the Series L Securities as follows: If redeemed during: Year 1 3.00% Year 2 2.50% Year 3 2.00% After Year 3 Nil Your dealer will not be required to pay a redemption charge if you switch your investment to Securities of another Fund purchased under the Advisor Service Charge Option, or if your Series L Securities were received through the reinvestment of distributions or dividends. Short-Term Trading Fees An investment in the Funds is intended to be a long-term investment. Short-term trading can impose costs on the Funds and their investors. If you redeem or switch Securities of any of the Global & U.S. Balanced Funds and Global Equity Funds within 30 days of purchase, you may be charged a short-term trading fee of up to 2% of the value of the Securities redeemed or switched. If you redeem or switch Securities of these Funds between 31 to 90 days of purchase, then, subject to our policies and procedures, you may be charged a short-term trading fee of up to 2% of the value of the Securities redeemed or switched. We may waive either of these fees at our discretion in special circumstances, generally where it would be unfair to apply the fee to a particular investment and there is no harm caused to the Fund by the redemption. If you redeem or switch Securities of any of the other Funds (other than IA Clarington Short-Term Income Class, IA Clarington Short-Term Bond Fund and IA Clarington Money Market Fund) within 90 days of purchase, then, subject to our policies and procedures, you may be charged a short-term trading fee of up to 2% of the value of the Securities redeemed or switched. We may waive this fee at our discretion in special circumstances. Investors in Series L Securities may be charged directly and not their dealer. These fees do not apply to Securities purchased under IA Clarington’s systematic plans (such as Pre-Authorized Chequing Plan and Systematic Withdrawal Plan) and on automatic switches from Series DA or Series DF units of IA Clarington Money Market Fund to the Transfer Funds under the Dollar-Cost Averaging Service. A switch is treated as a redemption of Securities of one Fund and the simultaneous purchase of Securities of another IA Clarington Fund. Short-term trading fees are paid to the Fund from which the Securities are redeemed or switched and are in addition to any other redemption or switch fees that may be payable. In addition to any applicable short-term trading fees, we may, in our sole discretion, refuse future purchase or switch orders if we determine that your trading activities may be detrimental to the Funds or the other IA Clarington Funds. Optional Services Pre-Authorized Chequing Plan Our PAC Plan allows you to make periodic investments in the Funds (excluding Series DA and Series DF units of IA Clarington Money Market Fund and excluding any series or Fund that has been closed to purchases under a PAC Plan). You may invest weekly, bi-weekly, semi-monthly, monthly, bi-monthly, quarterly, semi-annually or annually. A PAC Plan allows you to: make regular investments of as little as $50 each ($500 for Series E, Series FE and Series P Securities) in the currency in which you invest in a Fund, have the payments drawn directly from your bank account, change the amount you invest at any time, and change the frequency of your investments, or cancel the arrangements, at any time. 25 When you enrol in a PAC Plan, your dealer will send you the current Fund Facts for the series of the Funds in which you are investing. You will not be sent a copy of any amended Fund Facts unless you request that they be sent to you at the time you enrol in a PAC Plan or subsequently request them from your dealer. You can obtain copies of these documents: by calling us toll free at 1-800-530-0204 or sending us an e-mail at [email protected], from our website at www.iaclarington.com, from your dealer, or from the SEDAR website at www.sedar.com. You may exercise your statutory right to withdraw from the initial purchase under the PAC Plan. This right does not apply in respect of any subsequent purchases under the plan, but you continue to have all other statutory rights under securities law, including rights arising from any misrepresentations that may have been made, irrespective of whether you request or receive a copy of the renewal prospectus. See “What Are Your Legal Rights?” on page 47. Systematic Withdrawal Plan You can set up a systematic withdrawal program to receive payments from your investments. Our plan allows you to make periodic withdrawals of at least $100 in the currency in which you invested in a Fund. You can receive payments weekly, bi-weekly, semi-monthly, monthly, bi-monthly, quarterly, semi-annually or annually. We will automatically redeem enough Securities to make the payments to you. There is no charge for this service, other than any applicable redemption fees. You may cancel the plan at any time. The plan is not available for Series DA and Series DF units of IA Clarington Money Market Fund. If your regular withdrawals are greater than the net increase in value of your Fund, you will erode your original investment. Systematic Switch Plan You can set up a systematic switch plan for automated switches between Funds or from or to another IA Clarington Fund (excluding Series DA and Series DF units of IA Clarington Money Market Fund and any series of a Fund that has been closed to switches under new systematic switch plans). Subject to our switch rules, you may switch from a Fund to another IA Clarington Fund within the same account or from the Fund to the same or another IA Clarington Fund between accounts. You must be eligible to switch into a Fund. You may select the frequency of your switches and may cancel the arrangements at any time. You may not switch between Securities bought in Canadian dollars and Securities bought in U.S. dollars or vice versa. A redemption fee may apply if you are switching from Low Load Securities to DSC Securities to Front End Securities. There may be tax consequences to switches. Please see “Switching Securities of the Funds” on page 21 for more details on switching. IA Clarington Elite Program We offer the IA Clarington Elite Program to investors with $250,000 in Eligible Holdings in any one Eligible Account. This program offers preferred management fees on Eligible Holdings. Please speak with your representative about this program. The fees payable under this program are listed in the table under the heading “Management Fee Reductions” on page 28. Redirected Distributions and Dividends Unless you elect to receive cash distributions or dividends from the Funds, distributions and dividends paid by a Fund are automatically reinvested in additional Securities of the Fund. If you elect to receive cash, you may also direct us to invest your cash distributions or dividends from one Fund in Securities of another IA Clarington Fund. 26 Registered Plans We can set up a: registered education savings plan (RESP), registered retirement savings plan (RRSP), locked-in retirement account (LIRA) or locked-in retirement savings plan (LRSP), prescribed retirement income fund (PRIF), registered retirement income fund (RRIF), life income fund (LIF) or locked-in retirement income fund (LRIF), tax-free savings account (TFSA), restricted life income fund (RLIF), and/or restricted locked-in savings plan (RLSP) for you, or you can purchase the Funds for your self-directed registered plan. You can only hold Securities denominated in Canadian dollars in your IA Clarington Registered Plan, other than a TFSA. We encourage you to consult your investment or tax advisor about the tax implications of registered plans. There are no administration fees for any of these plans. The minimum initial investment in any IA Clarington registered plan is $500. Dollar-Cost Averaging Service The Dollar-Cost Averaging Service is a systematic way for you to invest in a Fund or Funds over time. Under this service, you invest a lump sum into Series DA or Series DF units of the IA Clarington Money Market Fund. We refer to this as your “original investment”. A fixed amount of your original investment (equal to 1/52) will automatically switch on a weekly basis, on the first business day of the week following settlement of your original investment, over a one-year period into any number of Transfer Funds pre-selected by you. The automatic switches will be from Series DA or Series DF units of the Fund into Series A or Series F Securities of the Transfer Funds, respectively, of the same sales charge option and subject to the eligibility requirements of the series. Each additional investment into Series DA or Series DF units of the IA Clarington Money Market Fund will be treated as a separate investment under the service. At any point after the start date, upon the receipt of written instructions by you, your remaining original investment in the Series DA or Series DF units of the Fund may be switched into Series A or Series F Securities of the Transfer Funds, respectively, of the same sales charge option and subject to the eligibility requirements of the series. By investing a fixed dollar amount in the Transfer Fund(s) at regular set intervals over a period of time, the “dollar-cost averaging” process may reduce the risk associated with timing a single lump sum investment by diversifying the time at which the securities are purchased over a one year period. Securityholders may benefit from earning interest income in the IA Clarington Money Market Fund prior to the fixed amounts being invested in other mutual funds managed by us. You may not modify or cancel the Dollar-Cost Averaging Service while you hold Series DA or DF units, although you may switch those units at any time. We may discontinue this service at any time. Details of the Dollar-Cost Averaging Service will be available from us upon request. Fees and Expenses This table lists the fees and expenses that you may have to pay if you invest in the Funds. You may have to pay some of these fees and expenses directly. The Funds may have to pay some of these fees and expenses, which will therefore reduce the value of your investment in a Fund. Securityholder approval is not required to effect a change to the basis of the calculation of a fee or expense that is charged to a Fund or its Securityholders by an arm’s length party that could result in an increase in charges to a Fund or its Securityholders. However, any such 27 change will only be made if Securityholders of a Fund are given at least 60 days’ written notice before the change takes effect. We may, at any time, waive these fees and expenses at our discretion. FEES AND EXPENSES PAYABLE BY THE FUNDS Management Fees We are responsible for the daily management of the Funds. As compensation for our services, we receive a management fee. The services include monitoring performance, paying for the investment management services of the portfolio advisor and sub-advisor (where applicable), commissions to dealers (where applicable)and arranging for other services provided to the Funds. These other services include marketing, advertising and product development. For some series of Securities, the Funds pay us a management fee calculated as an annual percentage of NAV and paid monthly based upon the unique aspects of that Fund. This fee differs among Funds and among the series of securities. Series F Securities, for example, have lower management fees because we do not pay any trailing commissions to dealers who sell these Securities. Management fees for Series I, Series O and Series V Securities are negotiated and paid directly to us by the investor or the portfolio manager, as the case may be, not by the Fund, and will not exceed the Series A or Series T management fees of the Fund. Management fees for Series P Securities are paid directly to us by the investor, not by the Fund, and will not exceed the Series E management fees of that Fund. The Series P management fee is paid to us by a redemption of Series P Securities held by the investor. Management fees are subject to applicable taxes. The Manager has the discretion to waive the management fees. In order to avoid duplication of management fees, if a Fund invests directly in a Reference Fund managed by IA Clarington or an affiliate it may purchase Series I Securities (or the equivalent) of the Reference Fund and will not be charged a management fee or a fixed expense charge in respect of those securities. Alternatively, if Series I Securities (or the equivalent) are not purchased in these circumstances, we make sure that there is no duplication of management fees. In addition, if a Fund invests in another mutual fund, it will not pay duplicate sales charges or redemption fees with respect to the purchase or redemption by it of securities in the Reference Fund. Management Fee Reductions We may reduce or rebate a portion of the management fees for certain investors who purchase Securities of a Fund and who pay or incur distribution or other expenses normally paid by a Fund or IA Clarington, to larger investors or to accommodate other special situations, such as investments by pension funds, insurers or other institutional investors. If we reduce or rebate a portion of the management fee, a Fund or IA Clarington pays an amount equal to the reduction either as a special distribution (a “management fee distribution”, in the case of trust funds) or as a direct rebate (in the case of corporate class funds). The management fee distribution or rebate is reinvested in additional Securities of a Fund and is not paid 28 to investors in cash. We may, in our sole discretion, increase, decrease or cease to make any management fee reduction at any time. IA Clarington Elite Program We may offer the management fee reductions set out in the chart below for certain large investments in Eligible Holdings. Management Fee Reductions (basis points) Applicable Series Tier 1 Tier 2 $250,000$500,000$500,000 $1,000,000 Series A, E, EX, F, FE, 5 7.5 FX, L, LM, M, T, X and Y of any Eligible Holding Tier 3 $1,000,000 10 In order to be eligible for the IA Clarington Elite Program, investors must meet the minimum account threshold of $250,000 (calculated at market value) in any one Eligible Account with Eligible Holdings. Once this minimum threshold is reached, an investor is eligible for the fee rate reductions set out above. In determining the fee rate, investors may aggregate their Eligible Holdings within Eligible Accounts. Eligible Accounts are considered to be accounts held by an investor, his or her spouse and dependent minors living at the same address as well as related corporate accounts, subject to our approval. Only Eligible Holdings will be included in determining whether a threshold and subsequent tiers have been met. Investors must sign a standard IA Clarington account linking form in order to link Eligible Accounts. If the market value of your account, less redemptions and switches, falls below the $250,000 minimum threshold, you will no longer receive management fee reductions. These reductions apply to each dollar invested in the series noted above and are based on the total market value of the Eligible Holdings in Eligible Accounts. We will monitor your Eligible Accounts in order to determine the appropriate reduction. The fee reductions are calculated and credited to the relevant investor on each business day and distributed or rebated on a monthly basis. All fee distributions and rebates are automatically reinvested in additional Securities of the relevant series on the last business day of the month. The management fee distributions and rebates are subject to applicable taxes. We may, in our sole discretion, make any changes to the IA Clarington Elite Program, including increasing or decreasing the reductions available, changing or eliminating the tiers or ceasing to offer them altogether. Please speak to your representative for further details on how to participate in the IA Clarington Elite Program. Please also speak to your tax advisor before enrolling in the IA Clarington Elite Program. Performance Fees IA Clarington Focused Balanced Fund, IA Clarington Focused Balanced Class, IA Clarington Focused Canadian Equity Class, IA Clarington Focused U.S. Equity Class and IA Clarington Sarbit Activist Opportunity Class pay a performance fee to us. For each Fund that pays a performance fee, the performance fee will 29 be based on the change in the NAV per Security of the Series A Securities of the Fund from the last business day of December of the previous year to the second last business day of December of the current year, assuming reinvestment of distributions (“Series A performance”). If the Series A performance (as adjusted by the carry forwards from previous years described below) exceeds the increase in value of the benchmark for the relevant Fund over the same period, the Fund will pay a performance fee to us equal to 10% of the excess of Series A performance less the benchmark performance, subject to a performance fee cap of 1.85%, multiplied by the average month-end NAV of the Fund, excluding the NAV of Series I and Series O Securities (where applicable). Performance fees are subject to applicable taxes. The performance fee will be paid within 30 days of December 31, and will be allocated to each series of Securities of the Fund (other than Series I and Series O Securities as applicable, which do not pay performance fees) based on their average monthend NAVs. Series A performance in a year will be adjusted by two carry-forwards: If the Series A performance in a year was more than 18.5% higher than the benchmark performance in a year (so that the maximum performance fee of 1.85% of the NAV of the relevant series was paid), the excess will be carried forward and applied to the Series A performance in subsequent years, where applicable. If the benchmark performance was positive in a year and the Series A performance was lower than the benchmark performance, the deficiency will be carried forward and applied to reduce the Series A performance in subsequent years. These carry-forwards could lead to a Fund paying a performance fee in a year when it would not otherwise be required to, or to a Fund not being required to pay a performance fee in a year when it would otherwise be required to. If both the Series A performance and the benchmark performance are negative, no performance fee will be paid, although carry-forwards to subsequent years will be calculated. The benchmark (each a total return index) for each relevant Fund will be: For IA Clarington Focused Balanced Fund and IA Clarington Focused Balanced Class: 40% S&P TSX Composite Index, 35% S&P 500 Index, 25% DEX All Corporate Bond Index For IA Clarington Focused Canadian Equity Class: 80% S&P TSX Composite Index, 20% S&P 500 Index For IA Clarington Focused U.S. Equity Class: S&P 500 Index For IA Clarington Sarbit Activist Opportunities Class: Russell 3000 Index Operating Expenses We pay the Operating Expenses of the Funds, in exchange for the payment by the Funds of a fixed rate administration fee referred to as “Administration Fee” to us with respect to each series of the Funds, except for Series I and Series V. Administration Fees are subject to applicable taxes. 30 The Administration Fee paid to us by the Funds in respect of a series may, in any particular period, be less than or exceed the Operating Expenses that we incur for the series. The Operating Expenses incurred by us include, but are not limited to, audit fees, fund accounting costs, transfer agency and recordkeeping costs, custodian costs, administration costs and trustee services relating to registered tax plans, costs of printing and disseminating prospectuses, annual information forms, fund facts and continuous disclosure materials, legal fees, investor communication costs and regulatory filing fees. We are not obligated to pay any other expense, cost or fee, including those arising from new government or regulatory requirements relating to the foregoing expenses, costs and fees. The “Fund Costs”, which are payable by the Funds, are fees, costs and expenses associated with all taxes, borrowing and interest, directors’ fees of IA Clarington, Securityholder meeting fees, each independent review committee or other advisory committee, compliance with any governmental and regulatory requirements imposed (including relating to the Operating Expenses), and any new type of costs, expenses or fees, including arising from new government or regulatory requirements relating to the Operating Expenses or related to external services that were not commonly charged in the Canadian mutual fund industry as of June 20, 2013 (July 6, 2010 for Series O Securities). Except as described below, each Series of the Funds is responsible for its proportionate share of common Fund Costs in addition to the costs that it alone incurs. The Manager may, in some years and in certain cases, absorb a portion of a series’ Administration Fee or Fund Costs. The decision to absorb the Administration Fee or Fund Costs, or a portion thereof, is reviewed annually and determined at the discretion of us, without notice to Securityholders. The Administration Fee is equal to a specified percentage of the net asset value of a series, calculated and paid in the same manner as the management fees for the Funds (calculated as an annual percentage of NAV and paid monthly). The rate of the annual Administration Fee for each series is set out below. Fund Series F, DF, F4, F5, F6, F8, F10, FE, FE4, FE5, FE6, FX, FX5, FX6, FX8 Series A, DA Series B, B5 Series E, E4, E5, E6, EX, EX5, EX6 Series L, L4, L5, L6, L8, L10, LM A: 0.14% DA: 0.14% B: 0.23% - DF: 0.08% F: 0.08% L: 0.12% - Series M, O, P, P4, P5, P6 Series T4, T5, T6, T8, T10 Series X, Y O: 0.15% - X: 0.08% - X: 0.28% Money Market Funds IA Clarington Money Market Fund Fixed Income Funds IA Clarington Bond Fund A: 0.25% - IA Clarington Core Plus Bond Fund A: 0.17% - IA Clarington Inhance Bond SRI Fund - F: 0.14% L: 0.25% O: 0.15% E: 0.21% E4: 0.21% F: 0.14% F4: 0.14% FE: 0.21% FE4: 0.21% L: 0.17% L4: 0.17% O: 0.15% P: 0.21% P4: 0.21% B: 0.17% E: 0.21% F: 0.17% FE: 0.21% - - - - - O: 0.15% - - IA Clarington Real Return Bond Fund A: 0.21% - - F: 0.12% IA Clarington Short-Term Bond Fund A: 0.25% - - F: 0.18% - - - - IA Clarington Short-Term Income Class A: 0.15% - - - - - - - IA Clarington Strategic Corporate Bond Class A: 0.21% - E: 0.27% E5: 0.21% F: 0.23% F5: 0.23% L: 0.20% L5: 0.18% - T5: 0.21% - IA Clarington Strategic Corporate Bond Fund A: 0.25% - E: 0.19% E5: 0.19% F: 0.23% F5: 0.25% FE: 0.19% FE5: 0.19% L: 0.19% L5: 0.18% O: 0.15% P: 0.19% P5: 0.19% T5: 0.23% - IA Clarington Tactical Bond Class A: 0.28% - - F: 0.13% F5: 0.13% L: 0.29% L5: 0.24% - T5: 0.28% - IA Clarington Tactical Bond Fund A: 0.29% - - F: 0.17% L: 0.29% O: 0.15% 31 L: 0.22% T4: 0.17% - - Floating Rate Debt Funds IA Clarington Floating Rate Income Fund A: 0.22% - E: 0.19% E5: 0.19% F: 0.16% F5: 0.16% FE: 0.19% FE5: 0.19% L: 0.22% L5: 0.22% P: 0.19% P5: 0.19% T5: 0.22% - IA Clarington U.S. Dollar Floating Rate Income Fund A: 0.27% - E: 0.24% E5: 0.24% F: 0.21% F5: 0.21% FE: 0.24% FE5: 0.24% L: 0.27% L5: 0.27% P: 0.24% P5: 0.24% T5: 0.27% - - E6: 0.19% F6: 0.19% FE: 0.19% FE6: 0.19% L6: 0.28% O: 0.15% P6: 0.19% T6: 0.28% - Diversified Income Funds IA Clarington Inhance Monthly Income SRI Fund - IA Clarington Monthly Income Balanced Fund A: 0.28% - E: 0.17% E6: 0.17% F: 0.17% F6: 0.17% F8: 0.17% L: 0.28% L6: 0.28% O: 0.15% T6: 0.18% T8: 0.28% - IA Clarington Strategic Income Class A: 0.23% - E: 0.20% E6: 0.15% F: 0.18% F6: 0.18% F8: 0.18% L: 0.23% L6: 0.23% L8: 0.14% - T6: 0.23% T8: 0.23% - IA Clarington Strategic Income Fund A: 0.22% - E: 0.16% E6: 0.16% EX: 0.20% EX6:0.20% F: 0.16% F6: 0.18% F8: 0.18% L: 0.21% L6: 0.24% L8: 0.19% O: 0.15% P: 0.16% P6: 0.16% T6: 0.21% T8: 0.20% Y: 0.26% IA Clarington Tactical Income Class A: 0.18% - E: 0.22% E6: 0.22% F: 0.09% F6: 0.13% F8: 0.12% L: 0.18% L6: 0.17% L8: 0.24% - T6: 0.26% T8: 0.24% - IA Clarington Tactical Income Fund A: 0.15% - E: 0.24% E6: 0.24% EX: 0.21% EX6: 0.19% F: 0.19% F6: 0.19% F8: 0.19% FE: 0.24% FE6: 0.24% FX: 0.09% FX6: 0.12% FX8: 0.12% L: 0.16% L6: 0.22% L8: 0.22% O: 0.15% P: 0.24% P6: 0.24% T6: 0.23% T8: 0.23% X: 0.15% IA Clarington Yield Opportunities Fund A: 0.25% - E: 0.25% E5: 0.25% F:0.25% F5: 0.25% FE: 0.25% FE5: 0.25% L: 0.25% L5: 0.25% P: 0.25% P5: 0.25% T5: 0.25% - IA Clarington Canadian Balanced Class A: 0.22% - E: 0.24% E5: 0.24% EX: 0.14% EX5: 0.14% F: 0.19% F5: 0.19% FE: 0.24% FE5: 0.24% FX: 0.17% FX5: 0.17% L: 0.17% L5: 0.13% P: 0.24% P5: 0.24% T5: 0.21% - IA Clarington Canadian Balanced Fund A: 0.18% - E: 0.24% E5: 0.24% F: 0.19% F5: 0.19% FE: 0.24% FE5: 0.24% FX: 0.14% FX5: 0.16% L: 0.17% L5: 0.19% O: 0.15% P: 0.24% P5: 0.24% T5: 0.23% - IA Clarington Focused Balanced Class A: 0.23% - E: 0.13% E5: 0.14% F: 0.19% F5: 0.19% L: 0.26% L5: 0.21% - T5: 0.23% - IA Clarington Focused Balanced Fund A: 0.24% - E: 0.24% E5: 0.24% EX: 0.24% EX5:0.24% F: 0.22% F5: 0.19% FE: 0.24% FE5: 0.24% L: 0.26% L5: 0.23% O: 0.15% P: 0.24% P5: 0.24% T5: 0.20% - IA Clarington Growth & Income Fund A: 0.22% - E: 0.16% E5: 0.16% F: 0.09% F5: 0.09% FE: 0.16% FE5: 0.16% L: 0.22% L5: 0.22% P: 0.16% P5: 0.16% T5: 0.22% - IA Clarington Inhance Balanced SRI Portfolio A: 0.27% - E: 0.22% E6: 0.22% F: 0.19% F6: 0.19% FE: 0.22% FE6: 0.22% L: 0.22% L6: 0.22% O: 0.15% T6: 0.27% - Canadian Balanced Funds 32 IA Clarington Inhance Conservative SRI Portfolio - - E6: 0.22% F6: 0.19% FE6: 0.22% L6: 0.22% - T6: 0.28% IA Clarington Inhance Growth SRI Portfolio A: 0.27% - E: 0.22% F: 0.19% FE: 0.22% L: 0.27% - IA Clarington Canadian Conservative Equity Class A: 0.25% - E: 0.10% E5: 0.10% F: 0.15% F5: 0.05% FE: 0.12% FE5: 0.12% L: 0.27% L5: 0.11% P: 0.12% P5: 0.12% T5: 0.28% - IA Clarington Canadian Conservative Equity Fund A: 0.21% - - F: 0.15% F5: 0.08% L: 0.17% L5: 0.22% O: 0.15% T5: 0.26% - IA Clarington Canadian Dividend Fund A: 0.22% - - F: 0.17% F6: 0.17% - - T6: 0.22% X: 0.21% IA Clarington Canadian Growth Class A: 0.27% - - F: 0.14% - O: 0.15% - - IA Clarington Canadian Leaders Class A: 0.24% - - F: 0.14% O: 0.15% - - IA Clarington Canadian Small Cap Class A: 0.26% - E: 0.21% F: 0.16% FE: 0.21% P: 0.21% - IA Clarington Canadian Small Cap Fund A: 0.25% - E: 0.21% F: 0.14% FE: 0.21% L: 0.25% O: 0.15% P: 0.21% - IA Clarington Dividend Growth Class A: 0.26% - E: 0.14% E6: 0.14% F: 0.11% F6: 0.11% F10: 0.11% FE: 0.14% FE6: 0.14% L6: 0.26% L10: 0.26% O: 0.15% P: 0.14% P6: 0.14% T6: 0.26% T10: 0.25% - IA Clarington Focused Canadian Equity Class A: 0.17% - E: 0.24% E5: 0.24% EX: 0.14% EX5:0.14% F: 0.12% F5: 0.08% FE: 0.24% FE5: 0.24% L: 0.21% L5: 0.09% O: 0.15% P: 0.24% P5: 0.24% T5: 0.21% - IA Clarington Inhance Canadian Equity SRI Class A: 0.32% - E: 0.24% F: 0.18% FE: 0.18% L: 0.32% - IA Clarington North American Opportunities Class A: 0.21% - E: 0.16% F: 0.16% FE: 0.16% L: 0.21% P: 0.16% IA Clarington Strategic Equity Income Class A: 0.20% - E: 0.20% E6: 0.20% F: 0.14% F6: 0.14% FE: 0.20% FE6: 0.20% L: 0.20% L6: 0.20% L8: 0.20% P: 0.20% P6: 0.20% T6: 0.20% T8: 0.20% - IA Clarington Strategic Equity Income Fund A: 0.20% - E: 0.10% E6: 0.10% F: 0.14% F6: 0.10% L: 0.15% L6: 0.17% O: 0.15% T6: 0.19% Y: 0.27% IA Clarington Global Growth & Income Fund A: 0.20% - E: 0.24% E5: 0.24% F: 0.20% F5: 0.20% FE: 0.24% FE5: 0.24% L: 0.20% L5: 0.20% P: 0.24% P5: 0.24% T5: 0.20% - IA Clarington Global Tactical Income Class A: 0.35% - F: 0.13% F6: 0.13% F8: 0.13% L: 0.35% L6: 0.15% L8: 0.35% - T6: 0.35% T8: 0.36% - IA Clarington Global Tactical Income Fund A: 0.21% - E: 0.20% E6: 0.20% F: 0.10% F6: 0.12% F8: 0.13% FE: 0.20% FE6: 0.20% L: 0.21% L6: 0.29% L8: 0.33% O: 0.15% P: 0.20% P6: 0.20% T6: 0.31% T8: 0.31% - IA Clarington Strategic U.S. Growth & Income Fund A: 0.20% - E: 0.20% E6: 0.20% F: 0.14% F6: 0.14% FE: 0.20% FE6: 0.20% L: 0.20% L6: 0.20% L8: 0.20% O: 0.15% P: 0.20% P6: 0.20% T6: 0.20% T8: 0.20% - A: 0.30% - E: 0.24% F: 0.17% F6: 0.17% FE: 0.24% L: 0.30% L6: 0.30% O: 0.15% P: 0.24% T6: 0.30% T8: 0.30% - - - - Canadian Equity Funds L: 0.21% - - - - - - Global & U.S. Balanced Funds - Global Equity Funds IA Clarington Global Equity Fund 33 IA Clarington Global Opportunities Class A: 0.35% - E: 0.24% EX: 0.23% F: 0.32% FE: 0.24% L: 0.39% P: 0.24% T6: 0.35% T8: 0.35% IA Clarington Global Opportunities Fund A: 0.33% - E: 0.10% F: 0.13% L: 0.24% O: 0.15% IA Clarington Global Value Fund A: 0.24% - E: 0.19% F: 0.13% F6: 0.15% FE: 0.19% L: 0.24% L6: 0.24% O: 0.15% P: 0.19% IA Clarington Inhance Global Equity SRI Class A: 0.37% - E: 0.24% F: 0.24% FE: 0.24% L: 0.37% - IA Clarington Focused U.S. Equity Class A: 0.20% - E: 0.20% E5: 0.20% F: 0.16% F5: 0.16% FE: 0.20% FE5: 0.20% L: 0.20% L5: 0.20% O: 0.15% P: 0.20% P5: 0.20% T5: 0.20% - IA Clarington Sarbit Activist Opportunities Class A: 0.22% - E: 0.21% F: 0.15% FE: 0.21% - P: 0.21% - - IA Clarington Sarbit U.S. Equity Class (Unhedged) A: 0.26% - E: 0.16% F: 0.12% F6: 0.12% FE: 0.16% L: 0.31% L6: 0.22% P: 0.16% T6: 0.33% - IA Clarington Sarbit U.S. Equity Fund A: 0.22% - E: 0.16% F: 0.09% F6: 0.12% FE: 0.16% L: 0.23% L6: 0.28% O: 0.15% P: 0.16% T6: 0.26% - IA Clarington U.S. Dividend Growth Fund A: 0.29% - E: 0.19% F: 0.10% F6: 0.10% FE: 0.19% L: 0.29% L6: 0.29% O: 0.15% P: 0.19% T6: 0.29% - IA Clarington U.S. Dividend Growth Registered Fund A: 0.34% - E:0.24% F: 0.15% FE: 0.24% L: 0.34% P:0.24% - - Distinction Balanced Class A: 0.22% - - - L: 0.25% LM: 0.24% M: 0.24% O: 0.15% - - Distinction Bold Class A: 0.28% - - - - M: 0.26% O: 0.15% - - Distinction Conservative Class A: 0.23% - - - L: 0.24% LM: 0.28% M: 0.27% O: 0.15% - - Distinction Growth Class A: 0.26% - - - L: 0.27% LM: 0.25% M: 0.26% O: 0.15% - - Distinction Prudent Class A: 0.26% - - - - M: 0.25% O: 0.15% - - IA Clarington Balanced Portfolio A: 0.21% B: 0.20% B5:0.20% E: 0.20% E5: 0.20% F: 0.20% F5: 0.20% FE: 0.20% FE5: 0.20% L: 0.21% L5: 0.21% - T5: 0.21% - IA Clarington Conservative Portfolio A: 0.20% B: 0.18% B5:0.18% E: 0.18% E5: 0.18% F: 0.18% F5: 0.18% FE: 0.18% FE5: 0.18% L: 0.20% L5: 0.20% - T5: 0.20% - IA Clarington Growth Portfolio A: 0.23% B: 0.22% B5:0.22% E: 0.22% E5: 0.22% F: 0.22% F5: 0.22% FE: 0.22% FE5: 0.22% L: 0.23% L5: 0.23% - T5: 0.23% - IA Clarington Maximum Growth Portfolio A: 0.26% B: 0.24% B5:0.24% E: 0.24% E5: 0.24% F: 0.24% F5: 0.24% FE: 0.24% FE5: 0.24% L: 0.26% L5: 0.26% - T5: 0.26% - IA Clarington Moderate Portfolio A: 0.20% B: 0.18% B5:0.18% E: 0.18% E5: 0.18% F: 0.18% F5: 0.18% FE: 0.18% FE5: 0.18% L: 0.20% L5: 0.20% - T5: 0.20% - A: 0.25% - E: 0.25% E5: 0.25% F: 0.25% F5: 0.25% FE: 0.25% O: 0.15% T5: 0.25% - T6: 0.24% - - - U.S. Equity Funds Distinction Portfolios Managed Portfolios Forstrong Funds Forstrong Global Strategist Balanced Fund 34 L: 0.25% L5: 0.25% FE5: 0.25% Forstrong Global Strategist Growth Fund A: 0.27% - E: 0.27% E5: 0.27% F: 0.27% F5: 0.27% FE: 0.27% FE5: 0.27% L: 0.27% L5: 0.27% O: 0.15% T5: 0.27% - Forstrong Global Strategist Income Fund A: 0.23% - E: 0.23% E5: 0.23% F: 0.23% F5: 0.23% FE: 0.23% FE5: 0.23% L: 0.23% L5: 0.23% O: 0.15% T5: 0.23% - We pay all operating expenses for Series I, and Series V Securities. We may recover all or a portion of Series I operating expenses from the investors in Series I Securities. Recovery of Series V expenses is governed by the terms of the Series V agreement applicable to those Securities. Independent Review Committee The expenses of the Funds’ independent review committee include the compensation payable to the members of the committee and the expenses incurred by the independent review committee in the course of its affairs, including insurance, travel costs and the cost of outside advisors. In 2017, each member of the committee will be paid an annual retainer of $31,000 and the chair will be paid an additional $8,400. In addition, each independent review committee member is entitled to a payment of $1,650 ($525 for a meeting with a single agenda item) for each meeting in excess of four scheduled meetings. The compensation is allocated among all of the IA Clarington Funds for which the independent review committee acts. The committee may change its compensation from time to time as it sees fit. Reference Fund Fees and Expense Where a Fund invests in a Reference Fund, the fees and expenses payable in connection with the management and advisory services of the Reference Fund are in addition to those payable by the applicable Fund. However, we ensure that any Fund which invests in another IA Clarington Fund does not pay duplicate management fees and expenses on the portion of its assets that it invests in the Reference Fund. In addition, a Fund that invests in another mutual fund does not pay duplicate sales charges or redemption fees with respect to the purchase or redemption by it of Securities of the Reference Fund. FEES AND EXPENSES PAYABLE DIRECTLY BY YOU The tables below list the fees and expenses that you may have to pay directly if you invest in the Funds Sales Charges Front End Option Up to 5% of the total amount of Front End Securities purchased (or 5.26% of the net amount invested), negotiable with your dealer. Only Series A, Series B, Series E, Series M and Series T Securities of the Funds are sold under this purchase option. Series A and Series T5 of the Managed Portfolios are not available under this purchase option. Low Load Option Nil. Deferred Sales Charge Option Nil. Advisor Service Charge Option Nil. Only Series L Securities of the Funds are sold under this purchase option. 35 Management and Dealer Fees Management Fee The management fee for Series P Securities is paid directly by Series P investors and is payable directly to us for providing general management services. The maximum annual rate of the management fee for Series P Securities is set out in the “Fund Details” table for each Fund that offers Series P Securities later in this Prospectus. This fee, plus applicable taxes and less any reductions as further described below, is paid to us by a redemption of Series P Securities held in your account. When you invest in Series P Securities, you are eligible for reductions in the Series P management fees. Different rate reductions apply depending upon the market value of the Series P Securities in your Eligible Accounts, as set out in the chart below. You may link Eligible Accounts and the aggregate balance of the market value of the Series P Securities within all of the Eligible Accounts will determine the management fee reduction applicable to the entire Series P investment. In order to determine the rate reduction that applies, we calculate the market value of the Series P Securities at the end of each business day and apply the appropriate reduction to the management fee for that day. Series P management fee reductions are not paid back to you as is the case with management fee rebates on Eligible Holdings. Instead, for Series P Securities, we simply charge a lower management fee. Series P Management Fee Reductions (basis points) Dollar Balance of Series P Securities Series P Management Fee in Eligible Accounts Reduction Less than or equal to $250,000 0 Greater than $250,000 to $500,000 5 Greater than $500,000 to $1,000,000 7.5 Greater than $1,000,000 10 The availability of management fee reductions for Series P Securities is in our sole and absolute discretion. The management fee reductions may be changed or cancelled by us at any time. We are entitled to charge the maximum Series P management fee as set out in the “Fund Details” section of the Prospectus for each Fund that offers Series P Securities. Dealer Service Fee In addition, Series P investors may pay a dealer service fee which is payable to their dealer. This dealer service fee is negotiated with your representative and is payable to your dealer. The dealer service fee will not exceed an annual rate of 1.50% (plus applicable taxes). This dealer service fee is in addition to the management fee payable directly to us. Series P investors who negotiate a dealer service fee may be required to enter into a Series P agreement. If we do not receive a Series P agreement which indicates the negotiated dealer service fee, the fee will be 0%. The management fee, less the applicable Series P management fee reduction, together with the dealer service fee payable by Series P investors are accrued and calculated daily based on the aggregate 36 daily net asset value of the Series P Securities held by you at the end of each business day and paid by you, plus applicable taxes, on the last business day of each month through the automatic redemption by us of the Series P Securities of the applicable Fund held by you. These redemption proceeds will be applied to the payment of the management fee, dealer service fee and applicable taxes. We pay the dealer service fee directly to your dealer. The redemption of Securities held by you may result in taxes payable, please consult your tax advisor prior to investing in Series P Securities. Series P Securities pay an Administration Fee and incur Fund Costs, and in certain cases, pay performance fees. Please see “Fees and Expenses Payable by the Funds” for details. Dealer Advisor Fee Investors in Series F and Series FE Securities pay an annual dealer advisor fee to their dealer. This dealer advisor fee is determined between the investor and the dealer. We may have an arrangement with your dealer to collect the dealer advisor fee from you on behalf of your dealer, by redeeming (without charges) a sufficient number of Series F or Series FE securities from your account on a monthly basis. Where we collect a dealer advisor fee, the dealer advisor fee must not exceed 1.50% annually of the value of the net assets of your Series F or Series FE Securities, as applicable. The dealer advisor fee is subject to applicable provincial and federal taxes and is in addition to any other fees that are separately negotiated with and directly payable to us. Please speak with your dealer about this option and whether it’s available. Series Series F and Series FE Securities pay an Administration Fee and incur Fund Costs, and in certain cases, pay performance fees. Please see “Fees and Expenses Payable by the Funds” for details. Series F and Series FE Securities are designed for investors who participate in programs that charge fees directly to the investor. Fees in connection with these types of programs are negotiated between you and your representative and relate to on-going financial planning advice. These fees will be set out in an agreement between you and your representative’s firm. Series I and Series O Fees Investors in Series I and Series O Securities negotiate and pay us directly a management fee. This fee will not exceed the Series A fee, or if there is no Series A of a Fund, the Series T management fee. Switch Fees For all switches, up to 2% of the NAV of the Securities switched, as negotiated between you and your dealer. No switch fees are charged on automatic switches from Series DA or Series DF units of IA Clarington Money Market Fund to the Transfer Funds under the Dollar-Cost Averaging Service. No switch fees are charged on automatic switches from Series A or Series T5 to Series B of the Managed Portfolios. A short-term trading fee may also be payable. See “Short-Term 37 Trading Fees” below. Redemption Fees Front End Option None. A short-term trading fee may be charged. See “Short-Term Trading Fees” below. Low Load Option You will be charged a redemption fee if you redeem within three years of the date of purchase. The redemption fee is based on the original purchase price of Low Load Securities as follows: If redeemed during: Year 1 Year 2 Year 3 After Year 3 You pay: 3.00% 2.50% 2.25% Nil Only Series A, Series M and Series T Securities are sold under this purchase option. A short-term trading fee may also be charged. See “Short-Term Trading Fees” below. Deferred Sales Charge Option The redemption fee is based on the original purchase price of DSC Securities as follows: If redeemed during: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 After Year 7 You pay: 5.75% 5.50% 5.00% 4.50% 4.00% 3.50% 2.00% Nil Only Series A, Series M and Series T Securities are sold under this purchase option. A short-term trading fee may also be charged. See “Short-Term Trading Fees” below. Securities purchased prior to the date of this Simplified Prospectus will be subject to the redemption fee schedule in effect at the time of the purchase of those Securities. Advisor Service Charge Option 38 None. Your dealer will be charged a redemption fee on a declining scale if you redeem within three years of the date of purchase. A short-term trading fee may be charged. See “Short-Term Trading Fees” below. Short-Term Trading Fees The Global & U.S. Balanced Funds and Global Equity Funds may charge a short-term trading fee of up to 2% of the value of the Securities redeemed or switched within 30 days of purchase. For Securities of these Funds redeemed or switched between 31 to 90 days of purchase, the Funds may charge a short-term trading fee of up to 2% of the value of the Securities redeemed or switched. For all other Funds (excluding IA Clarington Short-Term Income Class, IA Clarington Short-Term Bond Fund and IA Clarington Money Market Fund), a short-term trading fee of up to 2% may be charged on the value of the Securities redeemed or switched within 90 days of purchase. You will not be charged a short-term trading fee on automatic switches from Series DA or Series DF units of IA Clarington Money Market Fund to the Transfer Funds under the Dollar-Cost Averaging Service. We may waive this fee at our discretion in special circumstances. Please see “Short-Term Trading Fees” on page 25 for additional information. Registered Plans No annual administration fee. NSF Fee We may levy a fee of $50 per NSF cheque. Systematic Plans No annual administration fee. If applicable, redemption fees may apply. Courier/Wire Charges If you request courier delivery or wire order of your redemption proceeds, you may be charged the costs of such services. Impact of Sales Charges The following table shows the amount of fees that you would have to pay under the different purchase options available to you if you made an investment of $1,000 in a Fund and if you held that investment for one, three, five or ten years and redeemed immediately before the end of that period. At Time of Purchase 1 Year 3 Years 5 Years 10 Years Up to $50 Nil Nil Nil Nil Deferred Sales Charge Option2, 3 Nil $57.50 $50 $40 Nil No Load Option N/A N/A N/A N/A N/A Low Load Option3 Nil $30 $22.50 Nil Nil Advisor Service Charge Option4 Nil Nil Nil Nil Nil Front End Option1 1. There are no sales charges to purchase Series F, Series FE, Series I, Series O or Series V Securities. However, Series F and Series FE Securities pay a separate fee to their dealer. 2. Redemption charges only apply if you redeem your Securities in a particular year. Redemption charges are shown under “Fees and Expenses” above. 3. However, there are no redemption fees if DSC Securities are not redeemed within seven years of purchase or if Low Load Securities are not redeemed within three years of purchase. 39 4. You are not required to pay a redemption charge under this purchase option. Your dealer will be required to pay a redemption charge if you redeemed within three years of purchase, as described under the section “Advisor Service Charge Option” on page 20. Dealer Compensation Sales Commissions Front End Option You negotiate a commission with your dealer of up to 5% on the amount that you invest ($50 per $1,000 investment) in Series A, Series B, Series DA, Series M or Series T Securities of the Funds. These charges are negotiable with your dealer. Low Load Option We pay your dealer a commission of 2.5% on the amount that you invest ($25 per $1,000 investment) in Series A, Series DA, Series M or Series T Securities of the Funds. Deferred Sales Charge Option We pay your dealer a commission of 5% of the amount you invest ($50 per $1,000 investment) in Series A, Series DA, Series M or Series T Securities of the Funds. Advisor Service Charge Option We pay your dealer a commission of 3% of the amount you invest ($30 per $1,000 investment) in Series L Securities. Switching On a switch, you may be required to pay up to 2% of the value of the Securities switched. This fee is negotiable with your dealer. No switch fees are charged on automatic switches from Series DA or Series DF units of IA Clarington Money Market Fund to the Transfer Funds under the Dollar-Cost Averaging Service. Trailer Fees We pay your dealer (including discount brokers) a trailer fee relating to your investment in Series A, Series B, Series DA, Series E, Series L, Series M, Series T or Series X Securities, which is calculated as a percentage of the daily market value of those securities held by your dealer’s clients. The trailer fee will change, and may increase, if you switch from one purchase option to another. The trailer fee is paid out of management fees that are earned by IA Clarington. Below are the trailer fee rates for each applicable series. L(2) Series A B Purchase Option IA Clarington Money Market Fund Front End 0.25%(3) Low Load(1) 0.25%(3) Deferred Sales Charge(1) 0.25%(3) Front End 0.10% Series A/M/T B/E Front End 1.00%(4) DA Low Load / Deferred Sales Charge(1) 0.50%(4) L/LM(2) X Deferred Sales Charge(1) 0.50%(4) Advisor Service Charge Option 0.25% Front End 0.25% Low Load(1) 0.25% Deferred Sales Charge(1) 0.25% Front End Y Low Load / Advisor Service Charge Deferred Sales Charge(1) X Purchase Option IA Clarington Bond Fund IA Clarington Core Plus Bond Fund IA Clarington Real Return Bond Fund IA Clarington Short-Term Bond Fund IA Clarington Short-Term Income Class IA Clarington Strategic Corporate Bond Fund IA Clarington Strategic Corporate Bond Class IA Clarington Tactical Bond Fund IA Clarington Tactical Bond Class IA Clarington Floating Rate Income Fund IA Clarington U.S. Dollar Floating Rate Income Fund Front End 0.55% 0.50% 0.50% 0.55% 0.25% Low Load(1) 0.25% 0.25% 0.25% 0.25% 0.25% Deferred Sales Charge(1) 0.25% 0.25% 0.25% 0.25% 0.25% 0.70% 0.30% 0.30% 0.50% 0.25% 0.25% 0.60% 0.30% 0.30% Front End 0.50% 0.70% Advisor Service Charge Option 0.25% 0.25% 0.25% 0.30% 0.25% 0.60% 40 0.30% Front End 0.50% Low Load(1) 0.25% Deferred Sales Charge(1) 0.25% Series A/M/T B/E L/LM(2) Front End 1.00% 0.90% 0.90% 1.00% 1.00% 1.00% 1.00% 0.75% Advisor Service Charge Option 0.50% 0.45% 0.50% 0.50% 0.50% 0.50% 0.50% 0.375% X Front End Y Low Load / Advisor Service Charge Deferred Sales Charge(1) 0.50% 0.25% 0.25% 0.75% 0.35% 0.35% Purchase Option IA Clarington Growth & Income Fund IA Clarington Inhance Monthly Income SRI Fund IA Clarington Monthly Income Balanced Fund IA Clarington Strategic Income Fund IA Clarington Strategic Income Class IA Clarington Tactical Income Fund IA Clarington Tactical Income Class IA Clarington Yield Opportunities Fund IA Clarington Canadian Balanced Fund IA Clarington Canadian Balanced Class IA Clarington Focused Balanced Fund IA Clarington Focused Balanced Class IA Clarington Inhance Balanced SRI Portfolio IA Clarington Inhance Conservative SRI Portfolio IA Clarington Inhance Growth SRI Portfolio IA Clarington Canadian Conservative Equity Fund IA Clarington Canadian Conservative Equity Class IA Clarington Canadian Dividend Fund IA Clarington Canadian Growth Class IA Clarington Canadian Leaders Class IA Clarington Canadian Small Cap Fund IA Clarington Canadian Small Cap Class IA Clarington Dividend Growth Class IA Clarington Focused Canadian Equity Class IA Clarington Inhance Canadian Equity SRI Class IA Clarington North American Opportunities Class IA Clarington Strategic Equity Income Fund IA Clarington Strategic Equity Income Class IA Clarington Global Growth & Income Fund IA Clarington Global Tactical Income Fund IA Clarington Global Tactical Income Class IA Clarington Strategic U.S. Growth & Income Fund IA Clarington Global Equity Fund IA Clarington Global Opportunities Fund IA Clarington Global Opportunities Class IA Clarington Global Value Fund IA Clarington Inhance Global Equity SRI Class IA Clarington Focused U.S. Equity Class IA Clarington Sarbit Activist Opportunities Class IA Clarington Sarbit U.S. Equity Fund IA Clarington Sarbit U.S. Equity Class (Unhedged) IA Clarington U.S. Dividend Growth Fund IA Clarington U.S. Dividend Growth Registered Fund Distinction Bold Class Distinction Prudent Class Distinction Balanced Class Distinction Conservative Class Distinction Growth Class Forstrong Global Strategist Balanced Fund Forstrong Global Strategist Growth Fund Forstrong Global Strategist Income Fund IA Clarington Inhance Bond SRI Fund IA Clarington Balanced Portfolio IA Clarington Growth Portfolio IA Clarington Maximum Growth Portfolio IA Clarington Moderate Portfolio IA Clarington Conservative Portfolio 1 Front End 1.00% 0.90% 0.90% 1.00% 1.00% 1.00% 1.00% 0.75% Low Load(1) 0.50% 0.45% 0.50% 0.50% 0.50% 0.50% 0.50% 0.375% Deferred Sales Charge(1) 0.50% 0.45% 0.50% 0.50% 0.50% 0.50% 0.50% 0.375% 1.00% 0.50% 0.50% 1.00% 0.50% 1.00% 1.00% 1.00% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 1.00% 1.00% 1.00% 0.50% 0.50% 0.50% 1.00% 0.50% 0.50% 1.00% 0.50% 0.50% 1.00% 1.00% 1.00% 1.00% 1.00% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 1.00% 1.00% 1.00% 0.50% 0.50% 1.00% 0.50% 1.00% 0.50% 0.50% 1.00% 0.50% 1.00% 0.50% 0.50% 1.00% 0.50% 1.00% 0.50% 0.50% 1.00% 0.50% 0.50% 1.00% 0.50% 1.00% 1.00% 1.00% 1.00% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 1.00% 1.00% 1.00% 1.00% 0.50% 0.50% 0.50% 1.00% 0.50% 0.50% 1.00% 0.50% 1.00% 0.50% 0.50% 1.00% 0.50% 0.50% 1.00% 0.50% 0.50% Front End Low Load(1) Deferred Sales Charge(1) 0.40% 0.50% 1.00% 0.50% 1.00% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 1.00% 0.50% 0.50% 0.50% 0.50% 1.00% 0.50% 0.375% 0.375% 0.75% 0.375% For Securities of a Fund purchased under the Low Load Option or Deferred Sales Charge Option, upon expiry of the redemption fee schedule applicable to those Securities, the trailer fee rate will increase to the trailer fee rate applicable to Securities of the same Fund purchased under the Front End Option. Securities purchased under the Low Load Option or the DSC Option prior to the date of this simplified prospectus will be subject to the trailer fee schedule in effect at the time of purchase of those Securities. 41 2 A trailer fee will not be paid for Securities of a Fund purchased under the Advisor Service Charge Option in the first year following purchase. Upon expiry of the redemption fee schedule applicable to those Securities, the trailer fee rate will increase to the trailer fee rate applicable to Securities of the same Fund purchased under the Front End Option. 3 The trailer fee rate for these series of Securities of this Fund may be adjusted from time to time to a rate up to the amount shown in the table. As of the date hereof, the trailer fee rate is 0%. 4 The trailer fee for the Series DA Securities purchased under the Dollar-Cost Averaging Service will reflect the trailer fee rate applicable to the Securities of the Transfer Funds pre-selected by the investor, and will be up to the amount shown. Dealer Advisor Fee Investors in Series F and Series FE Securities pay an annual dealer advisor fee to their dealer. This dealer advisor fee is determined between the investor and the dealer. We may have an arrangement with your dealer to collect the dealer advisor fee from you on behalf of your dealer, by redeeming (without charges) a sufficient number of Series F or Series FE Securities from your account on a monthly basis. Where we collect a dealer advisor fee, the dealer advisor fee must not exceed 1.50% annually of the value of the net assets of the Series F or Series FE Securities, as applicable, in your account. The dealer advisor fee is subject to applicable provincial and federal taxes and is in addition to any other fees payable to us. Please speak to your dealer about this option and whether it’s available. Dealer Service Fee You may pay a dealer service fee if you invest in Series P Securities. The dealer service fee is negotiated by you with your representative and may be up to an annual rate of 1.50%, plus applicable taxes. This fee is accrued and calculated daily and paid by you through a redemption of Series P Securities, on the last business day of the month. We pay the dealer service fee directly to your dealer. Please see “Fees and Expenses – Fees and Expenses Payable Directly by You – Management and Dealer Fees” on page 36 for further information. Other Sales Incentives We may assist dealers with marketing and educational programs by paying a portion of the cost of such programs. We may also provide promotional items of minimal value to representatives of dealers. These activities are in compliance with applicable laws and regulations and any costs incurred by them will be paid by us and not the Funds. Equity Interests IA Clarington Investments Inc. is a subsidiary of Industrial Alliance. Industrial Alliance is a public company listed on the Toronto Stock Exchange. Industrial Alliance owns, directly or indirectly, 100% of each of FundEx Investments Inc., and Investia Financial Services Inc., each registered mutual fund dealers and 100% of Industrial Alliance Securities Inc., a registered investment dealer. Dealer Compensation from Management Fees For the financial year ended December 31, 2016, IA Clarington paid total cash compensation (sales commissions, trailer fees and support of their marketing, fund promotion or educational activities) to dealers who distribute Securities of the IA Clarington Funds representing approximately 43.2% of the total management fees received by IA Clarington from all of the IA Clarington Funds in existence during this financial year. Income Tax Considerations for Investors This summary outlines the Canadian federal income tax rules that generally apply to individuals, other than trusts, resident in Canada who hold Securities of the Funds as capital property. This summary is based on the current Canadian federal income tax rules under the Tax Act and the regulations thereunder and specific proposals to amend the Tax Act and regulations that have been publicly announced by the Minister of Finance (Canada) prior to the date hereof. This summary is not exhaustive of all tax considerations and is not intended to constitute legal or tax advice to an investor. You should seek independent advice regarding the tax consequences of investing in securities based on your own particular circumstances. More detailed tax information is in the Funds’ Annual Information Form. 42 IA Clarington U.S. Dividend Growth Registered Fund expects to be exempt from U.S. withholding tax on U.S. source dividends and interest, although no assurances can be given in this regard. When You Earn Income If you hold units of a Trust Fund, you earn income on your investment: when the Trust Fund pays a distribution out of net income (which may include management fee distributions) or net realized capital gains, and when you redeem or switch your units of the Trust Fund and realize a capital gain. If you hold shares of a Corporate Class Fund, you earn income on your investment: when CSFI pays an ordinary dividend or a capital gains dividend on shares of the Corporate Class Fund, and when you redeem or switch shares of the Corporate Class Fund and realize a capital gain. Adjusted Cost Base The adjusted cost base, referred to as the “ACB”, of your Securities is an important concept for income tax considerations. This term is used throughout this summary and can be calculated, for a particular series of a Fund, according to the following formula in most situations: Calculation of ACB The amount of your initial investment, including any sales charges paid to your dealer, plus additional investments, including sales charges paid to your dealer, plus where the Securities are shares of a Corporate Class Fund, the ACB of any shares of another Corporate Class Fund that were switched into these Securities prior to January 2017, or the fair market value of any Securities of another Corporate Class Fund that were switched into Securities of the Corporate Class Fund after December 2016, plus reinvested distributions (including management fee distributions), dividends, or management fee rebates, less the portion of any distribution that is a return of capital, less the ACB of any previous redemptions, equals the aggregate ACB of your Securities of a Fund. Key Tax Differences Between Corporate Class Funds and Trust Funds The first key difference is that, whereas each Trust Fund is taxed as a single entity, in the case of a Corporate Class Fund, it is CSFI of which that Corporate Class Fund is a part that is taxed as a single entity. This means that the tax consequences of investing in a particular Corporate Class Fund may be affected not only by the investment activities of that Corporate Class Fund, but also the investment activities of the other Corporate Class Funds of CSFI. For example, any net loss or net capital loss realized in a year on the investments of a Corporate Class Fund will be applied to reduce the income or net realized capital gains of CSFI as a whole; accordingly, these losses will not be available to shelter subsequent income or capital gains of that Corporate Class Fund. A second key difference is that a Trust Fund may pay taxable distributions of particular types of income, whereas a Corporate Class Fund cannot. This has two consequences: taxable distributions paid to investors in a Corporate Class Fund will consist of ordinary dividends (i.e., eligible and/or non-eligible dividends from a taxable Canadian corporation) or capital gains dividends, but not interest and foreign source income; and 43 if CSFI’s income exceeds its deductible expenses, it will be subject to tax under Part I of the Tax Act. In a Trust Fund, this income would be distributed to investors and taxed in their hands at their marginal tax rate. A third key difference is that CSFI’s Board of Directors, in consultation with its management, determines the allocation of any tax liability and any taxable distributions of CSFI among its Corporate Class Funds in a fair and reasonable manner. For investors in a particular Corporate Class Fund, this may produce different returns and tax consequences than if that Fund had been established as a Trust Fund. Trust Funds Distributions Distributions from the Funds may consist of a taxable portion and/or a return of capital. Distributions (including management fee distributions) of income and capital gains from the Funds are taxable in the year they are paid or payable by the Funds. This is the case whether these amounts were paid to you in cash or through reinvestment in additional units. Taxable distributions may include interest income, foreign source income, taxable capital gains and taxable Canadian dividends. Generally, these are taxed as if you had received the amounts directly. An enhanced gross-up and dividend tax credit is available for certain eligible dividends from Canadian corporations. Returns of capital are not taxable to you, but will reduce the ACB of the related Securities. If the ACB of your Securities is reduced to less than zero, you will realize a capital gain equal to the negative amount and the ACB of your units will be restored to zero. If requested, we will provide detailed information about the distributions paid to you. Return of capital is not a predictor of future distributions. The history of distributions paid from the Funds is no indication of future distributions. A portion of the monthly or quarterly distribution rate for any series may consist of a return of capital. The distribution rate for any series may be greater than the return on the Fund’s investments. If the cash distributions to you are greater than the net increase in the value of your investment, the distributions will erode the value of your investment. Please see “Income Tax Considerations for Investors” on page 42 for more details. The price of units of a Trust Fund may include income and capital gains that it has earned and/or realized but not yet distributed. If you invest in a series of units of a Trust Fund before a distribution date for that series, you will have to pay tax on any distributions paid to you. However, the amount of the distribution reinvested in additional units will be added to your ACB. This may be particularly significant if you are purchasing later in the year. We will automatically invest distributions in additional units of a Fund unless you tell us in writing that you would prefer to receive cash distributions. Distributions by a Fund are not guaranteed to occur on a specific date and neither we nor the Fund are responsible for any fees or charges incurred by you because the Fund did not effect a distribution on a particular day. The distribution for any series of units of a Fund may be reduced in the future depending upon the net asset value per unit of a Fund, amongst other factors. A Fund will endeavour to distribute any excess income and capital gains to all series as applicable, in December such that it is not liable for income tax under the Tax Act. We may opt to reinvest the December distribution in additional units of a Fund and to consolidate the units of a Fund immediately after that distribution, so that the total number of outstanding units after the distribution is the same as the number of outstanding units immediately before the distribution, even if you have otherwise opted to receive cash distributions. Redeeming or Switching Units If you redeem units or switch units for Securities of another IA Clarington Fund, you will realize a capital gain (or loss). The capital gain (loss) will be equal to the difference between the amount you receive for the redemption or switch, net of any costs (such as a deferred sales charge), and the ACB of the units. One half of such a capital gain must be included in determining your income. 44 You will be provided with details on the proceeds from the redemption or switch after the transaction. However, in order to calculate your gain or loss, you need to know the ACB of your units before disposition. Distributions that include a return of capital will affect the ACB of your units. Corporate Class Funds Dividends Dividends from Corporate Class Funds may consist of a taxable portion and/or a return of capital, and are taxable in the year received. This is the case whether these amounts were paid to you in cash or through the reinvestments in additional shares. Dividends may include ordinary dividends and capital gains dividends. Capital gains dividends, which will generally be paid by the end of January of the following year, will be treated as realized capital gains, one half of which are included in determining your income. Ordinary dividends, which will generally be paid within the current calendar year, will be treated as taxable dividends in your hands and will be subject to the applicable gross-up and dividend tax credit rules. An enhanced gross-up and dividend tax credit is available for certain eligible dividends from the Corporate Class Funds. Returns of capital are not immediately taxable. Instead, a return of capital reduces the ACB of your shares of the Corporate Class Fund. If the ACB of your shares is reduced to less than zero, you will realize a capital gain equal to the negative amount and the ACB of your shares will be restored to zero. Any further return of capital payments will be taxable capital gains, while your ACB is zero. Return of capital is not a predictor of future dividends. The history of dividends paid by a Corporate Class Fund is no indication of future dividend payments. A portion of the monthly dividend for each series is expected to consist of a return of capital. The dividend rate on a series of shares of a Fund may be greater than the return on the Fund’s investments. If the cash dividends to you are greater than the net increase in value of your investment, the dividends will erode the value of your investment. The price of shares of a Corporate Class Fund may include income and capital gains that CSFI has earned and/or realized but not yet paid out as a dividend. If you invest in a series of shares of a Corporate Class Fund before a dividend is declared on that series, you will have to pay tax on such dividend paid to you. However, the amount of the dividend reinvested in additional shares will be added to your ACB. If requested, you will be provided with information slips containing detailed information about the dividends paid to you. We will automatically invest dividends in additional shares of a Fund unless you tell us in writing that you would prefer to receive cash dividends. Dividends or other distributions by CSFI are not guaranteed to occur on a specific date and neither we nor CSFI is responsible for any fees or charges incurred by you because CSFI did not pay a dividend or other distribution on a particular day. The dividend amount for any series of shares of a Fund may be reduced in the future depending upon the net asset value per share of the Fund, amongst other factors. CSFI may, if necessary to reduce its liability for tax, pay to Securityholders ordinary dividends or capital gains dividends annually. We may opt to reinvest these dividends in additional shares of a Fund, and to consolidate the shares of a Fund immediately after that dividend, so that the total number of outstanding shares after the dividend is the same as the number of outstanding shares immediately before the dividend, even if you have otherwise opted to receive cash dividends. Generally, you are required to include in your income any management fee rebates received. However, in some circumstances you may instead elect to reduce the ACB of your shares by the same amount of the rebate. In certain situations, CSFI may pay taxes rather than pay a dividend to its investors if we determine that it is advantageous to do so and this decision is ratified by the board of directors of CSFI acting reasonably. We will endeavour to manage the affairs of each Corporate Class Fund such that CSFI does not incur a material tax liability in respect of its net income in any year. 45 Switching Shares Between Corporate Class Funds Pursuant to changes to the Tax Act announced in the March 22, 2016 Federal Budget, effective January 1, 2017 a switch of shares of one Corporate Class Fund to shares of another Corporate Class Fund will be a disposition for tax purposes. Accordingly, capital gains and losses will be realized for tax purposes on such a switch. The cost of the shares received on such a switch will be equal to the fair market value of the shares that were switched. Redeeming or Switching Shares As is now the case with switches between Corporate Class Funds, if you redeem or switch shares of a Corporate Class Fund for units of a Trust Fund or Target Click Fund, you will realize a capital gain (or loss). The capital gain (loss) will be equal to the difference between the amount you receive for the redemption or switch, net of any costs (such as a redemption fee), and the ACB of the shares. One half of such a capital gain must be included in determining your income. You will be provided with details on the proceeds from the redemption or switch after the transaction. However, in order to calculate your gain or loss, you need to know the ACB of your shares before disposition. All Funds Switching Between Series Switching Securities of one series of a Fund for Securities of another series of the Fund will not be a disposition for tax purposes and no capital gain (or loss) will be realized. The cost of the Securities received on a switch between series of a Fund will be equal to the aggregate adjusted cost base of the Securities that were switched. Series I, Series O, Series P and Series V Securities You should consult your tax advisor about the tax treatment of management fees paid to us on Series I, Series O, Series P and Series V Securities. Registered Plans Securities of the Funds are, or in the case of IA Clarington Inhance Bond SRI Fund, are expected to be effective at all times, qualified investments under the Tax Act for RRSPs, RRIFs and other registered plans. If you hold Securities of the Funds in an RRSP, RRIF or other registered plan, you generally pay no tax on income earned from, or capital gains realized on the disposition of, those Securities as long as they remain in the registered plan. However, withdrawals from such registered plans (other than withdrawals from TFSAs and returns of contributions from RESPs) will generally be subject to tax. Annuitants of RRSPs and RRIFs and holders of TFSAs should consult with their own tax advisors as to whether Securities of the Funds would be prohibited investments under the Tax Act in their particular circumstances. Buying Securities Late in the Year The NAV of a Security of a Fund may include income and/or capital gains that the Fund has accrued, earned or realized but not yet distributed. You will be taxed on distributions or dividends of a Fund’s income and capital gains even if that income and capital gains is attributable to a time before you purchased Securities. This may be significant if you purchase Securities late in the year, or on or before the date a distribution or dividend will be paid. Funds with a High Portfolio Turnover Rate The higher a Fund’s portfolio turnover rate, the greater the likelihood the Fund will incur capital gains or losses. In the event a Fund realizes capital gains, the gains will, in most cases, be distributed to you and must be included in computing your income for tax purposes for that year. There is not necessarily a relationship between a high turnover rate and the performance of a Fund. Enhanced Tax Information Reporting 46 Pursuant to the Intergovernmental Agreement for the Enhanced Exchange of Tax Information under the CanadaU.S. Tax Convention entered into between Canada and the U.S. on February 5, 2014 (the “IGA”) and related Canadian legislation, the Manager, CSFI and the Trust Funds are required to report certain information (including certain financial information) with respect to securityholders who are U.S. residents and U.S. citizens (including U.S. citizens who are residents or citizens of Canada), and certain other “U.S. persons” as defined under the IGA (excluding Registered Plans), to the CRA. It is expected that the CRA will then provide the information to the U.S. Internal Revenue Service. In addition, to meeting the objectives of the Organization for Economic Co-operation and Development Common Reporting Standards (the “CRS”), the Manager and the Funds are required under Canadian legislation to identify and report to the CRA details and certain financial information relating to unitholders in the Funds who are residents of a country outside of Canada and the U.S. which has adopted the CRS. The CRA is expected to provide that information to the tax authorities of the relevant jurisdiction that has adopted the CRS. What Are Your Legal Rights? Securities legislation in some provinces and territories gives you the right to withdraw from an agreement to buy mutual funds within two business days of receiving the Simplified Prospectus or Fund Facts, or to cancel your purchase within 48 hours of receiving confirmation of your order. Securities legislation in some provinces and territories also allows you to cancel an agreement to buy mutual fund shares and get your money back, or to make a claim for damages, if the Simplified Prospectus, Annual Information Form, Fund Facts or financial statements misrepresent any facts about the Funds. These rights must usually be exercised within certain time limits. For more information, refer to the securities legislation of your province or territory or consult your lawyer. 47 Specific Information about Each of the Mutual Funds Described in this Document Fund Specific Information Information about each Fund is summarized on the following pages. Here is an explanation of what you will find under each heading. Fund Details In each Fund summary you will find a chart that looks like this one. It contains the information described below. Fund Details Type of Fund This tells you how the Fund is classified - whether money market, equity, bond, related to a geographical region or some other type. A global Fund may invest anywhere in the world, whereas an international Fund does not usually invest in Canada or the U.S. Securities Offered This tells you whether the Fund issues units or shares and the series of Securities offered. Start Date This is the date that each series of Securities of the Fund were first offered to the public. Eligibility for Registered Plans This tells you whether the Fund is a qualified investment for registered plans. Management Fees This tells you the amount of the management fee charged to each series of Securities of the Fund. Portfolio Manager This tells you the name of the portfolio manager and sub-advisor, where applicable, of the Fund. What does the Fund invest in? This section is divided into two parts: Investment Objective The investment objective of each Fund is described, including the kinds of securities it uses to achieve this objective. In order to change its fundamental investment objective, each Fund needs the majority approval of its Securityholders at a meeting called to consider the change. Investment Strategies This explains how a Fund plans to achieve its investment objective. Except as described in the Annual Information Form, the Funds follow the standard investment restrictions and policies established by Canadian securities regulators. Socially Responsible Investment Principles for IA Clarington Inhance SRI Funds When selecting investments for the Inhance SRI Funds, attention is given to factors, other than financial factors, that are identified as critical in the overall evaluation of a company’s prospects for future returns. In this regard, the Inhance SRI Funds will typically invest in companies with progressive environmental, social and governance practices. The investment decision making process looks to insights derived from fundamental financial analysis and an assessment of an issuer’s performance respecting corporate governance, employee and community relations, and environmental management. In general, the Inhance SRI Funds will invest in companies that articulate and follow a governance process that ensures an involved board of directors with clear accountabilities and strong risk management practices. The Inhance SRI Funds will seek to invest in issuers that have progressive practices and comprehensive environmental management systems. Eligible companies should derive most of their revenues from products, processes or services that have minimal negative impacts on consumers and local communities. Finally, the Inhance SRI Funds will typically invest in companies that work with their employees and communities where 48 they operate, by pursuing diversity among their management, having progressive employee and supplier relations and displaying competence in the management of human rights. To be eligible for inclusion in an Inhance SRI Fund’s portfolio, a company will generally have an understandable business model and demonstrate a competitive advantage. The portfolio management team will typically examine a company’s earnings, profitability growth, credit position, cash flow and long-term sustainability of its business model. In addition, the portfolio management team will look to invest in securities of companies that they feel are trading below their expected value and sell those securities when the price fully reflects that value. The sub-advisor of the Inhance SRI Funds believes that this investment approach encourages positive change in a number of ways, beginning with investment selection. Once the Funds have invested in a company, the tools of corporate engagement – direct dialogue with company leaders and board of directors, shareholder proposals and proxy voting – allow the further enhancement of value by encouraging environmental, social and governance best practices. Direct dialogue involves everything from asking simple questions of company management in order to clarify understanding of the company’s environmental, social and governance policies, to expressing concern over a specific issue, to conducting a long-term, in-depth dialogue with the company. Proxy voting is one of the most important tools in an investor’s toolbox. Every year, shareholders of publicly traded companies are called upon to vote on a series of resolutions concerning issues ranging from board membership and executive compensation to social and environmental issues. When an Inhance SRI Fund invests in securities of a public company, it will have a right to vote on these important issues. The proxy voting and selection guidelines adopted by the Inhance SRI Funds are updated periodically to reflect the latest developments in the evolution of investing and are available on the website of the sub-advisor of the Inhance SRI Funds. Shareholder proposals or resolutions are formal requests for action that are voted upon at a company’s annual general meeting. The purpose of these resolutions is to focus management’s attention on a particular issue and have them adopt policies or practices that shareholders believe will help them improve their performance in those areas, with a view to reducing risk and increasing shareholder value. What are the Risks of Investing in this Fund? This is where the specific risks of the Fund are set out. For details about the meaning of each risk, see “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. Who Should Invest in this Fund? Information is provided under this heading to help you decide whether investing in a particular Fund is right for you. Investment Risk Classification Methodology Each Fund’s investment risk level is based on the standard deviation of the Fund’s investment returns. The use of standard deviation as a measurement tool allows for a reliable and consistent quantitative comparison of the Fund’s relative volatility and related risk. Standard deviation is widely used to measure volatility of return. Each Fund’s risk is required to be determined in accordance with a standardized risk classification methodology that was adopted by the Canadian Securities Administrators and came into force on March 8, 2017. The methodology is based on the mutual fund’s historical volatility as measured by a 10-year standard deviation of the returns of the mutual fund. The standard deviation represents, generally, the level of volatility in returns that a mutual fund has historically experienced over the 10-year period. For new Funds or Funds which have a historical performance of less than 10 years, we are required to use an appropriate benchmark index to estimate the expected volatility and therefore risk level of the Fund. 49 The different risk levels of the Funds are: Low – standard deviation of 0 to 6 percentage points; typically associated with money market funds or Canadian fixed income funds; Low to Medium – standard deviation of 6 to 11 percentage points; typically associated with balanced funds or global or high yield fixed income funds; Medium – standard deviation of 11 to 16 percentage points; typically associated with equity funds that are diversified among larger Canadian or global equities; Medium to High – standard deviation of 16 to 20 percentage points; typically associated with equity funds that have concentrated investments in specific regions or economic sectors, or in smaller companies; and High – standard deviation over 20 percentage points; typically associated with equity funds that may have concentrated investments in specific regions and/or in particular sectors of the economy where there is a considerable risk of loss. Each Fund’s risk level is reviewed at least once a year and each time a material change is made to a Fund’s investment strategies and/or investment objectives. Details of the methodology used are available on request, at no cost by calling us toll-free at 1-800-530-0204 or e-mailing us at [email protected] or by writing us at the address on the back cover of this document. Distribution Policy This section tells you how and when distributions (distributed by Trust Funds) or dividends (distributed by Corporate Class Funds) are paid by the Fund. We will automatically reinvest distributions and dividends in additional Securities unless you tell us in writing to pay them in cash. No sales charges are payable by you on Securities received as a result of a distribution of Securities by a Fund. In addition, no redemption charges apply to Securities received as a result of a distribution of Securities by a Fund. The history of distributions or dividends paid by a Fund is no indication of future distribution or dividend payments. CSFI distributes dividends to shareholders as set out in this section for each Corporate Class Fund. There are two types of dividends, ordinary dividends and capital gains dividends. The board of directors of CSFI determines when and if a dividend is declared. In appropriate circumstances, in the sole discretion of the board of directors, dividends may be allocated to one or a few Corporate Class Funds rather than proportionately among all of the Corporate Class Funds based on the relative net asset value of the Corporate Class Funds. Only the Monthly Distribution Series (as listed on page 17) will distribute a targeted amount each month. The targeted amount for each series can be found under the heading “Distribution Policy” for each Fund. Fund Expenses Indirectly Borne by Investors As explained in “Fees and Expenses Payable by the Funds” on page 28, each Fund pays us a management fee and all expenses needed to operate and carry on its business. The Fund’s management expense ratio is the fees and expenses payable by the Fund divided by its average NAV over a year. This section tells you the amount of the fees and expenses passed on to a typical investor in a Fund. It will help you compare the cumulative costs of investing in each series of Securities that the Fund offers with the costs of investing in other mutual funds. The table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that: the Fund’s annual performance is a constant 5% per year, and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. 50 Because the 5% performance and management expense ratio are only assumptions, your actual costs may be lower or higher than the amounts shown. Fund expense information will not be provided for a new Fund or a new series of Securities of a Fund because its expenses are not fully known. For more information about expenses, see “Fees and Expenses” on page 27. The information shows the fees and expenses for each series of Securities of the Fund, other than Series I and Series V Securities. Series I and Series P investors, and the portfolio managers in respect of Series O and Series V Securities, pay management fees directly to us in accordance with the agreement governing the holding of Series I, Series O, Series P or Series V Securities. 51 IA Clarington Money Market Fund Fund Details Type of Fund Money Market Securities Offered Series A, Series B, Series DA, Series DF, Series F, Series I, Series L, Series O and Series X units of a mutual fund trust Start Date Series A: January 4, 2000 Series B: December 2002 Series DA: January 7, 2013 Series DF: January 7, 2013 Series F: June 25, 2015 Series I: August 26, 2005 Series L: February 28, 2011 Series O: July 19, 2010 Series X: October 1, 2006 Eligible for Registered Plans Yes Management Fees Series A: 1.00% Series B: 0.40% Series DA: 1.00% Series DF: 0.50% Series F: 0.50% Series I: negotiated and paid by each Series I investor Series L: 1.00% Series O: negotiated and paid by each Series O investor Series X: 0.75% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objectives The Fund’s objective is to obtain as high a level of current interest income as is consistent with the protection of capital liquidity. The Fund will seek to achieve such objective by investing primarily in high quality debt securities and will ensure that it meets at all times the definition of a “money market fund” as prescribed by securities legislation. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: selects money market instruments that offer good relative value, may invest in a number of different issuers, and may adjust the Fund’s weighted average term to maturity in anticipation of interest rate changes, 52 IA Clarington Money Market Fund (continued) strives to maintain a constant $10 unit value, may invest in foreign securities that are permitted investments for a “money market fund” under applicable securities legislation; such investments will generally be less than 30% of the net assets of the Fund, and may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: credit risk currency risk government securities risk interest rate risk large transaction risk repurchase and reverse repurchase transactions and securities lending risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. While the IA Clarington Money Market Fund is administered to maintain a constant NAV of $10 per unit, there is no guarantee that the NAV per unit will not fluctuate. As at May 23, 2017, an IA Clarington Guaranteed investment fund held 11.64% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking interest income and preservation of capital, with low risk tolerance, and planning to invest over the short term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. The Fund allocates its net income to Securityholders at the close of each business day and distributes its net income to Securityholders monthly, on the last business day of the month. 53 IA Clarington Money Market Fund (continued) For Series DA and Series DF, the total amount of reinvested distributions, if any, will be automatically transferred into a Transfer Fund or Transfer Funds after the one-year period following the start date under the Dollar-Cost Averaging Service. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $5.36 3 years $16.88 5 years $29.59 10 years $67.36 Series B expenses payable over: 1 year $5.22 3 years $16.46 5 years $28.85 10 years $65.67 Series DA expenses payable over: 1 year $5.32 3 years $16.77 5 years $29.39 10 years $66.91 Series DF expenses payable over: 1 year $5.20 3 years $16.38 5 years $28.72 10 years $65.37 Series F expenses payable over: 1 year $5.18 3 years $16.33 5 years $28.63 10 years $65.17 Series L expenses payable over: 1 year $5.37 3 years $16.93 5 years $29.68 10 years $65.55 Series O expenses payable over: 1 year $1.29 3 years $4.05 5 years $7.10 10 years $16.17 Series X expenses payable over: 1 year $4.33 3 years $13.65 5 years $23.92 10 years $54.45 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 54 IA Clarington Bond Fund Fund Details Type of Fund Fixed Income Securities Offered Series A, Series F, Series I, Series L, Series O and Series X units of a mutual fund trust Start Date Series A: November 19, 1987 Series F: October 1, 2006 Series I: August 26, 2005 Series L: February 28, 2011 Series O: July 19, 2010 Series X: October 1, 2006 Eligible for Registered Plans Yes Management Fees Series A: 1.45% Series F: 0.35% Series I: negotiated and paid by each Series I investor Series L: 1.45% Series O: negotiated and paid by each Series O investor Series X: 0.75% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objectives The Fund’s objective is to generate a high total rate of return through a combination of interest income and enhancement of capital consistent with safety of capital. Therefore, the Fund invests in high quality fixed income securities that provide investors with as high a level of income as is consistent with the reasonable protection of invested capital. The Fund may also invest a portion of its assets in first mortgages situated in Canada. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: invests primarily in high quality fixed income securities; such debt obligations will consist of bonds, debentures, notes and other obligations, whether secured or unsecured, convertible or not, issued or guaranteed by the Government of Canada or any province or territory of Canada or any agency thereof, the government of any other country or any political subdivision thereof, any international or supra national agency or by any corporation, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as 55 IA Clarington Bond Fund (continued) described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may invest in mortgage loans secured by Canadian properties, including securities that evidence an interest in a pool of such mortgage loans, subject to the limits imposed by NI 81-102, may invest a portion of its assets in fixed income securities rated “BB+” and lower as well as preferred shares, will maintain an overall weighted average investment grade credit rating of “BBB-” or higher on its debt securities, may also invest in warrants or rights to subscribe for any of the above mentioned securities, term deposits with banks or other financial institutions or any other obligations or financial instruments having characteristics similar to the above described securities, selects securities and maturity based on fundamental economic analysis, examining economic growth, inflation and the fiscal and monetary policy in Canada, may invest in foreign securities; such investments will generally be less than 30% of the net assets of the Fund, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: concentration risk credit risk currency risk 56 IA Clarington Bond Fund (continued) derivatives risk ETF risk foreign investment risk government securities risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, two mutual funds managed by us held 16.53% and 11.04%, respectively of the Fund and Industrial Alliance held, on behalf of other investors, 10.61% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking regular income, with low risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. The Fund intends to distribute its net income to Securityholders of the Fund monthly, on the last business day of the month. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $19.91 3 years $62.77 5 years $110.03 10 years $250.45 Series F expenses payable over: 1 year $5.46 3 years $17.22 5 years $30.18 10 years $68.710 57 IA Clarington Bond Fund (continued) Series L expenses payable over: 1 year $20.40 3 years $64.31 5 years $112.71 10 years $256.57 Series O expenses payable over: 1 year $0.89 3 years $2.81 5 years $4.92 10 years $11.21 Series X expenses payable over: 1 year $11.80 3 years $37.19 5 years $65.18 10 years $148.38 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 58 IA Clarington Core Plus Bond Fund Fund Details Type of Fund Fixed Income Securities Offered Series A, Series E, Series E4, Series F, Series F4, Series FE, Series FE4, Series I, Series L, Series L4, Series O, Series P, Series P4 and Series T4 units of a mutual fund trust Start Date Series A: June 20, 2014 Series E: November 3, 2014 Series E4: November 3, 2014 Series F: June 20, 2014 Series F4: June 20, 2014 Series FE: June 25, 2015 Series FE4: June 25, 2015 Series I: June 20, 2014 Series L: June 20, 2014 Series L4: June 20, 2014 Series O: June 20, 2014 Series P: November 3, 2014 Series P4: November 3, 2014 Series T4: June 20, 2014 Eligible for Registered Plans Yes Management Fees Series A: 1.20% Series E: 1.05% Series E4: 1.05% Series F: 0.70% Series F4: 0.70% Series FE: 0.55% Series FE4: 0.55% Series I: negotiated and paid by each Series I investor Series L: 1.20% Series L4: 1.20% Series O: negotiated and paid by each Series O investor Series P: 0.55%(1) Series P4: 0.55%(1) Series T4: 1.20% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. 59 IA Clarington Core Plus Bond Fund (continued) What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide income and the potential for long term capital growth, while preserving capital and mitigating the effects of interest rate fluctuations, by investing primarily in fixed income securities including government bonds, investment grade bonds and high-yield bonds, as well as other income producing securities such as asset-backed securities and senior floating rate loans. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor uses fundamental and macro analysis to select investments and reviews the values of the investments on an ongoing basis, paying particular attention to credit quality and diversification by geographic region, industry sector, size of issuer and credit rating. The Fund: will invest in a combination of fixed income securities including government bonds, investment grade bonds, high yield bonds, asset backed securities and senior loans and other income producing securities, such that the overall weighted average credit rating of the Fund’s portfolio is “BBB-” or higher, will invest primarily in fixed income securities of North American companies, may use interest rate swaps or short-sell government bonds to minimize interest rate risk. Please see below for more information on derivatives and short selling, may from time to time invest a significant portion of the Fund’s assets in foreign companies; such investments will generally be less than 50% of the net assets of the Fund, may hold non-investment grade corporate bonds and debt obligations for strategic reasons. Generally, non-investment grade securities, which may also include senior loans, non-rated securities, floating rate debt instruments, asset-backed and or mortgage-backed securities, and private placements as permitted by securities regulations, will not be more than 25% of the portfolio’s value at cost, may also invest in higher quality emerging market bonds, may hold investments which may be denominated in or have exposure to foreign currencies, will select the maturity of each investment according to market conditions, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, 60 IA Clarington Core Plus Bond Fund (continued) may enter into securities lending, repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use other derivatives such as options, futures, forward contracts and swaps for hedging and nonhedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, and may engage in short selling. A “short-sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk capital depletion risk credit risk currency risk default risk derivatives risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk 61 IA Clarington Core Plus Bond Fund (continued) interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk short selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, a mutual fund managed by us held 25.07% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking monthly income and preservation of capital with low risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series L and Series P units, the Fund intends to distribute net income allocated to each series monthly, on the last business day of each month. For Series E4, Series F4, Series FE4, Series L4, Series P4 and Series T4 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 3% and 5% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 4% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.033 per Series E4, Series F4, Series FE4, Series L4, Series P4 and Series T4 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. Series I and Series O units will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual 62 IA Clarington Core Plus Bond Fund (continued) performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $15.96 3 years $50.31 5 years $88.19 10 years $200.74 Series E expenses payable over: 1 year $14.70 3 years $46.34 5 years $81.23 10 years $184.90 Series E4 expenses payable over: 1 year $13.86 3 years $43.69 5 years $76.59 10 years $174.33 Series F expenses payable over: 1 year $9.66 3 years $30.45 5 years $53.38 10 years $121.50 Series F4 expenses payable over: 1 year $9.56 3 years $30.12 5 years $52.80 10 years $120.18 Series FE expenses payable over: 1 year $8.93 3 years $28.14 5 years $49.32 10 years $112.26 Series FE4 expenses payable over: 1 year $9.66 3 years $30.45 5 years $53.38 10 years $121.50 Series L expenses payable over: 1 year $16.28 3 years $51.31 5 years $89.93 10 years $204.71 Series L4 expenses payable over: 1 year $16.28 3 years $51.31 5 years $89.93 10 years $204.71 Series O expenses payable over: 1 year $0.95 3 years $2.98 5 years $5.22 10 years $11.89 Series P expenses payable over: 1 year $3.05 3 years $9.60 5 years $16.83 10 years $38.30 Series P4 expenses payable over: 1 year $3.05 3 years $9.60 5 years $16.83 10 years $38.30 Series T4 expenses payable over: 1 year $15.96 3 years $50.31 5 years $88.19 10 years $200.74 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 63 IA Clarington Inhance Bond SRI Fund Fund Details Type of Fund Fixed Income Securities Offered Series B, Series E, Series F, Series FE and Series I Units of a mutual fund trust Start Date Series B: December 22, 2016 Series E: December 22, 2016 Series F: December 22, 2016 Series FE: December 22, 2016 Series I: December 22, 2016 Eligible for Registered Plans Yes Management Fees Series B: 1.25% Series E: 1.10% Series F: 0.75% Series FE: 0.60% Series I: negotiated and paid by each Series I investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Vancity Investment Management Limited Vancouver, British Columbia What Does the Fund Invest In? Investment Objective The Fund’s objective is to seek to preserve capital and generate income with the potential for capital appreciation by investing primarily in fixed income securities of government and corporate issuers which meet the sub-advisor’s socially responsible investment principles. The fundamental investment objective may only be changed with the approval of a majority of unitholders at a meeting called for that purpose. Investment Strategies The sub-advisor selects investments by: using fundamental financial analysis to examine a company’s earnings, profitability growth, credit position, cash flow and long-term sustainability of the issuer’s business model, assessing an issuer’s performance respecting corporate governance, employee and community relations, and environmental management, and 64 IA Clarington Inhance Bond SRI Fund (continued) looking for securities that are trading below their expected value and selling these securities when the price fully reflects that value. The Fund: will invest in a diversified selection of government (federal, provincial and municipal) and corporate bonds as well as asset-backed and mortgage-backed securities generally with mid to long terms of maturity, invests in accordance with the socially responsible investment principles described on page 48, by seeking companies with progressive social, environmental and governance practices such as: o companies that derive most of their revenues from products, processes or services that have minimal negative impacts on consumers and local communities, o companies that work with their employees and communities where they operate. These companies pursue diversity among their management, have progressive employee and supplier relations and display competence in the management of human rights, and o companies that have an understandable business model and demonstrate a competitive advantage, may invest in preferred shares, may invest in foreign securities; such investments will generally be less than 30% of the net assets of the Fund, will maintain an overall weighted average investment grade credit rating of "BBB" or higher on its debt securities, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund's investment objective and other strategies, may hold a portion of its assets in cash or short-term money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. 65 IA Clarington Inhance Bond SRI Fund (continued) What are the Risks of Investing in this Fund? The risks of investing in the Fund are: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk credit risk currency risk default risk derivatives risk ETF risk foreign investment risk government securities risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with this Mutual Fund?” beginning on page 5 of this document. As at May 23, 2017, three mutual funds managed by us held 40.88%, 36.63% and 19.69%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking regular income, with low risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance. Distribution Policy Please see “Trust Funds – Distributions” on page 44 for more details of the Fund’s distribution policy. The Fund intends to distribute its net income to unitholders of the Fund monthly, on the last business day of the month. The Fund intends to distribute its net capital gains in December of each year. 66 IA Clarington Inhance Bond SRI Fund (continued) Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series B expenses payable over: 1 year $16.59 3 years $52.29 5 years $91.65 10 years $208.61 Series E expenses payable over: 1 year $15.11 3 years $47.63 5 years $83.48 10 years $190.02 Series F expenses payable over: 1 year $10.60 3 years $33.42 5 years $58.58 10 years $133.34 Series FE expenses payable over: 1 year $9.35 3 years $29.46 5 years $51.64 10 years $117.54 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information 67 IA Clarington Real Return Bond Fund Fund Details Type of Fund Fixed Income Securities Offered Series A, Series F, Series I, Series L and Series O units of a mutual fund trust Start Date Series A: September 8, 2006 Series F: September 8, 2006 Series I: September 8, 2006 Series L: February 28, 2011 Series O: February 15, 2012 Eligible for Registered Plans Yes Management Fees Series A: 1.05% Series F: 0.55% Series I: negotiated and paid by each Series I investor Series L: 1.05% Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund provides investors with a regular level of income that is hedged against inflation by investing primarily in Canadian federal and provincial real return bonds that are indexed to the Canadian inflation rate. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will invest primarily in debt securities with maturities in excess of 5 years, may invest in debt securities with shorter maturities, including securities with maturities less than 365 days, may also invest a portion of its assets in nominal government bonds, corporate bonds, municipal bonds, and asset-backed securities, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, 68 IA Clarington Real Return Bond Fund (continued) will maintain an overall weighted average investment grade credit rating of “BBB-” or higher on its debt securities, may also invest in foreign debt, including sovereign bonds issued by other countries that are denominated in a foreign currency (investment in foreign securities will not generally exceed 30% of the Fund’s assets), may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and .the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk concentration risk credit risk currency risk deflation risk default risk derivatives risk ETF risk foreign investment risk government securities risk interest rate risk large transaction risk liquidity risk 69 IA Clarington Real Return Bond Fund (continued) repurchase and reverse repurchase transactions and securities lending risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, an investor held 21.49% and Industrial Alliance, on behalf of other investors held 34.82%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking regular income, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. The Fund intends to distribute its net income to Securityholders of the Fund monthly, on the last business day of the month. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $14.89 3 years $46.94 5 years $82.27 10 years $187.27 Series F expenses payable over: 1 year $8.01 3 years $25.26 5 years $44.28 10 years $100.80 Series L expenses payable over: 1 year $14.89 3 years $46.95 5 years $82.29 10 years $187.31 Series O expenses payable over: 1 year $1.54 3 years $4.86 5 years $8.53 10 years $19.41 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 70 IA Clarington Short-Term Bond Fund Fund Details Type of Fund Fixed Income Securities Offered Series A, Series F and Series I units of a mutual fund trust Start Date Series A: July 19, 2010 Series F: July 19, 2010 Series I: July 19, 2010 Eligible for Registered Plans Yes Management Fees Series A: 1.25% Series F: 0.65% Series I: negotiated and paid by each Series I investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to seek to provide monthly interest income while preserving capital. The Fund invests primarily in debt securities of Canadian issuers maturing in five years or less. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The portfolio manager uses fundamental analysis to identify, select and monitor investments and reviews the values of individual securities on an ongoing basis, paying particular attention to credit quality and diversification by industry sector, size of issuer and credit rating. The Fund: invests primarily in debt securities issued or guaranteed by the Canadian federal, provincial or municipal governments or issued by Canadian corporations, and may also invest in debt securities issued by U.S. corporations, subject to the limits on investment in foreign securities set out below. The debt securities: may be denominated in Canadian or U.S. dollars, may have a remaining term to maturity of between one and five years, and if issued by Canadian or U.S. corporations, will have a weighted average credit rating of “BBB-” or higher, may invest in foreign securities; such investments will generally be less than 30% of the net assets of the Fund, may generally invest up to 10% of its assets in guaranteed mortgages, as defined in NI 81-102, or mortgage-backed securities, may also invest in debt securities with a term to maturity of greater than five years, 71 IA Clarington Short-Term Bond Fund (continued) may invest a portion of its assets in fixed income securities rated “BB+” and lower as well as preferred shares, will maintain an overall weighted average investment grade credit rating of “BBB-” or higher on its debt securities, hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are the same as the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in the Fund are: asset-backed and mortgage-backed securities risk concentration risk credit risk currency risk default risk derivatives risk ETF risk foreign investment risk government securities risk 72 IA Clarington Short-Term Bond Fund (continued) interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, two mutual funds managed by us held 27.21% and 20.49%%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking regular monthly income, with low risk tolerance, and planning to invest over the short to medium term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. The Fund intends to distribute its net income to Securityholders of the Fund monthly, on the last business day of the month. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $17.62 3 years $55.56 5 years $97.38 10 years $221.67 Series F expenses payable over: 1 year $9.87 3 years $31.13 5 years $54.56 10 years $124.20 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 73 IA Clarington Short-Term Income Class Fund Details Type of Fund Fixed Income Securities Offered Series A shares of a mutual fund corporation Start Date October 5, 2000 Eligible for Registered Plans Yes Management Fee Series A: 0.75% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve a high level of interest income while focusing on credit quality and liquidity by investing primarily in Canadian short-term fixed income instruments. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: selects short-term fixed income instruments that offer good relative value, invests in a number of different issuers, and adjusts the Fund’s weighted average term to maturity in anticipation of interest rate changes, may invest in foreign securities; such investments will generally be less than 30% of the net assets of the Fund, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are the same as the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the 74 IA Clarington Short-Term Income Class (continued) investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk concentration risk corporate class risk credit risk currency risk default risk derivatives risk fund of funds risk government securities risk interest rate risk repurchase and reverse repurchase transactions and securities lending risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, an investor held 15.69% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking preservation of capital, with low risk tolerance and planning to invest over the short term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. The fund will not generally pay a monthly dividend. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year 3 years 5 years 10 years $6.23 $19.63 $34.41 $78.33 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 75 IA Clarington Strategic Corporate Bond Fund Fund Details Type of Fund Fixed Income Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series I, Series L, Series L5, Series O, Series P, Series P5 and Series T5 units of a mutual fund trust Start Date Series A: September 16, 2011 Series E: September 16, 2011 Series E5: September 16, 2011 Series F: September 16, 2011 Series F5: September 16, 2011 Series FE: June 25, 2015 Series FE5: June 25, 2015 Series I: September 16, 2011 Series L: September 16, 2011 Series L5: September 16, 2011 Series O: September 16, 2011 Series P: November 3, 2014 Series P5: November 3, 2014 Series T5: September 16, 2011 Eligible for Registered Plans Yes Management Fees Series A: 1.55% Series E: 1.35% Series E5: 1.35% Series F: 0.80% Series F5: 0.80% Series FE: 0.65% Series FE5: 0.65% Series I: negotiated and paid by each Series I investor Series L: 1.55% Series L5: 1.55% Series O: negotiated and paid by each Series O investor Series P: 0.65%(1) Series P5: 0.65%(1) Series T5: 1.55% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. 76 IA Clarington Strategic Corporate Bond Fund (continued) What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide income and the potential for long term capital growth by investing primarily in fixed income securities with an emphasis on corporate and other higher yielding fixed income securities. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor uses fundamental analysis to select investments and reviews the values of the investments on an ongoing basis, paying particular attention to credit quality and diversification by geographic region, industry sector, size of issuer and credit rating. The Fund: will invest primarily in fixed income securities of North American companies, may from time to time invest a significant portion of the Fund’s assets in non-North American companies; such investments will generally be less than 50% of the net assets of the Fund, may invest a portion (generally no more than 10% of the total NAV of the Fund) of the portfolio in income-producing equity securities, such as trust units (including real estate investment trust or income trust units), limited partnership units or dividend paying common or preferred shares, may invest the fixed-income component of the Fund’s portfolio in bonds, debentures, notes and other obligations, whether secured or unsecured, convertible or not, issued or guaranteed by Canadian federal and provincial governments or agencies, by foreign governments, international or supranational agencies or by companies. Generally, investments in corporate bonds are expected to have a weighted average credit rating of between “B-” and “BBB+”, and investments in foreign government bonds may include bonds issued by developed countries and emerging markets countries, may also hold senior loans, floating rate debt instruments, asset-backed and mortgage-backed securities, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, 77 IA Clarington Strategic Corporate Bond Fund (continued) may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, and may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor will engage in short selling as a complement to the Fund’s current primary discipline of buying securities with the expectation that they will appreciate in market value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk capital depletion risk credit risk currency risk default risk derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk income trust risk interest rate risk 78 IA Clarington Strategic Corporate Bond Fund (continued) large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, Industrial Alliance, on behalf of other investors, held 41.56% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking income and the possibility for capital appreciation, with low risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series L and Series P units, the Fund intends to distribute net income allocated to each series monthly, on the last business day of each month. For Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. Series I and O units will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. 79 IA Clarington Strategic Corporate Bond Fund (continued) Series A expenses payable over: 1 year $21.02 3 years $66.26 5 years $116.14 10 years $264.38 Series E expenses payable over: 1 year $17.41 3 years $54.89 5 years $96.20 10 years $218.98 Series E5 expenses payable over: 1 year $18.29 3 years $57.65 5 years $101.05 10 years $230.02 Series F expenses payable over: 1 year $12.03 3 years $37.93 5 years $66.48 10 years $151.32 Series F5 expenses payable over: 1 year $12.51 3 years $39.44 5 years $69.13 10 years $157.37 Series FE expenses payable over: 1 year $9.60 3 years $30.26 5 years $53.04 10 years $120.73 Series FE5 expenses payable over: 1 year $9.75 3 years $30.73 5 years $53.86 10 years $122.61 Series L expenses payable over: 1 year $20.80 3 years $65.57 5 years $114.93 10 years $261.61 Series L5 expenses payable over: 1 year $20.63 3 years $65.05 5 years $114.02 10 years $259.53 Series O expenses payable over: 1 year $0.93 3 years $2.92 5 years $5.12 10 years $11.65 Series P expenses payable over: 1 year $2.22 3 years $6.99 5 years $12.25 10 years $27.88 Series P5 expenses payable over: 1 year $2.99 3 years $9.44 5 years $16.54 10 years $37.65 Series T5 expenses payable over: 1 year $21.02 3 years $66.26 5 years $116.13 10 years $264.35 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 80 IA Clarington Strategic Corporate Bond Class Fund Details Type of Fund Fixed Income Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series L, Series L5 and Series T5 shares of a mutual fund corporation* Start Date Series A: April 12, 2012 Series E: April 12, 2012 Series E5: April 12, 2012 Series F: April 12, 2012 Series F5: April 12, 2012 Series L: April 12, 2012 Series L5: April 12, 2012 Series T5: April 12, 2012 Eligible for Registered Plans Yes Management Fees Series A: 1.55% Series E: 1.35% Series E5: 1.35% Series F: 0.80% Series F5: 0.80% Series L: 1.55% Series L5: 1.55% Series T5: 1.55% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario *This Fund is closed to new investors and to purchases and switches under pre-existing PAC Plans or other systematic plans. IA Clarington may reopen the Fund in its discretion.. What Does the Fund Invest In? Investment Objectives The Fund’s objective is to provide a return that is similar to the return of a high yield fixed income mutual fund that invests primarily in corporate and other high yielding fixed income securities and is managed by IA Clarington, or an affiliate or associate of IA Clarington. The Fund will seek to achieve its objective by investing primarily, directly or indirectly, in securities held by the Reference Fund and may invest all or a portion of its portfolio in Securities of the Reference Fund. The fundamental investment objectives may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Strategic Corporate Bond Fund, which we refer to as the “Reference Fund”. 81 IA Clarington Strategic Corporate Bond Class (continued) The investment strategies of the Reference Fund are set out on page 76 of this document. The Fund will hold cash or cash equivalents while the investment in units of the Reference Fund is pending or in order to facilitate redemptions. The Fund may use derivatives such as options, futures, forward contracts and swaps for hedging and nonhedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk, fund of funds risk and tracking risk, as well as to risks relating to the Reference Fund. The risks of the Reference Fund are: asset-backed and mortgage-backed securities risk capital depletion risk credit risk currency risk default risk derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. 82 IA Clarington Strategic Corporate Bond Class (continued) As permitted by its investment objectives, the Fund held up to 98.48% of its net assets in units of IA Clarington Strategic Corporate Bond Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking income and the possibility for capital appreciation, with low risk tolerance, and planning to invest over the medium to long term. IA Clarington Strategic Corporate Bond Class may be less appropriate for investments made through a registered plan than IA Clarington Strategic Corporate Bond Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. Series A, E, F and L shares will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E5, Series F5, Series L5 and Series T5 shares, CSFI will make a monthly dividend of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 4% and 6% (for Series E5, Series F5, Series L5 and Series T5 shares) of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 5% (for Series E5, Series F5, Series L5 and Series T5 shares) of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.042 per Series E5, Series F5, Series L5 and Series T5 shares which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $20.48 3 years $64.55 5 years $113.15 10 years $257.55 Series E expenses payable over: 1 year $18.84 3 years $59.40 5 years $104.11 10 years $236.99 Series E5 expenses payable over: 1 year $18.79 3 years $59.24 5 years $103.83 10 years $236.34 Series F expenses payable over: 1 year $12.10 3 years $38.16 5 years $66.89 10 years $152.25 Series F5 expenses payable over: 1 year $11.91 3 years $37.54 5 years $65.80 10 years $149.78 83 IA Clarington Strategic Corporate Bond Class (continued) Series L expenses payable over: 1 year $21.08 3 years $66.44 5 years $116.45 10 years $265.08 Series L5 expenses payable over: 1 year $21.00 3 years $66.21 5 years $116.05 10 years $264.15 Series T5 expenses payable over: 1 year $20.756 3 years $65.42 5 years $114.67 10 years $261.02 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 84 IA Clarington Tactical Bond Fund Fund Details Type of Fund Fixed Income Securities Offered Series A, Series F, Series I, Series L and Series O units of a mutual fund trust Start Date Series A: July 19, 2010 Series F: July 19, 2010 Series I: July 19, 2010 Series L: February 28, 2011 Series O: February 28, 2011 Eligible for Registered Plans Yes Management Fees Series A: 1.60% Series F: 0.80% Series I: negotiated and paid by each Series I investor Series L: 1.60% Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide monthly interest income by investing primarily in fixed income securities, allocated among Canadian and other North American governmental and corporate issuers, and between investment-grade and higher-yielding securities. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor uses fundamental and macro analysis to select investments and reviews the values of the investments on an ongoing basis, paying particular attention to credit quality and diversification by geographic region, industry sector, size of issuer and credit rating. The Fund: will invest in a combination of fixed income securities including government bonds, investment grade bonds, high yield bonds, asset-backed securities and senior loans and other income producing securities, such that the overall weighted average credit rating of the Fund’s portfolio is “BBB-” or higher, will invest primarily in fixed income securities of North American companies, may use interest rate swaps or short-sell government bonds to minimize interest rate risk. Please see below for more information on derivatives and short-selling, 85 IA Clarington Tactical Bond Fund (continued) may from time to time invest a significant portion of the Fund’s assets in non-North American companies; such investments will generally be less than 50% of the net assets of the Fund, may hold non-investment grade corporate bonds and debt obligations. Generally, non-investment grade securities, which may also include senior loans, non-rated securities, floating rate debt instruments, asset-backed and/or mortgage-backed securities as permitted by securities regulations, will not be more than 25% of the portfolio’s value at cost, may also invest in high quality emerging market bonds, may hold investments which may be denominated in or have exposure to foreign currencies, will select the maturity of each investment according to market conditions, may hold a portion of its assets in cash, government bonds or short-term debt securities to manage the liquidity of its portfolio or for defensive purposes to reflect the general market or economic conditions, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending, repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use other derivatives such as options, futures, forward contracts and swaps for hedging and nonhedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, may use credit derivatives products from time to time for purposes of gaining or hedging exposure to a particular company; credit ratings must comply with the general credit quality constraints of the Fund. Credit derivatives offer a flexible way to gain or hedge exposure to a particular corporate credit synthetically. This is generally achieved via the swap market, whereby over-the-counter contracts transfer the credit risk on a particular corporation from a seller to a buy, and may engage in short selling. A “short-sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. 86 IA Clarington Tactical Bond Fund (continued) The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in the Fund are: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk credit risk currency risk default risk derivatives risk emerging markets risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk short selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, Industrial Alliance, on behalf of other investors held 79.28% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. 87 IA Clarington Tactical Bond Fund (continued) Who Should Invest in this Fund? Investors: seeking interest income and preservation of capital, with low risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. The Fund intends to distribute its net income to Securityholders of the Fund monthly, on the last business day of the month. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $16.12 3 years $50.82 5 years $89.07 10 years $202.76 Series F expenses payable over: 1 year $9.88 3 years $31.14 5 years $54.59 10 years $124.26 Series L expenses payable over: 1 year $16.31 3 years $51.41 5 years $90.10 10 years $205.10 Series O expenses payable over: 1 year $0.90 3 years $2.85 5 years $4.99 10 years $11.36 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 88 IA Clarington Tactical Bond Class Fund Details Type of Fund Fixed Income Securities Offered Series A, Series F, Series F5, Series L, Series L5 and Series T5 shares of a mutual fund corporation* Start Date Series A: July 19, 2010 Series F: July 19, 2010 Series F5 : July 19, 2010 Series L: February 28, 2011 Series L5: February 28, 2011 Series T5 : July 19, 2010 Eligible for Registered Plans Yes Management Fees Series A: 1.60% Series F: 0.80% Series F5: 0.85% Series L: 1.60% Series L5: 1.60% Series T5: 1.60% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario *This Fund is closed to new investors and to purchases and switches under pre-existing PAC Plan or other systematic plans. IA Clarington may re-open the Fund in its discretion. What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide a return that is similar to the return of a Canadian tactical fixed income mutual fund. The Fund invests primarily, directly or indirectly, in securities held by a Canadian tactical fixed income mutual fund managed by IA Clarington, or an affiliate or associate of IA Clarington, and may invest all or a portion of its portfolio in Securities of the Reference Fund. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Tactical Bond Fund, which we refer to as the “Reference Fund”. The investment strategies of the Reference Fund are set out on page 85 of this document. The Fund will hold cash or cash equivalents while the investment in units of the Reference Fund is pending or in order to facilitate redemptions. The Fund may use derivatives such as options, futures, forward contracts and swaps for hedging and nonhedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, 89 IA Clarington Tactical Bond Class (continued) currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk, fund of funds risk and tracking risk, as well as to risks relating to the Reference Fund. The risks of the Reference Fund are: capital depletion risk concentration risk credit risk currency risk default risk derivatives risk ETF risk foreign investment risk government securities risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 98.31% of its net assets in units of IA Clarington Tactical Bond Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking interest income and preservation of capital, with low risk tolerance, and planning to invest over the medium to long term. IA Clarington Tactical Bond Class may be less appropriate for investments made through a registered plan than IA Clarington Tactical Bond Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. 90 IA Clarington Tactical Bond Class (continued) Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. For Series A, Series F and Series L shares, CSFI will not make a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series F5, Series L5 and Series T5 shares, CSFI will pay a monthly dividend of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 4% and 6% of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately onetwelfth of 5% of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.035 per Series F5, Series L5 and Series T5 shares, which rates will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $16.35 3 years $51.54 5 years $90.34 10 years $205.63 Series F expenses payable over: 1 year $10.04 3 years $31.65 5 years $55.48 10 years $126.29 Series F5 expenses payable over: 1 year $9.81 3 years $30.94 5 years $54.23 10 years $123.45 Series L expenses payable over: 1 year $16.50 3 years $52.02 5 years $91.17 10 years $207.53 Series L5 expenses payable over: 1 year $16.51 3 years $52.04 5 years $91.21 10 years $207.61 Series T5 expenses payable over: 1 year $16.36 3 years $51.57 5 years $90.39 10 years $205.76 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 91 IA Clarington Floating Rate Income Fund Fund Details Type of Fund Floating Rate Debt Units Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series I, Series L, Series L5, Series P, Series P5 and Series T5 units of a mutual fund trust Start Date Series A: November 1, 2013 Series E: November 3, 2014 Series E5: November 3, 2014 Series F: November 1, 2013 Series F5: November 1, 2013 Series FE: June 25, 2015 Series FE5: June 25, 2015 Series I: November 1, 2013 Series L: December 13, 2013 Series L5: December 13, 2013 Series P: November 3, 2014 Series P5: November 3, 2014 Series T5: November 1, 2013 Eligible for Registered Plans Yes Management Fees Series A: 1.45% Series E: 1.25% Series E5: 1.25% Series F: 0.90% Series F5: 0.90% Series FE: 0.65% Series FE5: 0.65% Series I: negotiated and paid by each Series I investor Series L: 1.45% Series L5: 1.45% Series P: 0.65%(1) Series P5: 0.65%(1) Series T5: 1.45% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. 92 IA Clarington Floating Rate Income Fund (continued) What Does the Fund Invest In? Investment Objectives The Fund’s objective is to provide unitholders with a stream of current monthly income by investing primarily in senior floating rate loans, other floating rate securities and debt obligations of investment grade and noninvestment grade North American and global corporate issuers. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will invest in floating rate debt instruments that typically pay interest quarterly, at a margin or spread above a reference base lending rate (often the London Interbank Offered Rate or LIBOR), resulting in higher payments to investors as the benchmark interest rate increases (and lower payments if the benchmark rate decreases). Such floating rate debt instruments will include senior floating rate loans (“Senior Loans”) which usually represent the senior most part of the capital structure of the issuer and are typically secured against specific collateral of the issuer, often including a majority of the issuer’s assets, and/or shares of subsidiaries. Interest is paid and reset periodically, typically quarterly, on the basis of a base rate, such as LIBOR, plus a margin or spread. The margin is determined at the time of issuance, based on market conditions, the credit quality of the issuer, and term to maturity. Creditor protections for loans are generally stronger than bonds, not just because they are secured, but also due to the more restrictive covenant packages, which often include maintenance covenants that are tested quarterly rather than incurrence-based covenants more common with bonds. Maintenance covenants may include maximum leverage ratios of debt to cash flow measured against senior debt and/or total debt, minimum interest and/or fixed charge cover, and maximum annual capital expenditure. Senior Loans are often issued in connection with recapitalizations, acquisitions, leveraged buyouts, and re-financings, and they are typically structured and administered by a financial institution acting as agent of the investors investing in the Senior Loans. Investments in Senior Loans may be made directly through the agent, as an assignment from another lender who holds a direct interest in the Senior Loan, or as a participation interest in another lender’s portion of the Senior Loan. Typically Senior Loans mature before subordinated securities such as senior or subordinated notes. The sub-advisor will invest in primary offerings of Senior Loans typically managed by one or more of the largest U.S. and global commercial banks; and the sub-advisor may buy and sell Senior Loan participations and/or assignments in transactions with fixed income trading departments of the largest U.S. and global commercial banks, for which the settlement process may be facilitated by an established third party electronic system. Other floating rate debt instruments in which the Fund may invest include floating rate notes (“Floating Rate Notes”). Floating Rate Notes may be secured or unsecured and therefore may rank equally with or may be subordinated to, the Senior Loans. Interest on Floating Rate Notes is paid and reset periodically, typically quarterly, on the basis of a base rate, such as LIBOR, plus a margin or premium. The margin is determined by the credit quality of the issuer, the term to maturity of the Floating Rate Note, and the prevailing market conditions. will also invest in corporate bonds which are investment grade or non-investment grade debt securities that may be secured or unsecured and therefore may rank equally or may be subordinated to the Senior Loans. Corporate bonds are generally priced with a fixed rate of interest and have prepayment protection. Non-investment grade securities may include non-rated securities, asset-backed and/or mortgage backed securities, will hold North American securities, but may also, as market opportunities dictate, include global 93 IA Clarington Floating Rate Income Fund (continued) securities, may also invest in fixed rate debt instruments, of any credit quality and other income producing securities, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The Fund may also invest, directly or through the use of derivatives, ETFs that may, or may not be, managed by third parties. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund's investment objectives and strategies. There will be no duplication of management fees, incentive fees or sale charges between the mutual funds, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, and may engage in short selling. A “short sale” is where the mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor will engage in short selling as a complement to the Fund’s current primary discipline of buying securities with the expectation that they will appreciate in market value. The sub-advisor may only sell short up to 20% of the net portfolio in securities in which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the 94 IA Clarington Floating Rate Income Fund (continued) United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. The sub-advisor will select securities based on fundamental credit analysis of issuers, involving industry analysis, review of business fundamentals, financial position, cash flow and liquidity, as well as analysis of terms, covenants and creditor protection. The sub-advisor will also incorporate top down analysis of the interest rate and credit cycle, as well as market conditions. The sub-advisor will assess relative value, interest rate risk and prepayment risk within the portfolio when constructing and maintaining the Fund’s investments. The subadvisor will focus primarily on contractual returns and not on capital gain potential, looking at the interest carry on the loan. The sub-advisor expects to have almost all of its floating rate debt instruments rated below investment grade. Under normal market conditions, the sub-advisor expects to generally invest 70 – 80% of the assets in floating rate debt instruments and 20 – 30% in other fixed income securities, but that mix may change with market conditions. The Fund diversifies its investments and will generally not invest more than 5% of its net assets in a single senior loan issue. The Fund generally expects to have approximately 10% of its net assets in cash and/or securities that settle within three business days. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk credit risk currency risk default risk derivatives risk ETF risk floating rate loan liquidity risk foreign investment risk interest rate risk large transaction risk leveraged ETF risk liquidity risk prepayment risk reinvestment risk repurchase and reverse repurchase transactions and securities lending risk series risk short selling risk tax risk 95 IA Clarington Floating Rate Income Fund (continued) You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. Who Should Invest in this Fund? Investors: seeking the potential income flow of floating rate instruments that is linked to interest rate changes, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series L and Series P units, the Fund intends to distribute net income allocated to each series monthly, on the last business day of each month. For Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per units of the series at that time is between approximately 4% and 6% of the net asset value of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the net asset value per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, F5, FE5, L5, P5 and T5 units, which rates will remain in effect until adjusted with this distribution policy. Series I units will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $19.33 3 years $60.94. 5 years $106.81 10 years $243.14 Series E expenses payable over: 1 year $16.50 3 years $52.00 5 years $91.15 10 years $207.48 Series E5 expenses payable over: 1 year $16.60 3 years $52.33 5 years $91.73 10 years $208.80 Series F expenses payable over: 1 year $12.19 3 years $38.43 5 years $67.36 10 years $153.33 Series F5 expenses payable over: 1 year $12.09 3 years $38.10 5 years $66.78 10 years $152.01 Series FE expenses payable over: 1 year $9.78 3 years $30.82 5 years $54.02 10 years $122.96 96 IA Clarington Floating Rate Income Fund (continued) Series FE5 expenses payable over: 1 year $9.36 3 years $29.49 5 years $51.70 10 years $117.68 Series L expenses payable over: 1 year $19.65 3 years $61.93 5 years $108.56 10 years $247.10 Series L5 expenses payable over: 1 year $19.54 3 years $61.60 5 years $107.98 10 years $245.78 Series P expenses payable over: 1 year $2.22 3 years $6.99 5 years $12.24 10 years $27.87 Series P5 expenses payable over: 1 year $2.11 3 years $6.65 5 years $11.66 10 years $26.55 Series T5 expenses payable over: 1 year $19.23 3 years $30.61 5 years $106.23 10 years $241.82 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 97 IA Clarington U.S. Dollar Floating Rate Income Fund Fund Details Type of Fund Floating Rate Debt Securities Offered(1) Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5, Series P, Series P5 and Series T5 units of a mutual fund trust Start Date December 29, 2015 Eligible for Registered Plans No Management Fees Series A: 1.45% Series E: 1.25% Series E5: 1.25% Series F: 0.90% Series F5: 0.90% Series FE: 0.65% Series FE5: 0.65% Series L: 1.45% Series L5: 1.45% Series P: 0.65%(2) Series P5: 0.65%(2) Series T5: 1.45% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) May only be purchased in U.S. dollars (2) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide unitholders with a stream of current monthly income in U.S. dollars by investing primarily in senior floating rate loans, other floating rate securities and debt obligations of investment grade and non-investment grade North American and global corporate issuers. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will invest in floating rate debt instruments that typically pay interest quarterly, at a margin or spread above a reference base lending rate (often the London Interbank Offered Rate or LIBOR), resulting in higher payments to investors as the benchmark interest rate increases (and lower payments if the benchmark rate decreases). 98 IA Clarington U.S. Dollar Floating Rate Income Fund (continued) Such floating rate debt instruments will include senior floating rate loans (“Senior Loans”) which usually represent the senior most part of the capital structure of the issuer and are typically secured against specific collateral of the issuer, often including a majority of the issuer’s assets, and/or shares of subsidiaries. Interest is paid and reset periodically, typically quarterly, on the basis of a base rate, such as LIBOR, plus a margin or spread. The margin is determined at the time of issuance, based on market conditions, the credit quality of the issuer, and term to maturity. Creditor protections for loans are generally stronger than bonds, not just because they are secured, but also due to the more restrictive covenant packages, which often include maintenance covenants that are tested quarterly rather than incurrence-based covenants more common with bonds. Maintenance covenants may include maximum leverage ratios of debt to cash flow measured against senior debt and/or total debt, minimum interest and/or fixed charge cover, and maximum annual capital expenditure. Senior Loans are often issued in connection with recapitalizations, acquisitions, leveraged buyouts, and re-financings, and they are typically structured and administered by a financial institution acting as agent of the investors investing in the Senior Loans. Investments in Senior Loans may be made directly through the agent, as an assignment from another lender who holds a direct interest in the Senior Loan, or as a participation interest in another lender’s portion of the Senior Loan. Typically Senior Loans mature before subordinated securities such as senior or subordinated notes. The sub-advisor will invest in primary offerings of Senior Loans typically managed by one or more of the largest U.S. and global commercial banks; and the sub-advisor may buy and sell Senior Loan participations and/or assignments in transactions with fixed income trading departments of the largest U.S. and global commercial banks, for which the settlement process may be facilitated by an established third party electronic system. Other floating rate debt instruments in which the Fund may invest include floating rate notes (“Floating Rate Notes”). Floating Rate Notes may be secured or unsecured and therefore may rank equally with or may be subordinated to, the Senior Loans. Interest on Floating Rate Notes is paid and reset periodically, typically quarterly, on the basis of a base rate, such as LIBOR, plus a margin or premium. The margin is determined by the credit quality of the issuer, the term to maturity of the Floating Rate Note, and the prevailing market conditions. will also invest in corporate bonds which are investment grade or non-investment grade debt securities that may be secured or unsecured and therefore may rank equally or may be subordinated to the Senior Loans. Corporate bonds are generally priced with a fixed rate of interest and have prepayment protection. Non-investment grade securities may include non-rated securities, asset-backed and/or mortgage backed securities, will hold primarily North American securities, but may also, as market opportunities dictate, include global securities, may also invest in fixed rate debt instruments, of any credit quality and other income producing securities, may from time to time invest a portion of its net assets in units or shares of other mutual funds that may be managed by IA Clarington or an affiliate. The Fund may also invest, directly or through the use of derivatives, in ETFs that may, or may not, be managed by third parties. The Fund will generally not invest more than 60% of its net assets in other investment funds. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sale charges between the mutual funds, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, 99 IA Clarington U.S. Dollar Floating Rate Income Fund (continued) may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, may engage in short selling. A “short sale” is where the mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor will engage in short selling as a complement to the Fund’s current primary discipline of buying securities with the expectation that they will appreciate in market value. The sub-advisor may only sell short up to 20% of the net portfolio in securities in which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. The sub-advisor will select securities based on fundamental credit analysis of issuers, involving industry analysis, review of business fundamentals, financial position, cash flow and liquidity, as well as analysis of terms, covenants and creditor protection. The sub-advisor will also incorporate top down analysis of the interest rate and credit cycle, as well as market conditions. The sub-advisor will assess relative value, interest rate risk and prepayment risk within the portfolio when constructing and maintaining the Fund’s investments. The subadvisor will focus primarily on contractual returns and not on capital gain potential, looking at the interest carry on the loan. The sub-advisor expects to have almost all of its floating rate debt instruments rated below investment grade. The Fund diversifies its investments and will generally not invest more than 5% of its net assets in a single senior loan issue. The Fund generally expects to have approximately 10% of its net assets in cash and/or securities that settle within three business days. The Fund may also hedge currency exposure that is not in U.S. dollars, back to U.S. dollars. 100 IA Clarington U.S. Dollar Floating Rate Income Fund (continued) Under normal market conditions, the sub-advisor expects to generally invest 70 – 80% of the assets in floating rate debt instruments and 20 – 30% in other fixed income securities, but that mix may change with market conditions. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in the Fund are: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk credit risk currency risk default risk derivatives risk ETF risk floating rate loan liquidity risk foreign investment risk interest rate risk large transaction risk leveraged ETF risk liquidity risk prepayment risk reinvestment risk repurchase and reverse repurchase transactions and securities lending risk series risk short selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with this Mutual Fund?” beginning on page 5 of this document. As at May 23, 2017, a mutual fund managed by us held 21.34% and an investor held 10.52%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: 101 IA Clarington U.S. Dollar Floating Rate Income Fund (continued) seeking a potential U.S. dollar income flow of floating rate instruments that is linked to interest rate changes, with low to medium risk tolerance, and planning to invest over the medium to long term. This Fund may not be appropriate for investors with a short-term investment horizon or those who do not wish to add U.S. exposure to their portfolio. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series L and Series P units, the Fund intends to distribute net income allocated to each series monthly, on the last business day of each month. For Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Expenses for Series P are not shown because the MER was waived in its entirety as the only investor in this series over the period was IA Clarington Floating Rate Income Fund. Series A expenses payable over: 1 year $19.95 3 years $62.89 5 years $110.24 10 years $250.93 Series E expenses payable over: 1 year $17.12 3 years $53.96 5 years $94.57 10 years $215.27 Series E5 expenses payable over: 1 year $18.06 3 years $56.93 5 years $99.79 10 years $227.16 Series F expenses payable over: 1 year $12.71 3 years $40.05 5 years $70.20 10 years $159.80 Series F5 expenses payable over: 1 year $12.29 3 years $38.73 5 years $67.88 10 years $154.52 Series FE expenses payable over: 1 year $10.50 3 years $33.10 5 years $58.02 10 years $132.07 102 IA Clarington U.S. Dollar Floating Rate Income Fund (continued) Series FE5 expenses payable over: 1 year $10.08 3 years $31.78 5 years $55.70 10 years $126.79 Series L expenses payable over: 1 year $20.69 3 years $65.21 5 years $114.30 10 years $260.17 Series L5 expenses payable over: 1 year $20.58 3 years $64.88 5 years $113.72 10 years $258.85 Series P5 expenses payable over: 1 year $3.05 3 years $9.60 5 years $16.83 10 years $38.30 Series T5 expenses payable over: 1 year $20.37 3 years $64.22 5 years $112.56 10 years $256.21 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 103 IA Clarington Inhance Monthly Income SRI Fund Fund Details Type of Fund Diversified Income Securities Offered Series E6, Series F6, Series FE, Series FE6, Series I, Series L6, Series O, Series P6, Series T6 and Series V units of a mutual fund trust Start Date Series E6: November 3, 2014 Series F6: November 30, 2009 Series: FE: June 25, 2015 Series FE6: June 25, 2015 Series I: November 30, 2009 Series L6: June 20, 2016 Series O: June 20, 2016 Series P6: November 3, 2014 Series T6: November 30, 2009 Series V: November 30, 2009 Eligible for Registered Plans Yes Management Fees Series E6: 1.70% Series F6: 0.90% Series FE: 0.80% Series FE6: 0.80% Series I: negotiated and paid by each Series I investor Series L6: 1.90% Series P6: 0.80%(1) Series O: negotiated and paid by each Series O investor Series T6: 1.90% Series V: negotiated and paid by the portfolio manager or each Series V investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Vancity Investment Management Limited Vancouver, British Columbia (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide a reasonably consistent level of monthly income by investing primarily in fixed income and high yield equity securities of Canadian issuers which meet the sub-advisor’s socially responsible investment principles. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. 104 IA Clarington Inhance Monthly Income SRI Fund (continued) Investment Strategies The sub-advisor selects investments by: using fundamental financial analysis to examine a company’s earnings, profitability growth, credit position, cash flow and long-term sustainability of the issuer’s business model, assessing an issuer’s performance respecting corporate governance, employee and community relations, and environmental management, and looking for securities that the sub-advisor feels are trading below their expected value and selling these securities when the price fully reflects that value. The Fund: invests in a diversified selection of money market instruments, government and corporate bonds, mortgage-backed securities, preferred shares, income or royalty trusts of primarily non-resource issuers, and primarily dividend paying, higher yielding common shares, primarily invests in securities of Canadian issuers, when investing in equities and income trusts, will focus on selecting high quality issuers in relatively stable industries where there is a high degree of assuredness of distributions and the potential for dividend or distribution growth, when investing in fixed income securities, will invest primarily in bonds, mortgage-backed securities, investment grade debentures and other fixed income securities either issued or guaranteed by the Government of Canada, a province or other governmental entity or government or domestic corporations, invests in accordance with the SRI principles by seeking companies with progressive social, environmental and governance practices such as: o companies that derive most of their revenues from products, processes or services that have minimal negative impacts on consumers and local communities, o companies that work with their employees and communities where they operate. These companies pursue diversity among their management, have progressive employee and supplier relations and display competence in the management of human rights, and o companies that have an understandable business model and demonstrate a competitive advantage, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are the same as the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, 105 IA Clarington Inhance Monthly Income SRI Fund (continued) currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk capital depletion risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk government securities risk income trust risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. Who Should Invest in this Fund? Investors: seeking a flow of income, with the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. 106 IA Clarington Inhance Monthly Income SRI Fund (continued) Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series FE, Series I, Series O and Series V units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E6, Series F6, Series FE6, Series L6, Series P6 and Series T6 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.050 per Series E6, Series FE6, Series L6, Series P6 and Series T6 units and $0.061 per Series F6 units which rates will remain in effect until further adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series E6 expenses payable over: 1 year $20.89 3 years $65.86 5 years $115.43 10 years $262.76 Series F6 expenses payable over: 1 year $12.07 3 years $38.06 5 years $66.71 10 years $151.86 Series FE expenses payable over: 1 year $10.98 3 years $34.60 5 years $60.65 10 years $138.06 Series FE6 expenses payable over: 1 year $11.04 3 years $34.79 5 years $60.98 10 years $138.81 Series L6 expenses payable over: 1 year $25.95 3 years $81.81 5 years $143.40 10 years $326.41 Series O expenses payable over: 1 year $1.60 3 years $5.04 5 years $8.84 10 years $20.11 Series P6 expenses payable over: 1 year $2.11 3 years $6.66 5 years $11.67 10 years $26.57 Series T6 expenses payable over: 1 year $24.21 3 years $76.33 5 years $133.79 10 years $304.54 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 107 IA Clarington Monthly Income Balanced Fund Fund Details Type of Fund Diversified Income Securities Offered Series A, Series E, Series E6, Series F, Series F6, Series F8, Series I, Series L, Series L6, Series O, Series T6 and Series T8 units of a mutual fund trust Start Date Series A: June 20, 2016 Series E: June 20, 2016 Series E6: June 20, 2016 Series F: June 20, 2016 Series F6: June 1, 2009 Series F8: June 1, 2009 Series I: August 26, 2005 Series L: June 20, 2016 Series L6: June 25, 2015 Series O: July 19, 2010 Series T6: July 9, 2007 Series T8: July 31, 1998 Eligible for Registered Plans Yes Management Fees Series A: 1.85% Series E: 1.75% Series E6: 1.75% Series F: 0.75% Series F6: 0.75% Series F8: 0.75% Series I: negotiated and paid by each Series I investor Series L: 1.85% Series L6: 1.85% Series O: negotiated and paid by each Series O investor Series T6: 1.85% Series T8: 1.85% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objectives The Fund’s objective is to provide a consistent stream of income. The Fund will seek to achieve such objective by investing in fixed income and equity securities, while maintaining some potential for capital growth. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: 108 IA Clarington Monthly Income Balanced Fund (continued) invests in short-term and long-term debt obligations of Canadian and foreign issuers and invests in equity securities of high quality Canadian and foreign issuers, including income trusts, focuses on diversification between fixed income and long-term capital growth, invests in cash, fixed income and equity securities, adjusts the percentage invested in each asset class based on changes in the market outlook for each asset class, examines economic indicators like growth, inflation and monetary policy to provide a framework for selecting appropriate securities, selects a variety of investment terms based on the interest rate outlook, invests in government and corporate securities to diversify its holdings, examines the financial statistics of each potential investment, to determine whether the investment is attractively priced, seeks diversification through investment in securities of companies in many industries, may invest in foreign securities; such investments may be up to 45% of the cost amount of the Fund, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 75%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are the same as the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. 109 IA Clarington Monthly Income Balanced Fund (continued) What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk credit risk currency risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk government securities risk income trust risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, an investor held 32.25% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. As permitted by its investment objectives, the Fund held up to 15.15% of its net assets in shares of IA Clarington Dividend Growth Class, up to 17.52% of its net assets in units of IA Clarington Global Value Fund and up to 13.51% of its net assets in units of IA Clarington U.S. Dividend Growth Fund during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking a flow of income, with the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. 110 IA Clarington Monthly Income Balanced Fund (continued) Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, Series E, Series F and Series L units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E6, Series F6, Series F8, Series L6, Series T6 and Series T8 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% (for Series E6, Series F6, Series L6 and Series T6 units), or between approximately 7% and 9% (for Series F8 and Series T8 units), of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% (for Series E6, Series F6, Series L6 and Series T6 units), and approximately one-twelfth of 8% (for Series F8 and Series T8 units) of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.062 per Series F6 unit, $0.067 per Series F8 unit, $0.050 per Series E6 and Series L6 and $0.044 per Series T6 unit and $0.038 per Series T8 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series I and O units, the Fund will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.98 3 years $81.89 5 years $143.54 10 years $326.74 Series E expenses payable over: 1 year $22.89 3 years $72.15 5 years $126.46 10 years $287.85 Series E6 expenses payable over: 1 year $23.60 3 years $74.41 5 years $130.43 10 years $296.88 Series F expenses payable over: 1 year $11.55 3 years $36.40 5 years $63.80 10 years $145.23 Series F6 expenses payable over: 1 year $11.73 3 years $36.98 5 years $64.82 10 years $147.56 Series F8 expenses payable over: 1 year $11.35 3 years $35.78 5 years $62.71 10 years $142.75 Series I expenses payable over: 1 year $0.77 3 years $2.44 5 years $4.27 10 years $9.72 Series L expenses payable over: 1 year $26.15 3 years $82.43 5 years $144.48 10 years $328.88 Series L6 expenses payable over: 1 year $26.37 3 years $83.13 5 years $145.71 10 years $331.68 111 IA Clarington Monthly Income Balanced Fund (continued) Series O expenses payable over: 1 year $1.71 3 years $5.40 5 years $9.46 10 years $21.54● Series T6 expenses payable over: 1 year $24.80 3 years $78.18 5 years $137.04 10 years $311.94 Series T8 expenses payable over: 1 year $26.21 3 years $82.62 5 years $144.82 10 years $329.66 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 112 IA Clarington Strategic Income Fund Fund Details Type of Fund Diversified Income Securities Offered Series A, Series E, Series E6, Series EX, Series EX6, Series F, Series F6, Series F8, Series I, Series L, Series L6, Series L8, Series O, Series P, Series P6, Series T6, Series T8 and Series Y units of a mutual fund trust Start Date Series A: August 8, 2011 Series E: November 3, 2014 Series E6: November 3, 2014 Series EX: August 8, 2011(1) Series EX6: August 8, 2011(1) Series F: August 8, 2011 Series F6: August 8, 2011 Series F8: July 5, 2004 Series I: August 8, 2011 Series L: August 8, 2011 Series L6: August 8, 2011 Series L8: August 8, 2011 Series O: August 8, 2011 Series P: November 3, 2014 Series P6: November 3, 2014 Series T6: August 8, 2011 Series T8: August 8, 2011 Series Y: December 18, 1996(2) Eligible for Registered Plans Yes Management Fees Series A: 1.90% Series E: 1.75% Series E6: 1.75 Series EX: 1.55% Series EX6: 1.55% Series F: 0.75% Series F6: 0.75% Series F8: 0.75% Series I: negotiated and paid by each Series I investor Series L: 1.90% Series L6: 1.90% Series L8: 1.90% Series O: negotiated and paid by each Series O investor Series P: 0.75%(3) Series P6: 0.75%(3) Series T6: 1.90% Series T8: 1.90% Series Y: 1.85% 113 IA Clarington Strategic Income Fund (continued) Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) Effective October 24, 2014, all of the issued and outstanding Series E and Series E6 Securities were re-designated as Series EX and Series EX6 Securities, respectively. Series EX and Series EX6 Securities are closed to new investors. Investors who currently hold these series may purchase additional Securities. IA Clarington may re-open these series to new investors in its discretion. (2) Effective August 8, 2011, all of the issued and outstanding Series T8 Securities were re-designated as Series Y Securities. (3) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide a consistent stream of income and capital appreciation by investing primarily in Canadian equity and fixed income investments. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will invest primarily in Canadian equity and fixed income securities, may generally invest up to 49% of its assets in foreign securities, may generally invest up to 70% of its assets in either equity or fixed income securities; the allocation between equity and fixed income securities will be determined on the basis of general market or economic conditions, may invest the fixed income component of its portfolio in bonds, debentures, notes and other obligations, whether secured or unsecured, convertible or not, issued or guaranteed by Canadian or foreign governments, international or supranational agencies or corporations. Generally, investments in corporate bonds are expected to have a weighted average credit rating in a range of “B-” to “BBB+”, may invest the equity component of its portfolio in common shares, preferred shares, convertible preferred shares, income trust units, real estate investment trusts (REITs), and other equity securities deemed appropriate, may also hold senior loans, floating rate debts instruments, asset-backed and mortgage-backed securities, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, 114 IA Clarington Strategic Income Fund (continued) may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, and may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk credit risk currency risk default risk derivatives risk 115 IA Clarington Strategic Income Fund (continued) equity market risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk income trust risk interest rate risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page ● of this document. Who Should Invest in this Fund? Investors: seeking a flow of income and the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, Series E, Series EX, Series F, Series L and Series P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E6, Series EX6, Series F6, Series L6, Series P6 and Series T6 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.050 per Series E6, Series EX6, Series F6, Series L6, Series P6 and Series T6 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series F8, Series L8, Series T8 and Series Y units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for such series in January of each year. If the annualized monthly distribution 116 IA Clarington Strategic Income Fund (continued) per unit of the series at that time is between approximately 7% and 9% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 8% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.035 per Series F8 unit, $0.067 per Series L8 unit, $0.067 per Series T8 unit and $0.027 per Series Y unit which rates will remain in effect until adjusted in accordance with this distribution policy. For Series I and Series O units, the Fund will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $24.73 3 years $77.96 5 years $136.64 10 years $311.03 Series E expenses payable over: 1 year $22.10 3 years $69.66 5 years $122.10 10 years $277.92 Series E6 expenses payable over: 1 year $21.84 3 years $68.86 5 years $120.69 10 years $274.73 Series EX expenses payable over: 1 year $20.16 3 years $63.55 5 years $111.39 10 years $253.55 Series EX6 expenses payable over: 1 year $20.68 3 years $65.19 5 years $114.27 10 years $260.10 Series F expenses payable over: 1 year $10.61 3 years $33.45 5 years $58.63 10 years $133.46 Series F6 expenses payable over: 1 year $10.79 3 years $34.02 5 years $59.62 10 years $135.72 Series F8 expenses payable over: 1 year $10.88 3 years $34.30 5 years $60.12 10 years $136.85 Series L expenses payable over: 1 year $25.37 3 years $79.98 5 years $140.19 10 years $319.10 Series L6 expenses payable over: 1 year $25.40 3 years $80.07 5 years $140.34 10 years $319.45 Series L8 expenses payable over: 1 year $24.78 3 years $78.13 5 years $136.95 10 years $311.74 Series O expenses payable over: 1 year $0.82 3 years $2.57 5 years $4.51 10 years $10.27 Series P expenses payable over: 1 year $1.89 3 years $5.97 5 years $10.46 10 years $23.80 117 IA Clarington Strategic Income Fund (continued) Series P6 expenses payable over: 1 year $1.93 3 years $6.08 5 years $10.66 10 years $24.25 Series T6 expenses payable over: 1 year $24.44 3 years $77.04 5 years $135.03 10 years $307.36 Series T8 expenses payable over: 1 year $24.52 3 years $77.30 5 years $135.49 10 years $308.41 Series Y expenses payable over: 1 year $24.44 3 years $77.05 5 years $135.05 10 years $307.41 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 118 IA Clarington Strategic Income Class Fund Details Type of Fund Diversified Income Securities Offered Series A, Series E, Series E6, Series F, Series F6, Series F8, Series L, Series L6, Series L8, Series T6 and Series T8 shares of a mutual fund corporation* Start Date Series A: May 30, 2012 Series E: May 30, 2012 Series E6: May 30, 2012 Series F: May 30, 2012 Series F6: May 30, 2012 Series F8: May 30, 2012 Series L: May 30, 2012 Series L6: May 30, 2012 Series L8: May 30, 2012 Series T6: May 30, 2012 Series T8: May 30, 2012 Eligible for Registered Plans Yes Management Fees Series A: 1.90% Series E: 1.55% Series E6: 1.55% Series F: 0.75% Series F6: 0.75% Series F8: 0.75% Series L: 1.90% Series L6: 1.90% Series L8: 1.90% Series T6: 1.90% Series T8: 1.90% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario * This Fund is closed to new investors and to purchases and switches under pre-existing PAC Plans or other systematic plans. IA Clarington may reopen the Fund in its discretion. What Does the Fund Invest In? Investment Objectives The Fund’s objective is to provide a return that is similar to the return of a diversified income mutual fund that invests primarily in Canadian equity and fixed income securities and is managed by IA Clarington, or an affiliate or associate of IA Clarington. The Fund will seek to achieve its objective by (i) investing in Securities of the Reference Fund, or by (ii) investing in Canadian equity and fixed income securities similar to those held by the Reference Fund. 119 IA Clarington Strategic Income Class (continued) The fundamental investment objectives may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Strategic Income Fund, which we refer to as the “Reference Fund”. The investment strategies of the Reference Fund are set out on page 114 of this document. The Fund will hold cash or cash equivalents while the investment in units of the Reference Fund is pending or in order to facilitate redemptions. The Fund may use derivatives such as options, futures, forward contracts and swaps for hedging and nonhedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk, fund of funds risk and tracking risk, as well as to risks relating to the Reference Fund. The risks of the Reference Fund are: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk credit risk currency risk default risk derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk income trust risk interest rate risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk 120 IA Clarington Strategic Income Class (continued) short selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 98.52% of its net assets in units of IA Clarington Strategic Income Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking a flow of income and the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. IA Clarington Strategic Income Class may be less appropriate for investments made through a registered plan than IA Clarington Strategic Income Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. Series A, Series E, Series F and Series L shares will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E6, Series F6, Series F8, Series L6, Series L8, Series T6 and Series T8 shares, CSFI will make a monthly dividend of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 5% and 7% (for Series E6, Series F6, Series L6 and Series T6 shares), or between approximately 7% and 9% (for Series F8, Series L8 and Series T8 shares), of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 6% (for Series E6, Series F6, Series L6 and Series T6 shares), and approximately one-twelfth of 8% (for Series F8, Series L8 and Series T8 shares) of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.050 per Series E6, Series F6, Series L6 and Series T6 shares and $0.067 per Series F8 share and $0.059 for Series L8 and Series T8 shares, which rates will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $24.92 3 years $78.55 5 years $137.67 10 years $313.38 Series E expenses payable over: 1 year $20.42 3 years $64.36 5 years $112.82 10 years $256.80 121 IA Clarington Strategic Income Class (continued) Series E6 expenses payable over: 1 year $19.03 3 years $59.99 5 years $105.15 10 years $239.35 Series F expenses payable over: 1 year $10.98 3 years $34.62 5 years $60.68 10 years $138.12 Series F6 expenses payable over: 1 year $10.68 3 years $33.65 5 years $58.99 10 years $134.27 Series F8 expenses payable over: 1 year $11.04 3 years $34.82 5 years $61.03 10 years $138.92 Series L expenses payable over: 1 year $25.57 3 years $80.59 5 years $141.26 10 years $321.55 Series L6 expenses payable over: 1 year $25.40 3 years $80.07 5 years $140.35 10 years $319.48 Series L8 expenses payable over: 1 year $24.69 3 years $77.85 5 years $136.45 10 years $310.59 Series T6 expenses payable over: 1 year $24.45 3 years $77.09 5 years $135.12 10 years $307.58 Series T8 expenses payable over: 1 year $24.88 3 years $78.44 5 years $137.49 10 years $312.97 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 122 IA Clarington Tactical Income Fund Fund Details Type of Fund Diversified Income Securities Offered Series A, Series E, Series E6, Series EX, Series EX6, Series F, Series F6, Series F8, Series FE, Series FE6, Series FX, Series FX6, Series FX8, Series I, Series L, Series L6, Series L8, Series O, Series P, Series P6, Series T6, Series T8 and Series X units of a mutual fund trust Start Date Series A: July 13, 2009 Series E: November 3, 2014 Series E6: November 3, 2014 Series EX: July 18, 2011(1) Series EX6: July 18, 2011(1) Series F: November 3, 2014 Series F6: November 3, 2014 Series F8: November 3, 2014 Series FE: June 25, 2015 Series FE6: June 25, 2015 Series FX: July 19, 2010(1) Series FX6: July 5, 2004(1) Series FX8: June 1, 2009(1) Series I: July 6, 2005 Series L: February 28, 2011 Series L6: February 28, 2011 Series L8: February 28, 2011 Series O: July 19, 2010 Series P: November 3, 2014 Series P6: November 3, 2014 Series T6: May 15, 2003 Series T8: June 1, 2009 Series X: April 30, 2012 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.75% Series E6: 1.75% Series EX: 1.60% Series EX6: 1.60% Series F: 0.90% Series F6: 0.90% Series F8: 0.90% Series FE: 0.75% Series FE6: 0.75% Series FX: 0.80% Series FX6: 0.80% Series FX8: 0.80% 123 IA Clarington Tactical Income Fund (continued) Series I: negotiated and paid by each Series I investor Series L: 2.00% Series L6: 2.00% Series L8: 2.00% Series O: negotiated and paid by each Series O investor Series P : 0.75%(2) Series P6 : 0.75%(2) Series T6: 2.00% Series T8: 2.00% Series X: 1.65% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) Effective October 24, 2014, all of the issued and outstanding Series E, Series E6, Series F, Series F6, Series F8 Securities were re-designated as Series EX, Series EX6, Series FX, Series FX6 and Series FX8 Securities, respectively. Series EX, Series EX6, Series FX, Series FX6 and Series FX8 Securities are closed to new investors. Investors who currently hold these series may purchase additional Securities. IA Clarington may re-open these series to new investors in its discretion. (2) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to seek to achieve a steady flow of monthly income by investing primarily in trust units, equity securities and fixed income securities of Canadian issuers. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will invest primarily in Canadian equity and fixed income securities, may generally invest up to 49% of its assets in foreign securities, may generally invest up to 70% of its assets in either equity or fixed income securities; the allocation between equity and fixed income securities will be determined on the basis of general market or economic conditions, may invest the equity component of its portfolio in common shares, preferred shares, convertible preferred shares, income trust units, real estate investment trusts (REITs), and other equity securities deemed appropriate, may invest the fixed income component of its portfolio in bonds, debentures, notes and other obligations, whether secured or unsecured, convertible or not, issued or guaranteed by Canadian or foreign governments, international or supranational agencies or corporations, Generally, investments in corporate bonds are expected to have a weighted average credit rating in the range of “B-” to “BBB+”, may also hold senior loans, floating rate debt instruments, asset-backed or mortgage-backed securities, may invest in fixed income securities that trade in institutional markets in Canada and elsewhere, 124 IA Clarington Tactical Income Fund (continued) may invest in bonds that are not rated by any designated rating organization; if a credit rating is unavailable, the portfolio manager will evaluate the investment on its merits, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a portion of its assets in cash, government bonds or short-term debt securities to manage the liquidity of its portfolio or for defensive purposes to reflect general market or economic conditions, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may enter into securities lending, repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use other derivatives such as options, futures, forward contracts and swaps for hedging and nonhedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, may use credit derivatives products from time to time for purposes of gaining or hedging exposure to a particular company; credit ratings must comply with the general credit quality constraints of the Fund. Credit derivatives offer a flexible way to gain or hedge exposure to a particular corporate credit synthetically. This is generally achieved via the swap market, whereby over-the-counter contracts transfer the credit risk on a particular corporation from a seller to a buyer, and may engage in short selling. A “short-sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to 125 IA Clarington Tactical Income Fund (continued) the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in the Fund are: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk credit risk currency risk default risk derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short-selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, an IA Clarington Guaranteed investment fund held 16.32% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking a flow of income and the possibility for capital appreciation, with low to medium risk tolerance, and 126 IA Clarington Tactical Income Fund (continued) planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, E, EX, F, FE, FX, L and P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E6, Series EX6, Series F6, Series FE6, Series FX6, Series F8, Series FX8, Series L6, Series L8, Series P6, Series T6, Series T8 and Series X units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% (for Series E6, Series EX6, Series F6, Series FE6, Series FX6, Series L6, Series P6, Series T6 and Series X units), or between approximately 7% and 9% (for Series F8, Series FX8, Series L8 and Series T8 units), of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one twelfth of 6% (for Series E6, Series EX6, Series F6, Series FE6, Series FX6, Series L6, Series P6, Series T6 and Series X units), and one-twelfth of 8% (for Series F8, Series FX8, Series L8 and Series T8 units) of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.047 per Series E6 and Series EX6 units, $0.050 per Series F6, Series FE6, Series FX6 and Series P6 units, $0.056 per Series F8 unit, $0.061 per Series FX8 unit, $0.040 per Series L6, Series T6 and Series X units, $0.055 per Series L8 and Series T8 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series I and O units, the Fund will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $24.58 3 years $77.47 5 years $135.79 10 years $309.11 Series E expenses payable over: 1 year $22.03 3 years $69.46 5 years $121.76 10 years $277.15 Series E6 expenses payable over: 1 year $22.61 3 years $71.28 5 years $124.94 10 years $284.39 Series EX expenses payable over: 1 year $19.79 3 years $62.39 5 years $109.36 10 years $248.93 Series EX6 expenses payable over: 1 year $20.35 3 years $64.15 5 years $112.44 10 years $255.94 Series F expenses payable over: 1 year $10.63 3 years $33.51 5 years $58.73 10 years $133.69 127 IA Clarington Tactical Income Fund (continued) Series F6 expenses payable over: 1 year $10.99 3 years $34.64 5 years $60.72 10 years $138.20 Series F8 expenses payable over: 1 year $10.92 3 years $34.43 5 years $60.34 10 years $137.35 Series FE expenses payable over: 1 year $10.29 3 years $32.44 5 years $56.85 10 years $129.41 Series FE6 expenses payable over: 1 year $10.94 3 years $34.49 5 years $60.45 10 years $137.59 Series FX expenses payable over: 1 year $10.30 3 years $32.46 5 years $56.89 10 years $129.49 Series FX6 expenses payable over: 1 year $10.66 3 years $33.62 5 years $58.92 10 years $134.13 Series FX8 expenses payable over: 1 year $10.70 3 years $33.74 5 years $59.14 10 years $134.63 Series L expenses payable over: 1 year $24.97 3 years $78.72 5 years $137.98 10 years $314.09 Series L6 expenses payable over: 1 year $25.06 3 years $79.01 5 years $138.49 10 years $315.24 Series L8 expenses payable over: 1 year $25.02 3 years $78.86 5 years $138.22 10 years $314.64 Series O expenses payable over: 1 year $0.85 3 years $2.69 5 years $4.72 10 years $10.73 Series P expenses payable over: 1 year $3.17 3 years $10.00 5 years $17.52 10 years $39.89 Series P6 expenses payable over: 1 year $1.86 3 years $5.85 5 years $10.25 10 years $23.33 Series T6 expenses payable over: 1 year $24.43 3 years $77.03 5 years $135.02 10 years $307.33 Series T8 expenses payable over: 1 year $24.28 3 years $76.53 5 years $134.14 10 years $305.33 Series X expenses payable over: 1 year $20.14 3 years $63.49 5 years $111.28 10 years $253.31 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 128 IA Clarington Tactical Income Class Fund Details Type of Fund Diversified Income Securities Offered Series A, Series E, Series E6, Series F, Series F6, Series F8, Series L, Series L6, Series L8, Series T6 and Series T8 shares of a mutual fund corporation* Start Date Series A: July 19, 2010 Series E: July 18, 2011 Series E6: July 18, 2011 Series F: July 19, 2010 Series F6: March 2, 2009 Series F8: March 2, 2009 Series L: February 28, 2011 Series L6: February 28, 2011 Series L8: February 28, 2011 Series T6: March 2, 2009 Series T8: March 2, 2009 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.60% Series E6: 1.60% Series F: 0.80% Series F6: 0.80% Series F8: 0.80% Series L: 2.00% Series L6: 2.00% Series L8: 2.00% Series T6: 2.00% Series T8: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario *This Fund is closed to new investors and to purchases and switches under pre-existing PAC Plans or other systematic plans. IA Clarington may reopen the Fund in its discretion.. What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide a return that is similar to the return of a Canadian tactical balanced mutual fund. The Fund invests primarily, directly or indirectly, in securities held by a Canadian tactical balanced mutual fund managed by IA Clarington, or an affiliate or associate of IA Clarington, and may invest all or a portion of its portfolio in Securities of the Reference Fund. 129 IA Clarington Tactical Income Class (continued) The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Tactical Income Fund, which we refer to as the “Reference Fund”. The investment strategies of the Reference Fund are set out on page 124 of this document. The Fund will hold cash or cash equivalents while the investment in units of the Reference Fund is pending or in order to facilitate redemptions. The Fund may use derivatives such as options, futures, forward contracts and swaps for hedging and nonhedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk, fund of funds risk and tracking risk, as well as to risks relating to the Reference Fund. The risks of the Reference Fund are: asset-backed and mortgage-backed securities risk capital depletion risk credit risk currency risk default risk derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk 130 IA Clarington Tactical Income Class (continued) tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 99.48% of its net assets in units of IA Clarington Tactical Income Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking a flow of income and the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. IA Clarington Tactical Income Class may be less appropriate for investments made through a registered plan than IA Clarington Tactical Income Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. For Series A, Series E, Series F and Series L shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E6, Series F6, Series F8, Series L6, Series L8, Series T6 and Series T8 shares, CSFI will make a monthly dividend of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 5% and 7% (for Series E6, Series F6, Series L6 and Series T6 shares), or between approximately 7% and 9% (for Series F8, Series L8 and Series T8 shares), of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 6% (for Series E6, Series F6, Series L6 and Series T6 shares), and approximately one-twelfth of 8% (for Series F8, Series L8 and Series T8 shares) of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.050 per Series E6 share, $0.062 per Series F6 and Series F8 shares, $0.049 per Series L6 per Series T6 shares and $0.056 per Series L8 and per Series T8 shares, which rates will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $24.79 3 years $78.17 5 years $137.01 10 years $311.87 Series E expenses payable over: 1 year $20.90 3 years $65.88 5 years $115.46 10 years $262.83 131 IA Clarington Tactical Income Class (continued) Series E6 expenses payable over: 1 year $19.88 3 years $62.66 5 years $109.83 10 years $250.00 Series F expenses payable over: 1 year $10.55 3 years $33.24 5 years $58.27 10 years $132.63 Series F6 expenses payable over: 1 year $11.00 3 years $34.67 5 years $60.77 10 years $138.33 Series F8 expenses payable over: 1 year $10.87 3 years $34.26 5 years $60.04 10 years $136.67 Series L expenses payable over: 1 year $25.18 3 years $79.38 5 years $139.14 10 years $316.72 Series L6 expenses payable over: 1 year $25.20 3 years $79.43 5 years $139.23 10 years $316.93 Series L8 expenses payable over: 1 year $24.33 3 years $76.71 5 years $134.45 10 years $306.05 Series T6 expenses payable over: 1 year $24.94 3 years $78.63 5 years $137.82 10 years $313.72 Series T8 expenses payable over: 1 year $24.70 3 years $77.87 5 years $136.49 10 years $310.68 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 132 IA Clarington Yield Opportunities Fund Fund Details Type of Fund Diversified Income Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5, Series P, Series P5 and Series T5 units of a mutual fund trust Start Date December 29, 2015 Eligible for Registered Plans Yes Management Fees Series A: 1.60% Series E: 1.40% Series E5: 1.40% Series F: 0.80% Series F5: 0.80% Series FE: 0.65% Series FE5: 0.65% Series L: 1.60% Series L5: 1.60% Series P: 0.65%(1) Series P5: 0.65%(1) Series T5: 1.60% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details What Does the Fund Invest In? Investment Objectives The Fund’s objective is to provide a monthly income stream and a modest total investment return through investing in investment grade fixed income, higher-yielding lower quality fixed income, equity securities that pay dividends, and other securities that do distribute income. The Fund may invest in these securities directly or through investments in underlying funds. The fundamental investment objectives may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Portfolio Manager and Sub-Advisor will incorporate a top down analysis of economic and market conditions, as well as interest rate and credit cycle analysis, in determining the asset mix for the Fund. The equity allocation of the Fund’s portfolio will generally range from 0% to 25% and the fixed income allocation will generally range from 75% to 100%. The allocation between equity and fixed income investments will be determined on the basis of general market conditions. 133 IA Clarington Yield Opportunities Fund (continued) The Portfolio Manager and Sub-Advisor will rely on fundamental analysis involving industry analysis, as well as a review of business fundamentals, financial position, cash flow and liquidity, as well as analysis of terms, covenants and creditor protection. They will assess relative value, interest rate risk and prepayment risk within the portfolio when constructing and maintaining the Fund’s investments. The Fund: may invest in a mix of investment grade fixed income and higher-yielding, lower rated fixed income, which may also include senior loans, non-rated securities, floating rate debt instruments, asset-backed and mortgage-backed securities and private placements as permitted by securities legislation, equity securities that pay or are expected to pay dividends, and other securities, including ETFs, that do or are expected to distribute income, may allocate up to 100% of its assets among Reference Funds using strategic asset allocation. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class, There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest a significant portion of its assets in foreign securities (generally up to 49% of the Fund’s assets), may employ a covered call strategy on a portion of the Fund’s equity portfolio. A covered call strategy involves the Fund purchasing a stock and then selling a call option on that stock. The Fund earns a premium on the call option, but the call option limits the Fund’s ability to participate in any increase in the value of the stock above the strike price of the call option. Generally, the Portfolio Manager will write call options on stocks in situations where it believes that the premium that the Fund will earn on the option is attractive relative to the prospect of the stock increasing in value above the strike prices over the life of the option, may invest in Canadian and U.S. real estate investment trusts, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may hold investments which may be denominated in or have exposure to foreign currencies, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transaction, and the strategies used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10 and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. 134 IA Clarington Yield Opportunities Fund (continued) What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk capital depletion risk credit risk currency risk default risk derivatives risk ETF risk floating rate loan liquidity risk foreign investment risk fund of funds risk interest rate risk large transaction risk liquidity risk prepayment risk reinvestment risk repurchase and reverse repurchase transactions and securities lending risk series risk tax risk There may be additional risks associated with investing in this Fund as a result of the underlying funds in which it invests. Please see the most recently filed Fund Facts for a list of the underlying fund investments. The risks relating to each of the underlying funds can be found in each underlying fund’s prospectus. You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 37.80% of its net assets in units of IA Clarington Bond Fund, up to 28.86% of its net assets in units of IA Clarington Core Plus Bond Fund, up to 14.00% of its net assets in shares of IA Clarington Dividend Growth Class, up to 10.22% of its net assets in units of IA Clarington Floating Rate Income Fund and up to 11.22% of its net assets in units of IA Clarington U.S. Dividend Growth Fund during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking monthly income and preservation of capital, with low risk tolerance, and planning to invest over the medium to long term. 135 IA Clarington Yield Opportunities Fund (continued) The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 45 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series L and Series P units, the Fund intends to distribute net income allocated to each series monthly. For Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 units, which rates will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $21.94 3 years $69.18 5 years $121.26 10 years $276.01 Series E expenses payable over: 1 year $19.63 3 years $61.89 5 years $108.49 10 years $246.95 Series E5 expenses payable over: 1 year $19.60 3 years $61.80 5 years $108.33 10 years $246.58 Series F expenses payable over: 1 year $12.45 3 years $39.26 5 years $68.81 10 years $156.63 Series F5 expenses payable over: 1 year $12.24 3 years $38.59 5 years $67.64 10 years $153.96 Series FE expenses payable over: 1 year $10.84 3 years $34.18 5 years $59.92 10 years $136.39 Series FE5 expenses payable over: 1 year $10.78 3 years $33.99 5 years $59.57 10 years $135.60 Series L expenses payable over: 1 year $22.11 3 years $69.70 5 years $122.16 10 years $278.07 136 IA Clarington Yield Opportunities Fund (continued) Series L5 expenses payable over: 1 year $22.46 3 years $70.81 5 years $124.12 10 years $282.53 Series P expenses payable over: 1 year $2.99 3 years $9.41 5 years $16.50 10 years $37.56 Series P5 expenses payable over: 1 year $3.11 3 years $9.79 5 years $17.16 10 years $39.07 Series T5 expenses payable over: 1 year $22.02 3 years $69.43 5 years $121.70 10 years $277.02 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 137 IA Clarington Canadian Balanced Fund Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series FX, Series FX5, Series I, Series L, Series L5, Series O, Series P, Series P5 and Series T5 units of a mutual fund trust Start Date Series A: September 24, 1996 Series E: November 3, 2014 Series E5: November 3, 2014 Series F: November 3, 2014 Series F5: November 3, 2014 Series FE: June 25, 2015 Series FE5: June 25, 2015 Series FX: July 5, 2004(1) Series FX5: July 18, 2011(1) Series I: July 13, 2009 Series L: February 28, 2011 Series L5: February 28, 2011 Series O: July 19, 2010 Series P: November 3, 2014 Series P5: November 3, 2014 Series T5: November 15, 2010 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.75% Series E5: 1.75% Series F: 0.90% Series F5: 0.90% Series FE: 0.75% Series FE5: 0.75% Series FX: 0.85% Series FX5: 0.85% Series I: negotiated and paid by each Series I investor Series L: 2.00% Series L5: 2.00% Series O: negotiated and paid by each Series O investor Series P: 0.75%(2) Series P5: 0.75%(2) Series T5: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor QV Investors Inc. 138 IA Clarington Canadian Balanced Fund (continued) Calgary, Alberta (1) Effective October 24, 2014, all of the issued and outstanding Series F and Series F5 Securities were re-designated as Series FX and Series FX5 Securities, respectively. Series FX and Series FX5 Securities are closed to new investors. Investors who currently hold these series may purchase additional Securities. IA Clarington may re-open these series to new investors in its discretion. (2) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve capital appreciation and income with a focus on preserving the value of the original capital by investing primarily in a portfolio of Canadian equity and fixed income investments. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: generally invests approximately 30% to 70% of assets in equity securities and the balance in fixed income and money market securities, follows a fundamental, bottom-up and value-based process in equity selection to achieve growth, supports the bottom-up investment process with a top-down analysis of the global financial and economic trends influencing prices, invests in fixed income securities to counter the volatility of equities using a top-down portfolio approach and a blend of credit and duration styles, may invest in foreign securities; such investments will generally be less than 30% of the cost amount of the Fund, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10 and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: 139 IA Clarington Canadian Balanced Fund (continued) capital depletion risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk government securities risk income trust risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, an IA Clarington Guaranteed investment fund held 30.14% and Industrial Alliance held, on behalf of other investors, 18.82%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking capital appreciation and income, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, Series E, Series F, Series FE, Series FX, Series I, Series L, Series P and Series O units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E5, Series F5, Series FE5, Series FX5, Series L5, Series P5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for such series in January of each year. If the 140 IA Clarington Canadian Balanced Fund (continued) annualized monthly distribution per unit of the series at that time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series F5, Series FE5, Series FX5, Series L5, Series P5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.14 3 years $79.24 5 years $138.89 10 years $316.15 Series E expenses payable over: 1 year $22.81 3 years $71.90 5 years $126.02 10 years $286.87 Series E5 expenses payable over: 1 year $23.64 3 years $74.53 5 years $130.64 10 years $297.36 Series F expenses payable over: 1 year $12.65 3 years $39.87 5 years $69.89 10 years $159.08 Series F5 expenses payable over: 1 year $12.82 3 years $40.46 5 years $70.92 10 years $161.43 Series FE expenses payable over: 1 year $11.71 3 years $36.90 5 years $64.68 10 years $147.23 Series FE5 expenses payable over: 1 year $11.53 3 years $36.35 5 years $63.71 10 years $145.02 Series FX expenses payable over: 1 year $11.63 3 years $36.66 5 years $64.25 10 years $146.26 Series FX5 expenses payable over: 1 year $11.20 3 years $35.30 5 years $61.88 10 years $140.86 Series L expenses payable over: 1 year $25.84 3 years $81.45 5 years $142.76 10 years $324.97 Series L5 expenses payable over: 1 year $25.94 3 years $81.78 5 years $143.33 10 years $326.27 Series O expenses payable over: 1 year $0.84 3 years $2.66 5 years $4.66 10 years $10.60 Series P expenses payable over: 1 year $2.66 3 years $8.40 5 years $14.73 10 years $33.52 141 IA Clarington Canadian Balanced Fund (continued) Series P5 expenses payable over: 1 year $3.03 3 years $9.54 5 years $16.72 10 years $38.05 Series T5 expenses payable over: 1 year $25.17 3 years $79.36 5 years $139.11 10 years $316.64 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 142 IA Clarington Canadian Balanced Class Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series E, Series E5, Series EX, Series EX5, Series F, Series F5, Series FE, Series FE5, Series FX, Series FX5, Series L, Series L5, Series P, Series P5 and Series T5 shares of a mutual fund corporation Start Date Series A: July 18, 2011 Series E: November 3, 2014 Series E5: November 3, 2014 Series EX: July 18, 2011(1) Series EX5: July 18, 2011(1) Series F: November 3, 2014 Series F5: November 3, 2014 Series FE: June 25, 2015 Series FE5: June 25, 2015 Series FX: July 18, 2011(1) Series FX5: July 18, 2011(1) Series L: July 18, 2011 Series L5: July 18, 2011 Series P: November 3, 2014 Series P5: November 3, 2014 Series T5: July 18, 2011 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.75% Series E5: 1.75% Series EX: 1.75% Series EX5: 1.75% Series F: 0.90% Series F5: 0.90% Series FE: 0.75% Series FE5: 0.75% Series FX: 0.85% Series FX5: 0.85% Series L: 2.00% Series L5: 2.00% Series P: 0.75%(2) Series P5: 0.75%(2) Series T5: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor QV Investors Inc. Calgary, Alberta 143 IA Clarington Canadian Balanced Class (continued) (1) Effective October 24, 2014, all of the issued and outstanding Series E, Series E5, Series F and Series F5 Securities were re-designated as Series EX, Series EX5, Series FX and Series FX5 Securities, respectively. Series EX, Series EX5, Series FX and Series FX5 Securities are closed to new investors. Investors who currently hold these series may purchase additional Securities. IA Clarington may re-open these series to new investors in its discretion. (2) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve capital appreciation and income with a focus on preserving the value of the original capital by investing primarily in a portfolio of Canadian equity and fixed income investments suitable for a Canadian balanced mutual fund, and it may invest all or a portion of its portfolio in Securities of a Reference Fund managed by IA Clarington, or an affiliate or associate of IA Clarington. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Canadian Balanced Fund, which we refer to as the “Reference Fund”. The investment strategies of the Reference Fund are set out on page 138 of this document. The Fund will hold cash or cash equivalents while the investment in units of the Reference Fund is pending or in order to facilitate redemptions. The Fund may use derivatives such as options, futures, forward contracts and swaps for hedging and nonhedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page ● for more details. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk, fund of funds risk and tracking risk, as well as to risks relating to the Reference Fund. The risks of the Reference Fund are: capital depletion risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk government securities risk income trust risk 144 IA Clarington Canadian Balanced Class (continued) interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 99.47% of its net assets in units of IA Clarington Canadian Balanced Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking capital appreciation and income, with low to medium risk tolerance, and planning to invest over the medium to long term. IA Clarington Canadian Balanced Class may be less appropriate for investments made through a registered plan than IA Clarington Canadian Balanced Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. For Series A, Series E, Series EX, Series F, Series FE, Series FX, Series L and Series P shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E5, Series EX5, Series F5, Series FE5, Series FX5, Series L5, Series P5 and Series T5 shares, CSFI will make a monthly dividend of a fixed dollar amount per share determined for such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 4% and 6% of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 5% of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.042 per Series E5, Series EX5, Series F5, Series FE5, Series FX5, Series L5, Series P5 and Series T5 share, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. 145 IA Clarington Canadian Balanced Class (continued) Series A expenses payable over: 1 year $25.59 3 years $80.66 5 years $141.39 10 years $321.84 Series E expenses payable over: 1 year $23.21 3 years $73.17 5 years $128.25 10 years $291.92 Series E5 expenses payable over: 1 year $23.11 3 years $72.86 5 years $127.70 10 years $290.68 Series EX expenses payable over: 1 year $21.66 3 years $68.30 5 years $119.71 10 years $272.49 Series EX5 expenses payable over: 1 year $21.70 3 years $68.42 5 years $119.93 10 years $272.98 Series F expenses payable over: 1 year $12.75 3 years $40.18 5 years $70.43 10 years $160.32 Series F5 expenses payable over: 1 year $12.82 3 years $40.43 5 years $70.87 10 years $161.31 Series FE expenses payable over: 1 year $11.69 3 years $36.84 5 years $64.57 10 years $146.98 Series FE5 expenses payable over: 1 year $11.53 3 years $36.33 5 years $63.69 10 years $144.97 Series FX expenses payable over: 1 year $12.13 3 years $38.25 5 years $67.05 10 years $152.62 Series FX5 expenses payable over: 1 year $12.08 3 years $38.07 5 years $66.73 10 years $151.90 Series L expenses payable over: 1 year $25.83 3 years $81.43 5 years $142.72 10 years $324.88 Series L5 expenses payable over: 1 year $25.47 3 years $80.31 5 years $140.76 10 years $320.42 Series P expenses payable over: 1 year $2.82 3 years $8.90 5 years $15.60 10 years $35.52 Series P5 expenses payable over: 1 year $2.91 3 years $9.19 5 years $16.10 10 years $36.66 Series T5 expenses payable over: 1 year $25.13 3 years $79.24 5 years $138.88 10 years $316.14 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 146 IA Clarington Focused Balanced Fund Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series E, Series E5, Series EX, Series EX5, Series F, Series F5, Series FE, Series FE5, Series I, Series L, Series L5, Series O, Series P, Series P5 and Series T5 units of a mutual fund trust Start Date Series A: June 4, 2012 Series E: November 3, 2014 Series E5: November 3, 2014 Series EX: June 4, 2012(1) Series EX5: June 4, 2012(1) Series F: June 4, 2012 Series F5: June 4, 2012 Series FE: June 25, 2015 Series FE5: June 25, 2015 Series I: June 4, 2012 Series L: June 4, 2012 Series L5: June 4, 2012 Series O: June 4, 2012 Series P: November 3, 2014 Series P5: November 3, 2014 Series T5: June 4, 2012 Eligible for Registered Plans Yes Management Fees Series A: 1.90% Series E: 1.75% Series E5: 1.75% Series EX: 1.65% Series EX5: 1.65% Series F: 0.90% Series F5: 0.90% Series FE: 0.75% Series FE5: 0.75% Series I: negotiated and paid by each Series I investor Series L: 1.90% Series L5: 1.90% Series O: negotiated and paid by each Series O investor Series P: 0.75%(2) Series P5: 0.75%(2) Series T5: 1.90% This fund also pays us a performance fee, capped at 1.85% per annum. This fee is charged in respect of, and allocated to, each series of Securities other than Series I and Series O. See “Fees and expenses payable by the Funds – Performance Fees” on page ● for 147 IA Clarington Focused Balanced Fund (continued) details. Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisors Taylor Asset Management Inc. Toronto, Ontario IA Clarington Investments Inc. Toronto, Ontario (1) Effective October 24, 2014, all of the issued and outstanding Series E and Series E5 Securities were re-designated as Series EX and Series EX5 Securities, respectively. Series EX and Series EX5 Securities are closed to new investors. Investors who currently hold these series may purchase additional Securities. IA Clarington may re-open these series to new investors in its discretion. (2) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve capital appreciation and moderate income by investing primarily in a portfolio of Canadian equity and fixed income investments. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies Taylor Asset Management Inc. follows a fundamental bottom-up approach to security selection. It manages the equity portion of the Fund’s portfolio and determines the allocation between equity and fixed income investments. IA Clarington Investments Inc. manages the fixed income portion of the Fund’s portfolio. The Fund: generally invests in Canadian equity and fixed income securities, invests the equity component of its portfolio primarily in dividend paying common shares, may generally invest up to 49% of its assets in foreign securities, invests the fixed income component of its portfolio by investing in fixed income mutual funds managed by IA Clarington or an affiliate and may also invest in other debt obligations of Canadian and foreign issuers, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 60%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are the same as the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by 148 IA Clarington Focused Balanced Fund (continued) the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk credit risk currency risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk interest rate risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk tax risk tracking risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 37.85% of its net assets in units of IA Clarington Strategic Corporate Bond Fund during the past year. This investment did not result in any additional risk to the Fund. 149 IA Clarington Focused Balanced Fund (continued) Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation and income, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series E, Series EX, Series F, Series FE, Series I, Series L, Series O and Series P units, the Fund intends to distribute net income allocated to each series monthly. For Series E5, Series EX5, Series F5, Series FE5, Series L5, Series P5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series EX5, Series F5, Series FE5, Series L5, Series P5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $24.92 3 years $78.57 5 years $137.72 10 years $313.49 Series E expenses payable over: 1 year $22.72 3 years $71.62 5 years $125.53 10 years $285.73 Series E5 expenses payable over: 1 year $22.20 3 years $69.99 5 years $122.68 10 years $279.25 Series EX expenses payable over: 1 year $21.70 3 years $68.40 5 years $119.90 10 years $272.92 Series EX5 expenses payable over: 1 year $21.40 3 years $67.47 5 years $118.27 10 years $269.21 Series F expenses payable over: 1 year $13.07 3 years $4117 5 years $72.20 10 years $164.34 Series F5 expenses payable over: 1 year $12.84 3 years $40.47 5 years $70.94 10 years $161.47 150 IA Clarington Focused Balanced Fund (continued) Series FE expenses payable over: 1 year $11.78 3 years $37.14 5 years $65.10 10 years $148.18 Series FE5 expenses payable over: 1 year $10.92 3 years $34.42 5 years $60.33 10 years $137.34 Series L expenses payable over: 1 year $25.66 3 years $80.88 5 years $141.77 10 years $322.70 Series L5 expenses payable over: 1 year $25.20 3 years $79.45 5 years $139.26 10 years $317.00 Series O expenses payable over: 1 year $0.91 3 years $2.88 5 years $5.05 10 years $11.50 Series P expenses payable over: 1 year $2.67 3 years $8.43 5 years $14.78 10 years $33.64 Series P5 expenses payable over: 1 year $3.01 3 years $9.50 5 years $16.65 10 years $37.91 Series T5 expenses payable over: 1 year $24.41 3 years $76.97 5 years $134.91. 10 years $307.09 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 151 IA Clarington Focused Balanced Class Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series L, Series L5 and Series T5 shares of a mutual fund corporation* Start Date Series A: June 4, 2012 Series E: June 4, 2012 Series E5: June 4, 2012 Series F: June 4, 2012 Series F5: June 4, 2012 Series L: June 4, 2012 Series L5: June 4, 2012 Series T5: June 4, 2012 Eligible for Registered Plans Yes Management Fees Series A: 1.90% Series E: 1.75% Series E5: 1.75% Series F: 0.90% Series F5: 0.90% Series L: 1.90% Series L5: 1.90% Series T5: 1.90% This fund also pays us a performance fee, capped at 1.85% per annum. This fee is charged in respect of, and allocated to each series of Securities. See “Fees and expenses payable by the Funds – Performance Fees” on page 29 for details. Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisors Taylor Asset Management Inc. Toronto, Ontario IA Clarington Investments Inc. Toronto, Ontario *This Fund is closed to new investors and to purchases and switches under pre-existing PAC Plans or other systematic plans. IA Clarington may reopen the Fund in its discretion. What Does the Fund Invest In? Investment Objectives The Fund achieves capital appreciation and moderate income by investing primarily, directly or indirectly, in a portfolio of Canadian equity and fixed income investments. With respect to the portion of the portfolio allocated to fixed income investments, the Fund may seek to obtain a return determined by reference to the performance of a Canadian bond fund that invests primarily in fixed income securities and is managed by IA Clarington or an 152 IA Clarington Focused Balanced Class (continued) affiliate or associate of IA Clarington. The Fund will seek to achieve its objective by (i) investing in Securities of the Reference Fund and/or (ii) investing in Canadian equity and fixed income securities similar to those held by the Reference Fund. The fundamental investment objectives may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies Taylor Asset Management Inc. follows a fundamental bottom-up approach to security selection. It manages the equity portion of the Fund’s portfolio and determines the allocation between equity and fixed income investments. IA Clarington Investments Inc. manages the fixed income portion of the Fund’s portfolio. The Fund: generally invests in Canadian equity and fixed income securities, invests the equity component of its portfolio primarily in dividend paying common shares, may generally invest up to 49% of its assets in foreign securities, invests the fixed income component of its portfolio in one or more fixed income mutual funds managed by IA Clarington or an affiliate, and may also invest in other debt obligations of Canadian and foreign issuers, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may from time to time invest a portion of its net assets in units or shares of other mutual funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are the same as the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10 and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. 153 IA Clarington Focused Balanced Class (continued) What are the Risks of Investing in this Fund? The risks of investing in the Fund are: capital depletion risk concentration risk corporate class risk credit risk currency risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk interest rate risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk tax risk tracking risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, an investor held 11.46% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. As permitted by its investment objectives, the Fund held up to 30.66% of its net assets in units of IA Clarington Strategic Corporate Bond Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking income and the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. 154 IA Clarington Focused Balanced Class (continued) For Series A, Series E, Series F and Series L shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E5, Series F5, Series L5 and Series T5 shares, CSFI will make a monthly dividend of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 4% and 6% (for Series E5, Series F5, Series L5 and Series T5 shares) of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 5% (for Series E5, Series F5, Series L5 and Series T5 shares) of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.042 per Series E5, Series F5, Series L5 and Series T5 shares which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $24.87 3 years $78.40 5 years $137.42 10 years $312.81 Series E expenses payable over: 1 year $20.87 3 years $65.78 5 years $115.30 10 years $262.45 Series E5 expenses payable over: 1 year $22.45 3 years $70.78 5 years $124.07 10 years $282.41 Series F expenses payable over: 1 year $12.73 3 years $40.14 5 years $70.35 10 years $160.13 Series F5 expenses payable over: 1 year $12.60 3 years $39.71 5 years $69.60 10 years $158.42 Series L expenses payable over: 1 year $25.90 3 years $81.66 5 years $143.14 10 years $325.83 Series L5 expenses payable over: 1 year $25.38 3 years $80.02 5 years $140.26 10 years $319.26 Series T5 expenses payable over: 1 year $24.58 3 years $77.48 5 years $135.80 10 years $309.13 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 155 IA Clarington Growth & Income Fund Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5, Series P, Series P5 and Series T5 units of a mutual fund trust Start Date Series A: December 22, 2014 Series E: December 22, 2014 Series E5: December 22, 2014 Series F: December 22, 2014 Series F5: December 22, 2014 Series FE: June 25, 2015 Series FE5: June 25, 2015 Series L: December 22, 2014 Series L5: December 22, 2014 Series P: December 22, 2014 (1) Series P5: December 22, 2014 (1) Series T5: December 22, 2014 Eligible for Registered Plans Yes, units of the Fund are expected to be qualified investments Management Fees Series A: 1.90% Series E: 1.75% Series E5: 1.75% Series F: 0.90% Series F5: 0.90% Series FE: 0.75% Series FE5: 0.75% Series L: 1.90% Series L5: 1.90% Series P: 0.75%(1) Series P5: 0.75%(1) Series T5: 1.90% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide income and long term capital appreciation by investing primarily in equity securities of companies in Canada as well as the U.S., and higher yielding income-oriented securities. 156 IA Clarington Growth & Income Fund (continued) The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor uses fundamental and macro analysis to select investments and reviews the values of the investments on an ongoing basis, paying particular attention to quality and diversification by geographic region, industry sector, size of issuer and credit rating. The sub-advisor uses a value-oriented approach to equity investments as a primary method for equity securities selection, searching for companies that are able to maintain and grow cash flows and their distributions. In addition, the sub-advisor will look for businesses offering superior long-term earnings growth and having a competitive advantage in the market in which it operates and quality management. The Fund: invests the equity component of its portfolio primarily in Canadian securities, as well as U.S. securities including, but not limited to, dividend-paying common and preferred shares, convertible securities and income trust units, may invest a portion of the fund’s assets in non-Canadian securities; such investments will generally be less than 49% of the net assets of the Fund, may hold investments which may be denominated in or have exposure to foreign currencies, invests the equity component of its portfolio in companies of all market capitalizations, invests the fixed income component of its portfolio by investing primarily, directly or indirectly, in fixed and/or floating rate debt securities of primarily North American issuers, including high yield bonds, assetbacked securities (such as collateralized loan obligations) and senior loans. With respect to senior loans, the sub-advisor will invest in primary offerings of senior loans typically managed by one or more of the largest U.S and global commercial banks; and the sub-advisor may buy and sell senior loan participations and/or assignments in transactions with fixed income trading departments of the largest U.S. and global commercial banks, for which the settlement process may be facilitated by an established third party electronic system. Other floating rate debt instruments in which the Fund may invest include floating rate notes. Floating rate notes may be secured or unsecured and therefore may rank equally with or may be subordinated to, the senior loans. Interest on the notes is paid and reset periodically, typically quarterly, on the basis of the base rate, such as the London Interbank Offered Rate, plus a margin or premium. The margin is determined by the credit quality of the issuer, the term to maturity of the floating rate note, and the prevailing market conditions. may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest a portion of its net assets (generally no more than 60%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual funds securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between mutual funds, 157 IA Clarington Growth & Income Fund (continued) may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor will engage in short selling as a complement to the Fund’s current primary discipline of buying securities with the expectation that they will appreciate in market value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. Under normal market conditions, the sub-advisor expects to generally invest 60 – 85% of the assets in equities and 15 – 40% in fixed income securities, but that mix may change with market conditions. What are the Risks of Investing in this Fund? The risks of investing in the Fund are: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk credit risk currency risk default risk 158 IA Clarington Growth & Income Fund (continued) derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk fund of funds risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk prepayment risk reinvestment risk repurchase and reverse repurchase transactions and securities lending risk series risk short selling risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with this Mutual Fund?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 29.51% of its net assets in units of IA Clarington Floating Rate Income Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking monthly income with the possibility for long-term capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. This Fund may not be appropriate for investors with a short-term investment horizon. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 45 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series L and Series P units, the Fund intends to distribute net income allocated to each series monthly. 159 IA Clarington Growth & Income Fund (continued) For Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.05 3 years $78.96 5 years $138.39 10 years $315.02 Series E expenses payable over: 1 year $22.00 3 years $69.36 5 years $121.57 10 years $276.72 Series E5 expenses payable over: 1 year $22.74 3 years $71.67 5 years $125.63 10 years $285.96 Series F expenses payable over: 1 year $11.40 3 years $35.92 5 years $32.97 10 years $143.33 Series F5 expenses payable over: 1 year $11.19 3 years $35.26 5 years $61.81 10 years $140.69 Series FE expenses payable over: 1 year $10.77 3 years $33.94 5 years $59.48 10 years $135.40 Series FE5 expenses payable over: 1 year $10.98 3 years $34.60 5 years $60.65 10 years $138.05 Series L expenses payable over: 1 year $24.84 3 years $78.29 5 years $137.23 10 years $312.38 Series L5 expenses payable over: 1 year $25.78 3 years $81.27 5 years $142.45 10 years $324.26 Series P expenses payable over: 1 year $2.05 3 years $6.46 5 years $11.33 10 years $25.79 Series P5 expenses payable over: 1 year $1.95 3 years $6.13 5 years $10.75 10 years $24.47 Series T5 expenses payable over: 1 year $25.05 3 years $78.96 5 years $138.39 10 years $315.02 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 160 IA Clarington Inhance Balanced SRI Portfolio Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series E, Series E6, Series F, Series F6, Series FE, Series FE6, Series I, Series L, Series L6, Series O and T6 units of a mutual fund trust Start Date Series A: November 30, 2009 Series E: June 20, 2016 Series E6: June 20, 2016 Series F: June 25, 2015 Series F6: June 25, 2015 Series FE: June 20, 2016 Series FE6: June 20, 2016 Series I: November 30, 2009 Series L: June 20, 2016 Series L6: June 20, 2016 Series O: July 19, 2010 Series T6: November 30, 2009 Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E: 1.90% Series E6: 1.90% Series F: 1.00% Series F6: 1.00% Series FE: 0.90% Series FE6: 0.90% Series I: negotiated and paid by each Series I investor Series L: 2.00% Series L6: 2.00% Series O: negotiated and paid by each Series O investor Series T6: 1.95% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Vancity Investment Management Limited Vancouver, British Columbia What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate interest and dividend income as well as capital appreciation by investing primarily in a diversified portfolio of other mutual funds that meet the sub-advisor’s socially responsible investment principles with a balanced holding of income, bond and equity mutual funds. 161 IA Clarington Inhance Balanced SRI Portfolio (continued) The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategy The Fund: may allocate up to 100% of its assets among Reference Funds. Please refer to the Fund’s Fund Fact documents on our website for the list of Reference Funds in which the Fund invests. When selecting a mutual fund to invest in, the sub-advisor will consider the investment style employed by the Reference Fund and the types of securities held within the Reference Fund to determine whether the Reference Fund is compatible with the sub-advisor’s SRI principles, the performance of the Reference Fund, whether IA Clarington or an affiliate offers an appropriate Reference Fund and the expense, if any, to the Fund that may be associated with the investment. continuously monitors its holdings and asset mix, re-balances its underlying assets, and may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to capital depletion risk, large transaction risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk corporate class risk credit risk currency risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk government securities risk income trust risk interest rate risk large transaction risk 162 IA Clarington Inhance Balanced SRI Portfolio (continued) liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. In addition, please refer to each Reference Fund’s prospectus for a detailed description of these risks. As at May 23, 2017, Industrial Alliance held, on behalf of other investors, 10.54% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. As permitted by its investment objectives, the Fund held up to 40.34% of its net assets in units of IA Clarington Bond Fund, up to 40.03% of its net assets in units of IA Clarington Inhance Bond SRI Fund, up to 18.61% of its net assets in shares of IA Clarington Inhance Canadian Equity SRI Class, up to 24.89% of its net assets in shares of IA Clarington Inhance Global Equity SRI Class and up to 18.07% of its net assets in units of IA Clarington Inhance Monthly Income SRI Fund during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the stability and income of Canadian fixed-income investments combined with similar exposure to the growth possibility of equity securities, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, Series E, Series F, Series FE, Series I, Series L and Series O units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E6, F6, FE6, L6 and T6 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.050 per Series E6, F6, FE6, L6 and T6 unit, which rates will remain in effect until further adjusted in accordance with this distribution policy. 163 IA Clarington Inhance Balanced SRI Portfolio (continued) Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.44 3 years $80.18 5 years $140.54 10 years $319.92 Series E expenses payable over: 1 year $23.24 3 years $73.25 5 years $128.40 10 years $292.27 Series E6 expenses payable over: 1 year $23.78 3 years $74.97 5 years $131.41 10 years $299.13 Series F expenses payable over: 1 year $13.18 3 years $41.54 5 years $72.81 10 years $165.74 Series F6 expenses payable over: 1 year $13.15 3 years $41.44 5 years $72.64 10 years $165.36 Series FE expenses payable over: 1 year $12.70 3 years $40.03 5 years $70.17 10 years $159.72 Series FE6 expenses payable over: 1 year $12.38 3 years $39.02 5 years $68.40 10 years $155.70 Series L expenses payable over: 1 year $26.75 3 years $84.32 5 years $147.80 10 years $336.43 Series L6 expenses payable over: 1 year $26.92 3 years $84.87 5 years $148.76 10 years $338.63 Series O expenses payable over: 1 year $0.85 3 years $2.68 5 years $4.69 10 years $10.68 Series T6 expenses payable over: 1 year $25.41 3 years $80.10 5 years $140.39 10 years $319.58 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 164 IA Clarington Inhance Conservative SRI Portfolio Fund Details Type of Fund Canadian Balanced Securities Offered Series E6, Series F6, Series FE6, Series L6 and Series T6 units of a mutual fund trust Start Date Series E6: June 20, 2016 Series F6: June 25, 2015 Series FE6: June 20, 2016 Series L6: June 20, 2016 Series T6: November 30, 2009 Eligible for Registered Plans Yes Management Fee Series E6: 1.90% Series F6: 1.00% Series FE6: 0.90% Series L6: 2.00% Series T6: 1.90% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Vancity Investment Management Limited Vancouver, British Columbia What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate interest and dividend income with the potential for capital appreciation by investing primarily in a diversified portfolio of other mutual funds that meet the sub-advisor’s socially responsible investment principles with a bias towards Canadian income and bond mutual funds and the remainder in equity mutual funds. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: may allocate up to 100% of its assets among Reference Funds. Please refer to the Fund’s Fund Facts documents on our website for the list of Reference Funds in which the Fund invests. When selecting a mutual fund to invest in, the sub-advisor will consider the investment style employed by the Reference Fund and the types of securities held within the Reference Fund to determine whether the Reference Fund is compatible with the sub-advisor’s SRI principles, the performance of the Reference Fund, whether IA Clarington or an affiliate offers an appropriate Reference Fund and the expense, if any, to the Fund that may be associated with the investment. continuously monitors its holdings and asset mix, re-balances its underlying assets, and 165 IA Clarington Inhance Conservative SRI Portfolio (continued) may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to capital depletion risk and large transaction risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk corporate class risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk government securities risk income trust risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. In addition, please refer to each Reference Fund’s prospectus for a detailed description of these risks. As permitted by its investment objectives, the Fund held up to 56.49% of its net assets in units of IA Clarington Bond Fund, up to 56.20% of its net assets in units of IA Clarington Inhance Bond SRI Fund, up to 10.21% of its 166 IA Clarington Inhance Conservative SRI Portfolio (continued) net assets in shares of IA Clarington Canadian Equity SRI Class, up to 14.59% of its net assets in shares of IA Clarington Inhance Global Equity SRI Class and up to 20.09% of its net assets in units of IA Clarington Inhance Monthly Income SRI Fund during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for income and capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series E6, Series F6, Series FE6, Series L6 and Series T6 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.050 per Series E6, Series F6, Series FE6, Series L6 and Series T6 units, which rates will remain in effect until further adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series E6 expenses payable over: 1 year $23.75 3 years $74.88 5 years $131.24 10 years $298.74 Series F6 expenses payable over: 1 year $13.13 3 years $41.39 5 years $72.55 10 years $165.15 Series FE6 expenses payable over: 1 year $12.43 3 years $39.19 5 years $68.69 10 years $156.36 Series L6 expenses payable over: 1 year $27.02 3 years $85.18 5 years $149.31 10 years $339.86 Series T6 expenses payable over: 1 year $24.96 3 years $78.70 5 years $137.94 10 years $313.99 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 167 IA Clarington Inhance Growth SRI Portfolio Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series E, Series F, Series FE, Series L and Series V units of a mutual fund trust Start Date Series A: November 30, 2009 Series E: June 20, 2016 Series F: November 30, 2009 Series FE: June 20, 2016 Series L: June 20, 2016 Series V: November 30, 2009 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.90% Series F: 1.00% Series FE: 0.90% Series L: 2.00% Series V: negotiated and paid by the portfolio manager or each Series V investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Vancity Investment Management Limited Vancouver, British Columbia What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate capital appreciation as well as some interest and dividend income by investing primarily in a diversified portfolio of other mutual funds that meet the sub-advisor’s socially responsible investment principles with a bias towards Canadian equity mutual funds diversified with Canadian income and bond mutual fund holdings. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: may allocate up to 100% of its assets among Reference Funds. Please refer to the Fund’s Fund Facts document on our website for the list of Reference Funds in which the Fund invests. When selecting a mutual fund to invest in, the sub-advisor will consider the investment style employed by the Reference Fund and the types of securities held within the Reference Fund to determine whether the Reference Fund is compatible with the sub-advisor’s SRI principles, the performance of the Reference Fund, whether IA Clarington or an affiliate offers an appropriate Reference Fund and the expense, if any, to the Fund that may be associated with the investment, 168 IA Clarington Inhance Growth SRI Portfolio (continued) continuously monitors its holdings and asset mix, re-balances its underlying assets, may invest directly in global securities, and may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to large transaction risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: asset-backed and mortgage-backed securities risk concentration risk corporate class risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk government securities risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. In addition, please refer to each Reference Fund’s prospectus for a detailed description of these risks. As permitted by its investment objectives, the Fund held up to 28.99% of its net assets in units of IA Clarington Bond Fund, up to 28.16% of its net assets in units of IA Clarington Inhance Bond SRI Fund, up to 25.42% of its 169 IA Clarington Inhance Growth SRI Portfolio (continued) net assets in units of IA Clarington Inhance Canadian Equity SRI Class, up to 33.35% of its net assets in units of IA Clarington Inhance Global Equity SRI Class and up to 15.17% of its net assets in units of IA Clarington Inhance Monthly Income SRI Fund during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. The Fund will not pay a monthly distribution to any of its series. These series may pay an annual income or capital gain distribution in December of each year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.98 3 years $81.89 5 years $143.54 10 years $326.73 Series E expenses payable over: 1 year $23.36 3 years $73.64 5 years $129.07 10 years $293.81 Series F expenses payable over: 1 year $13.21 3 years $41.64 5 years $72.99 10 years $166.14 Series FE expenses payable over: 1 year $12.42 3 years $39.17 5 years $68.65 10 years $156.28 Series L expenses payable over: 1 year $27.30 3 years $86.06 5 years $150.84 10 years $343.35 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 170 IA Clarington Canadian Conservative Equity Fund Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series F, Series F5, Series I, Series L, Series L5, Series O and Series T5 units of a mutual fund trust Start Date Series A: October 2, 2000 Series F: October 7, 2005 Series F5: July 18, 2011(1) Series I: December 1, 2004 Series L: February 28, 2011 Series L5: February 28, 2011 Series O: July 19, 2010 Series T5: November 15, 2010 Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series F: 0.80% Series F5: 0.80% Series I: negotiated and paid by each Series I investor Series L: 1.95% Series L5: 1.95% Series O: negotiated and paid by each Series O investor Series T5: 1.95% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisors IA Clarington Investments Inc. Toronto, Ontario (1) Series F5 Securities are closed to new investors. Investors who currently hold this series may purchase additional Securities. IA Clarington may reopen the series to new investors in its discretion. What Does the Fund Invest In? Investment Objective The Fund’s objective is to seek to achieve long-term capital growth and maintain value by investing primarily in equity securities of Canadian companies. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: primarily invests in Canadian equity securities, including common shares and preferred shares, diversifies through investment in securities of companies of many industries, 171 IA Clarington Canadian Conservative Equity Fund (continued) invests primarily in securities that derive income and provide the Fund with the ability to pay quarterly distributions, protect value of investment and achieve long term capital appreciation, may invest in foreign securities; such investments will generally be less than 30% of the net assets of the Fund, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may from time to time invest a portion of its net assets (generally no more than 25%) in units or shares of other mutual funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are the same as the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, may, enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may hold a significant portion of its assets in cash, corporate or government debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, and may hold senior loans, asset-backed and/or mortgage-backed securities for defensive purposes. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk 172 IA Clarington Canadian Conservative Equity Fund (continued) capital depletion risk credit risk currency risk default risk derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk fund of funds risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, Industrial Alliance held, on behalf of other investors, 36.95% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking income with the possibility for long-term capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series F, Series I, Series L and Series O units, the Fund will undertake to pay a quarterly distribution. This distribution is reviewed periodically. 173 IA Clarington Canadian Conservative Equity Fund (continued) For Series F5, Series L5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series F5 unit and $0.035 per Series L5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.37 3 years $79.97 5 years $140.17 10 years $319.06 Series F expenses payable over: 1 year $11.06 3 years $34.88 5 years $61.13 10 years $139.15 Series F5 expenses payable over: 1 year $9.81 3 years $30.93 5 years $54.21 10 years $123.39 Series L expenses payable over: 1 year $25.36 3 years $79.95 5 years $140.13 10 years $318.97 Series L5 expenses payable over: 1 year $25.78 3 years $81.26 5 years $142.44 10 years $324.22 Series O expenses payable over: 1 year $0.89 3 years $2.79 5 years $4.90 10 years $11.14 Series T5 expenses payable over: 1 year $25.21 3 years $79.48 5 years $139.31 10 years $317.11 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 174 IA Clarington Canadian Conservative Equity Class Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5, Series P, Series P5 and Series T5 shares of a mutual fund corporation Start Date Series A: July 18, 2011 Series E: July 18, 2011 Series E5: July 18, 2011 Series F: July 18, 2011 Series F5: July 18, 2011(1) Series FE: June 25, 2015 Series FE5: June 25, 2015 Series L: July 18, 2011 Series L5: July 18, 2011 Series P: November 3, 2014 Series P5: November 3, 2014 Series T5: July 18, 2011 Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E: 1.75% Series E5: 1.75% Series F: 0.80% Series F5: 0.70% Series FE: 0.75% Series FE5: 0.75% Series L: 1.95% Series L5: 1.90% Series P: 0.75%(2) Series P5: 0.75%(2) Series T5: 1.95% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) Series F5 Securities are closed to new investors. Investors who currently hold this series may purchase additional Securities. IA Clarington may reopen the series to new investors in its discretion. (2) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. 175 IA Clarington Canadian Conservative Equity Class (continued) What Does the Fund Invest In? Investment Objective The Fund’s objective is to seek to achieve long-term capital growth and maintain value by investing primarily in equity securities of Canadian companies. It may invest in those securities either directly or by investing in securities of another mutual fund that invests in those securities. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Canadian Conservative Equity Fund, which we refer to as the “ Reference Fund”. The Fund will hold cash or cash equivalents only while the investment in units of the Reference Fund is pending or in order to facilitate redemptions. The investment strategies of the Reference Fund are set out on page 171 of this document. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk, fund of funds risk, and tracking risk, as well as to risks relating to the Reference Fund. The risks of the Reference Fund are: asset-backed or mortgage-backed securities risk capital depletion risk credit risk currency risk default risk derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. 176 IA Clarington Canadian Conservative Equity Class (continued) As permitted by its investment objectives, the Fund held up to 99.37% of its net assets in units of IA Clarington Canadian Conservative Equity Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking income with the possibility for long-term capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. IA Clarington Canadian Conservative Equity Class may be less appropriate for investments made through a registered plan than IA Clarington Canadian Conservative Equity Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series L and Series P shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 shares, CSFI will make a monthly dividend payment of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 4% and 6% of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 5% of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.034 per Series E5, Series L5 and Series T5 shares, $0.042 per Series F5 and Series FE5 shares and $0.033 per Series P5 share, which rates will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.88 3 years $81.58 5 years $143.00 10 years $325.51 Series E expenses payable over: 1 year $21.82 3 years $68.79 5 years $120.57 10 years $274.45 Series E5 expenses payable over: 1 year $21.49 3 years $67.76 5 years $118.77 10 years $270.35 Series F expenses payable over: 1 year $10.98 3 years $34.60 5 years $60.65 10 years $138.06 177 IA Clarington Canadian Conservative Equity Class (continued) Series F5 expenses payable over: 1 year $8.33 3 years $26.27 5 years $46.05 10 years $104.81 Series FE expenses payable over: 1 year $9.73 3 years $30.66 5 years $53.74 10 years $122.33 Series FE5 expenses payable over: 1 year $10.09 3 years $31.80 5 years $55.73 10 years $126.87 Series L expenses payable over: 1 year $26.51 3 years $83.58 5 years $146.50 10 years $333.48 Series L5 expenses payable over: 1 year $23.91 3 years $75.37 5 years $132.11 10 years $300.72 Series P expenses payable over: 1 year $1.40 3 years $4.43 5 years $7.76 10 years $17.66 Series P5 expenses payable over: 1 year $1.02 3 years $3.21 5 years $5.63 10 years $12.82 Series T5 expenses payable over: 1 year $26.39 3 years $83.19 5 years $145.82 10 years $331.93 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 178 IA Clarington Canadian Dividend Fund Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series F, Series F6, Series I, Series T6 and Series X units of a mutual fund trust Start Date Series A: September 13, 1999 (1) Series F: July 5, 2004 (1) Series F6: July 9, 2007 Series I: October 26, 2005 Series T6: July 9, 2007 Series X: December 1, 2008 (2) Eligible for Registered Plans Yes Management Fees Series A: 2.25% Series F: 0.85% Series F6: 0.85% Series I: negotiated and paid by each Series I investor Series T6: 2.25% Series X: 2.25% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec (1) Series A and Series F Securities are closed to new investors. Investors who currently hold these series may purchase additional Securities. Series A Securities may be switched to Series F Securities and vice versa. IA Clarington may re-open these series to new investors in its discretion. (2) Series X units of the Fund may be switched to Series A units of the Fund and vice versa, but are not otherwise available for purchase. IA Clarington may re-open this series of units in its discretion. What Does the Fund Invest In? Investment Objective The Fund’s objective is to maximize after tax income with a focus on the preservation and enhancement of capital by investing primarily in Canadian equities. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: emphasizes investments in Canadian common shares that pay dividends, invests primarily in securities that derive income and provide the Fund with the ability to pay monthly distributions, protect the value of investment and achieve long-term capital appreciation, diversifies through investment in securities of companies of many industries, invests in short-term debt securities where deemed appropriate, 179 IA Clarington Canadian Dividend Fund (continued) monitors and reviews investments on an ongoing basis to ensure that the best relative values are identified, may invest in foreign securities; such investments will generally be less than 30% of the cost amount of the Fund, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk currency risk derivatives risk equity market risk ETF risk foreign investment risk income trust risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk 180 IA Clarington Canadian Dividend Fund (continued) tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. Who Should Invest in this Fund? Investors: seeking dividend income and the possibility of capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A and Series F units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series monthly, based on the NAV per unit of that series as of the last business day of the second calendar month preceding the distribution date. If the annualized monthly distribution per unit of the series is between approximately 8% and 16% of the NAV per unit as of that date, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be one-twelfth of 12% of that NAV per unit of the series. The current monthly distribution rate is $0.038 per Series A unit. For Series F units, the current monthly distribution rate is $0.041 per unit. The current monthly distribution rates for Series A and Series F units will remain in effect until adjusted in accordance with this distribution policy. For Series F6 and Series T6 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.043 per Series F6 unit and $0.041 per Series T6 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series I units, the Fund will undertake to pay a monthly distribution. This distribution is reviewed periodically. For Series X units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. Effective December 31, 2009, if the annualized monthly distribution per unit of the series at that time is between approximately 8% and 16% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be one-twelfth of 12% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.038 per Series X unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual 181 IA Clarington Canadian Dividend Fund (continued) performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $29.07 3 years $91.63 5 years $160.60 10 years $365.58 Series F expenses payable over: 1 year $12.10 3 years $38.13 5 years $66.84 10 years $152.14 Series F6 expenses payable over: 1 year $11.98 3 years $37.75 5 years $66.17 10 years $150.63 Series T6 expenses payable over: 1 year $28.86 3 years $90.98 5 years $159.47 10 years $363.00 Series X expenses payable over: 1 year $28.90 3 years $91.09 5 years $159.66 10 years $363.44 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 182 IA Clarington Canadian Growth Class Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series F, Series I and Series O shares of a mutual fund corporation Start Date Series A: October 5, 2000 Series F: February 5, 2014 Series I: February 5, 2014 Series O: February 5, 2014 Eligible for Registered Plans Yes Management Fee Series A: 2.30% Series F: 0.75% Series I: negotiated and paid by each Series I investor Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve long-term growth of capital by investing primarily in a diversified portfolio of equity securities of Canadian companies. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: selects equity securities with a long term investment prospect, employs an investment process that integrates both a top down economic view as well as a bottom up fundamental analysis, primarily has a larger cap bias but may hold equity securities of all capitalizations, maintains a diversification within the S&P/TSX Composite Index industry groups, monitors and reviews investments on an ongoing basis to ensure that the best relative values are identified, may invest in foreign securities; such investments will generally be less than 30% of the cost amount of the Fund, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are the same as the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, 183 IA Clarington Canadian Growth Class (continued) may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: corporate class risk currency risk derivatives risk equity market risk ETF risk foreign investment risk income trust risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, 184 IA Clarington Canadian Growth Class (continued) with medium risk tolerance, and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $29.86 3 years $94.12 5 years $164.97 10 years $375.53 Series F expenses payable over: 1 year $10.30 3 years $32.47 5 years $56.91 10 years $129.55 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 185 IA Clarington Canadian Leaders Class Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series F, Series I, Series L and Series O shares of a mutual fund corporation Start Date Series A: July 4, 2008 Series F: July 4, 2008 Series I: February 5, 2014 Series L: February 5, 2014 Series O: February 5, 2014 Eligible for Registered Plans Yes Management Fees Series A: 1.90% Series F: 0.75% Series I: negotiated and paid by each Series I investor Series L: 1.90% Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve superior long-term capital appreciation that is consistent with the protection of the Fund’s capital. The Fund will invest primarily in a diversified portfolio of equity securities of large capitalization Canadian corporations which, in the opinion of the portfolio manager, are leaders in their respective industries. It may invest in those securities either directly or by investing in securities of another mutual fund that invests in those securities. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: primarily invests in equity securities of Canadian issuers listed on the TSX that possess strong consistent earnings and dividend growth potential, has a large cap bias, but may hold equity securities of all capitalizations, may invest in foreign securities; such investments will generally be less than 30% of the cost amount of the Fund, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between mutual funds, 186 IA Clarington Canadian Leaders Class (continued) may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: corporate class risk concentration risk credit risk currency risk derivatives risk equity market risk ETF risk foreign investment risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. 187 IA Clarington Canadian Leaders Class (continued) Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.33 3 years $79.84 5 years $139.95 10 years $318.56 Series F expenses payable over: 1 year $10.45 3 years $32.95 5 years $57.76 10 years $131.47 Series L expenses payable over: 1 year $25.25 3 years $79.59 5 years $139.51 10 years $317.56 Series O expenses payable over: 1 year $0.93 3 years $2.92 5 years $5.11 10 years $11.64 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 188 IA Clarington Canadian Small Cap Fund Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series E, Series F, Series FE, Series I, Series L, Series O and Series P units of a mutual fund trust Start Date Series A: March 20, 1997 Series E: November 3, 2014 Series F: July 5, 2004 Series FE: June 25, 2015 Series I: July 5, 2004 Series L: February 28, 2011 Series O: July 19, 2010 Series P: November 3, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.40% Series E: 2.00% Series F: 1.10% Series FE: 1.00% Series I: negotiated and paid by each Series I investor Series L: 2.40% Series O: negotiated and paid by each Series O investor Series P: 1.00%(1) Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor QV Investors Inc. Calgary, Alberta (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to maximize long-term growth of capital by investing primarily in equity securities of small capitalization Canadian companies. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: invests primarily in equities of Canadian smaller capitalization companies. For the Fund’s investment purposes, companies with a market capitalization of less than $3 billion are considered to be smaller capitalization companies. 189 IA Clarington Canadian Small Cap Fund (continued) may invest in foreign securities; such investments will generally be less than 30% of the cost amount of the Fund, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10 and may use derivatives such as options, futures, forward contracts and swaps for hedging purposes only. Please see the discussion under “Derivatives Risk” on page 7 for more details. The portfolio manager will generally look for companies with one or more of the following characteristics: provides a unique product or service, strong growth in sales or assets, entrepreneurial management with an equity interest and undervalued assets. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: concentration risk currency risk derivatives risk equity market risk ETF risk foreign investment risk income trust risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. 190 IA Clarington Canadian Small Cap Fund (continued) As at May 23, 2017, Industrial Alliance held, on behalf of other investors, 18.86% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. The Fund will not pay a monthly distribution to any of its series. These series may pay an annual income or capital gain distribution in December of each year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $30.79 3 years $97.06 5 years $170.13 10 years $387.26 Series E expenses payable over: 1 year $25.65 3 years $80.85 5 years $141.71 10 years $322.57 Series F expenses payable over: 1 year $14.21 3 years $44.79 5 years $78.51 10 years $178.71 Series FE expenses payable over: 1 year $13.99 3 years $44.10 5 years $77.29 10 years $175.94 Series L expenses payable over: 1 year $31.22 3 years $98.43 5 years $172.52 10 years $392.70 Series O expenses payable over: 1 year $0.85 3 years $2.69 5 years $4.72 10 years $10.75 Series P expenses payable over: 1 year $2.34 3 years $7.39 5 years $12.95 10 years $29.48 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 191 IA Clarington Canadian Small Cap Class Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series E, Series F, Series FE and Series P shares of a mutual fund corporation Start Date Series A: July 4, 2008 Series E: November 3, 2014 Series F: July 4, 2008 Series FE: June 25, 2015 Series P: November 3, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.40% Series E: 2.00% Series F: 1.10% Series FE: 1.00% Series P: 1.00%(1) Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-advisor QV Investors Inc. Calgary, Alberta (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to maximize long-term growth of capital by investing primarily in equity securities of small capitalization Canadian companies. It may invest in those securities either directly or by investing in securities of another mutual fund that invests in those securities. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Canadian Small Cap Fund, which we refer to as the “ Reference Fund”. The Fund: will hold cash or cash equivalents only while the investment in units of the Reference Fund is pending or in order to facilitate redemptions. The investment strategies of the Reference Fund are set out on page 189 of this document. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk and tracking risk, as well as to risks relating to the Reference Fund. The risks of the Reference Fund are: 192 IA Clarington Canadian Small Cap Class (continued) concentration risk currency risk derivatives risk equity market risk ETF risk foreign investment risk income trust risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 100.00% of its net assets in units of IA Clarington Canadian Small Cap Fund during the past year. This investment did not result in any additional risk to the Fund Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance and planning to invest over the long term. IA Clarington Canadian Small Cap Class may be less appropriate for investments made through a registered plan than IA Clarington Canadian Small Cap Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. 193 IA Clarington Canadian Small Cap Class (continued) Series A expenses payable over: 1 year $30.95 3 years $97.56 5 years $171.00 10 years $389.24 Series E expenses payable over: 1 year $25.31 3 years $79.78 5 years $139.84 10 years $318.31 Series F expenses payable over: 1 year $14.83 3 years $46.74 5 years $81.93 10 years $186.49 Series FE expenses payable over: 1 year $14.14 3 years $44.58 5 years $78.14 10 years $177.88 Series P expenses payable over: 1 year $2.41 3 years $7.61 5 years $13.34 10 years $30.37 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 194 IA Clarington Dividend Growth Class Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series E, Series E6, Series F, Series F6, Series FE, Series FE6, Series F10, Series I, Series L6, Series L10(1), Series O, Series P, Series P6, Series T6 and Series T10 shares of a mutual fund corporation Start Date Series A: June 20, 2016 Series E: November 3, 2014 Series E6: February 5, 2014 Series F: June 20, 2016 Series F6: January 26, 2009 Series F10: January 26, 2009(1) Series FE: June 25, 2015 Series FE6: June 25, 2015 Series I: February 5, 2014 Series L6: February 5, 2014 Series L10: February 5, 2014(1) Series O: February 5, 2014 Series P: November 3, 2014 Series P6: November 3, 2014 Series T6: January 26, 2009 Series T10: January 26, 2009(1) Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E: 1.60% Series E6: 1.60% Series F: 0.80% Series F6: 0.80% Series F10: 0.80% Series FE: 0.60% Series FE6: 0.60% Series I: negotiated and paid by each Series I investor Series L6: 1.95% Series L10: 1.95% Series O: negotiated and paid by each Series O investor Series P: 0.60%(2) Series P6: 0.60%(2) Series T6: 1.95% Series T10: 1.95% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec (1) Series F10, Series L10 and Series T10 Securities are closed to new investors. Investors who currently hold these series may purchase additional 195 IA Clarington Dividend Growth Class (continued) Securities. IA Clarington may re-open these series to new investors in its discretion.. (2) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objectives The Fund’s objective is to provide a return that is similar to the return of a Canadian dividend mutual fund. The Fund invests primarily, directly or indirectly, in securities held by a Canadian dividend mutual fund managed by IA Clarington, or an affiliate or associate of IA Clarington, and may invest all or a portion of its portfolio in Securities of the Reference Fund. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The portfolio manager may invest substantially all of the Fund’s assets in units of a Canadian dividend mutual fund managed by IA Clarington, or an affiliate of IA Clarington. The Fund may also: invest directly in Canadian common shares which pay dividends, invest in securities that derive income and provide the Fund with the ability to pay monthly dividends, protect the value of investment and achieve long-term capital appreciation, seek diversification through investment in securities of companies of many industries, invest in short-term debt securities where deemed appropriate, invest in foreign securities; such investments will generally be less than 30% of the cost amount of the Fund, from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the 196 IA Clarington Dividend Growth Class (continued) investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk corporate class risk currency risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk income trust risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, Industrial Alliance held, on behalf of other investors, 56.56% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking dividend income with the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. 197 IA Clarington Dividend Growth Class (continued) For Series A, Series E, Series F, Series FE, Series I, Series O and Series P shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E6, Series F6, Series F10, Series FE6, Series L6, Series L10, Series P6, Series T6 and Series T10 shares, CSFI will make a monthly dividend of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 5% and 7% (for Series E6, Series F6, Series FE6, Series L6, Series P6 and Series T6 shares), or between approximately 8% and 12% (for Series F10, Series L10 and Series T10 shares), of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 6% (for Series E6, Series F6, Series FE6, Series L6, Series P6 and Series T6 shares), and one-twelfth of 10% (for Series F10, Series L10 and Series T10 shares) of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.051 per Series E6 or Series L6 share, $0.077 per Series F6 share, $0.050 per Series FE6 or Series P6 share, $0.081 per Series F10 share, $0.063 per Series T6 share, $0.061 per Series L10 share and $0.089 per Series T10 share, which rates will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $26.11 3 years $82.31 5 years $144.27 10 years $328.41 Series E expenses payable over: 1 year $20.59 3 years $64.90 5 years $113.76 10 years $258.95 Series E6 expenses payable over: 1 year $20.60 3 years $64.93 5 years $113.81 10 years $259.07 Series F expenses payable over: 1 year $10.42 3 years $32.86 5 years $57.59 10 years $131.09 Series F6 expenses payable over: 1 year $10.55 3 years $33.27 5 years $58.31 10 years $132.74 Series F10 expenses payable over: 1 year $10.76 3 years $33.91 5 years $59.44 10 years $135.31 Series FE expenses payable over: 1 year $8.70 3 years $27.44 5 years $48.09 10 years $109.47 Series FE6 expenses payable over: 1 year $8.18 3 years $25.78 5 years $45.18 10 years $102.85 Series L6 expenses payable over: 1 year $26.68 3 years $84.11 5 years $147.43 10 years $335.59 Series L10 expenses payable over: 1 year $26.10 3 years $82.28 5 years $144.22 10 years $328.29 Series O expenses payable over: 1 year $0.86 3 years $2.72 5 years $4.77 10 years $10.86 198 IA Clarington Dividend Growth Class (continued) Series P expenses payable over: 1 year $1.71 3 years $5.39 5 years $9.46 10 years $21.52 Series P6 expenses payable over: 1 year $1.71 3 years $5.39 5 years $9.46 10 years $21.52 Series T6 expenses payable over: 1 year $26.06 3 years $82.14 5 years $143.98 10 years $327.74 Series T10 expenses payable over: 1 year $25.79 3 years $81.30 5 years $142.50 10 years $324.36 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 199 IA Clarington Focused Canadian Equity Class Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series E, Series E5, Series EX, Series EX5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5, Series I, Series O, Series P, Series P5 and Series T5 shares of a mutual fund corporation Start Date Series A: June 4, 2012 Series E: November 3, 2014 Series E5: November 3, 2014 Series EX: June 4, 2012(1) Series EX5: June 4, 2012(1) Series F: June 4, 2012 Series F5: June 4, 2012 Series FE: June 25, 2015 Series FE5: June 25, 2015 Series I: June 4, 2012 Series L: June 4, 2012 Series L5: June 4, 2012 Series O: June 4, 2012 Series P: November 3, 2014 Series P5: November 3, 2014 Series T5: June 4, 2012 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.75% Series E5: 1.75% Series EX: 1.75% Series EX5: 1.75% Series F: 1.00% Series F5: 1.00% Series FE: 0.75% Series FE5: 0.75% Series I: negotiated and paid by each Series I investor Series L: 2.00% Series L5: 2.00% Series O: negotiated and paid by each Series O investor Series P: 0.75%(2) Series P5: 0.75%(2) Series T5: 2.00% This fund also pays us a performance fee, capped at 1.85% per annum. This fee is charged in respect of, and allocated to, each series of Securities. See “Fees and expenses payable by the Funds – Performance Fees” on page 29 for details. 200 IA Clarington Focused Canadian Equity Class (continued) Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Taylor Asset Management Inc. Toronto, Ontario (1) Effective October 24, 2014, all of the issued and outstanding Series E and Series EX5 Securities were re-designated as Series EX and Series EX5 Securities, respectively. Series EX and Series EX5 Securities are closed to new investors. Investors who currently hold these series may purchase additional Securities. IA Clarington may re-open these series to new investors in its discretion. (2)A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objectives The Fund achieves long-term capital growth by investing primarily in equity securities of Canadian companies. The fundamental investment objectives may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: invests primarily in Canadian equity securities of any market capitalization that represent good value based on current stock prices relative to their intrinsic value, utilizes a fundamentals-based, bottom-up security selection process emphasizing company-specific analysis, may invest up to 49% of its assets in foreign securities, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered 201 IA Clarington Focused Canadian Equity Class (continued) “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in the Fund are: capital depletion risk concentration risk corporate class risk currency risk derivatives risk equity market risk ETF risk foreign investment risk large transaction risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. For Series A, Series E, Series EX, Series F, Series FE, Series I, Series L, Series O and Series P shares CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E5, Series EX5, Series F5, Series FE5, Series L5, Series P5 and Series T5 shares, CSFI will make a monthly dividend of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 4% and 6% (for Series E5, Series EX5, Series F5, Series FE5, Series L5, Series P5 and Series T5 shares) of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the 202 IA Clarington Focused Canadian Equity Class (continued) annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 5% (for Series E5, Series EX5, Series F5, Series FE5, Series L5, Series P5 and Series T5 shares) of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.044 per Series E5 shares, $0.042 per Series EX5, Series L5 and Series T5 shares, $0.053 per Series F5 shares, and $0.045 per Series FE5 and Series P5 shares, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.16 3 years $79.32 5 years $139.04 10 years $316.49 Series E expenses payable over: 1 year $22.86 3 years $72.07 5 years $126.32 10 years $287.54 Series E5 expenses payable over: 1 year $21.97 3 years $66.74 5 years $116.98 10 years $266.28 Series EX expenses payable over: 1 year $21.17 3 years $66.74 5 years $116.98 10 years $266.28 Series EX5 expenses payable over: 1 year $21.99 3 years $69.32 5 years $121.51 10 years $276.59 Series F expenses payable over: 1 year $13.11 3 years $41.34 5 years $72.46 10 years $164.94 Series F5 expenses payable over: 1 year $12.68 3 years $39.98 5 years 70.08 10 years $159.51 Series FE expenses payable over: 1 year $11.59 3 years $36.53 5 years $64.03 10 years $145.74 Series FE5 expenses payable over: 1 year $10.94 3 years $34.49 5 years $60.45 10 years $137.59 Series L expenses payable over: 1 year $25.60 3 years $80.70 5 years $141.45 10 years $321.98 Series L5 expenses payable over: 1 year $24.94 3 years $78.61 5 years $137.79 10 years $313.64 Series O expenses payable over: 1 year $0.74 3 years $2.35 5 years $4.11 10 years $9.36 Series P expenses payable over: 1 year $2.78 3 years $8.76 5 years $15.36 10 years $34.95 Series P5 expenses payable over: 1 year $2.86 3 years $9.00 5 years $15.78 10 years $35.92 203 IA Clarington Focused Canadian Equity Class (continued) Series T5 expenses payable over: 1 year $25.87 3 years $81.56 5 years $142.96 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 204 10 years $325.42 IA Clarington Inhance Canadian Equity SRI Class Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series E, Series F, Series FE, Series I, Series L and Series V shares of a mutual fund corporation Start Date Series A: November 30, 2009 Series E: June 20, 2016 Series F: November 30, 2009 Series FE: June 20, 2016 Series I: November 30, 2009 Series L: June 20, 2016 Series V: November 30, 2009 Eligible for Registered Plans Yes Management Fees Series A: 2.05% Series E: 1.95% Series F: 1.00% Series FE: 0.95% Series I: negotiated and paid by each Series I investor Series L: 2.05% Series V: negotiated and paid by the portfolio manager or each Series V investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Vancity Investment Management Limited Vancouver, British Columbia What Does the Fund Invest In? Investment Objectives The Fund’s objective is to achieve long-term growth of capital by investing primarily in a diversified portfolio of Canadian equity securities of issuers which meet the sub-advisor’s socially responsible investment principles. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor selects investments by: using fundamental financial analysis to examine a company’s earnings, profitability growth, credit position, cash flow and long-term sustainability of the issuer’s business model, assessing an issuer’s performance respecting corporate governance, employee and community relations, and environmental management, and looking for securities that the sub-advisor feels are trading below their expected value and selling these securities when the price fully reflects that value. 205 IA Clarington Inhance Canadian Equity SRI Class (continued) The Fund: invests primarily in a broad selection of Canadian publicly traded common shares, preferred shares and convertible securities, maintains a well diversified portfolio, may also invest in securities of non-Canadian issuers; such investments will generally be no more than 15% of the net assets of the Fund, invests in accordance with the SRI principles described on page 48, by seeking companies with progressive social, environmental and governance practices such as: o companies that derive most of their revenues from products, processes or services that have minimal negative impacts on consumers and local communities o companies that work with their employees and communities where they operate. These companies pursue diversity among their management, have progressive employee and supplier relations and display competence in the management of human rights, and o companies that have an understandable business model and demonstrate a competitive advantage, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund's investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: concentration risk corporate class risk credit risk currency risk derivatives risk 206 IA Clarington Inhance Canadian Equity SRI Class (continued) equity market risk ETF risk foreign investment risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, three mutual funds managed by us held 32.29%, 30.24% and 13.44%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $26.42 3 years $83.28 5 years $145.98 10 years $332.29 Series E expenses payable over: 1 year $26.02 3 years $82.04 5 years $143.79 10 years $327.31 207 IA Clarington Inhance Canadian Equity SRI Class (continued) Series F expenses payable over: 1 year $13.26 3 years $41.80 5 years $73.27 10 years $166.78 Series FE expenses payable over: 1 year $12.48 3 years $39.35 5 years $68.96 10 years $156.98 Series L expenses payable over: 1 year $28.08 3 years $88.51 5 years $155.14 10 years $353.13 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 208 IA Clarington North American Opportunities Class Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series E, Series F, Series FE, Series I, Series L and Series P shares of a mutual fund corporation Start Date Series A: December 22, 2014 Series E: December 22, 2014 Series F: December 22, 2014 Series FE: June 25, 2015 Series I: June 20, 2016 Series L: December 22, 2014 Series P: December 22, 2014 Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E: 1.75% Series F: 0.95% Series FE: 0.75% Series I: negotiated and paid by each Series I investor Series L: 1.95% Series P: 0.75%(1) Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What does the Fund Invest In? Investment Objectives The Fund’s objective is to provide long-term capital appreciation by investing in equity securities issued by North American companies, with a focus on Canadian companies. The fundament investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor uses fundamental and macro analysis to select investments and reviews the values of the investments on an ongoing basis, paying particular attention to quality and diversification by geographic region, industry sector, size of issuer and credit rating. The sub-advisor uses a value-oriented approach to equity investments as a primary method for equity securities selection, searching for companies that are able to maintain and grow cash flows and their distributions. In addition, the sub-advisor will look for businesses offering superior long-term earnings growth and having a competitive advantage in the market in which it operates and quality management. The Fund: 209 IA Clarington North American Opportunities Class (continued) invests in North American equity securities, primarily in Canada, including, but not limited to, common and preferred shares, convertible securities (including convertible bonds and warrants), income trust units and similar entities, may invest a portion of the Fund’s assets in non-Canadian securities; such investments will generally be up to 49% of the net assets of the Fund, may invest in companies of all market capitalization, may invest in all types of equity securities and debt obligations that may or may not be listed for trading upon the facilities of stock exchanges or other organized and regulated trading facilities, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual funds securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net of 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “nonhedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in 210 IA Clarington North American Opportunities Class (continued) an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk corporate class risk currency risk derivatives risk equity market risk ETF risk foreign investment risk income trust risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk short selling risk smaller capitalization risk You will find an explanation of each risk under “What are the Specific Risks Associated with this Mutual Fund?” beginning on page 5 of this document. As at May 23, 2017, two mutual funds managed by us held 12.56% and 11.54%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation with a medium risk tolerance, and planning to invest over the long term. This Fund may not be appropriate for investors with a short-term investment horizon. 211 IA Clarington North American Opportunities Class (continued) The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of the Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.36 3 years $79.94 5 years $140.12 10 years $318.96 Series E expenses payable over: 1 year $22.84 3 years $72.00 5 years $126.20 10 years $287.26 Series F expenses payable over: 1 year $12.97 3 years $40.88 5 years $71.66 10 years $163.12 Series FE expenses payable over: 1 year $10.55 3 years $33.27 5 years $58.31 10 years $132.74 Series L expenses payable over: 1 year $25.25 3 years $79.61 5 years $139.54 10 years $317.63 Series P expenses payable over: 1 year $2.00 3 years $6.29 5 years $11.02 10 years $25.09 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 212 IA Clarington Strategic Equity Income Fund Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series E, Series E6, Series F, Series F6, Series I, Series L, Series L6, Series O, Series T6 and Series Y units of a mutual fund trust Start Date Series A: August 8, 2011 Series E: August 8, 2011(1) Series E6: August 8, 2011(1) Series F: August 8, 2011(1) Series F6: October 11, 2005(1) Series I: August 26, 2005 Series L: August 8, 2011 Series L6: August 8, 2011 Series O: July 19, 2010 Series T6: October 1, 2006 Series Y: May 1994(2) Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E: 1.65% Series E6: 1.65% Series F: 0.70% Series F6: 0.70% Series I: negotiated and paid by each Series I Investor Series L: 1.95% Series L6: 1.95% Series O: negotiated and paid by each Series O investor Series T6: 1.95% Series Y: 1.50% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) Series E, Series E6, Series F and Series F6 Securities are closed to new investors. Investors who currently hold these series may purchase additional Securities. IA Clarington may re-open these series to new investors in its discretion. (2) Effective August 8, 2011, all of the issued and outstanding Series T4 units were redesignated as Series Y units. What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate regular dividend and interest income and moderate long term capital growth. 213 IA Clarington Strategic Equity Income Fund (continued) The Fund invests primarily in high quality dividend paying common and preferred shares of Canadian and U.S. issuers, as well as income trust units and/or fixed income securities of Canadian and U.S. issuers. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: may invest the equity component of its portfolio in common shares that pay dividends, preferred shares and income trust securities, may invest a portion of its portfolio in foreign securities; such investments will generally be less than 49% of the cost amount of the Fund, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund's investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, and may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. 214 IA Clarington Strategic Equity Income Fund (continued) The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk credit risk currency risk derivatives risk equity market risk ETF risk foreign investment risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, a mutual fund managed by us held 22.10% and Industrial Alliance, on behalf of other investors held 33.45%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: 215 IA Clarington Strategic Equity Income Fund (continued) seeking dividend income and the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 45 for more details of the Fund’s distribution policy. Series A, E, F and L units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E6, F6, L6 and T6 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.061 per Series E6 and L6 units, $0.048 per Series F6 unit and $0.039 per Series T6 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series Y units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 3% and 5% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 4% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.079 per Series Y unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series I and Series O units, the Fund will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $24.98 3 years $78.74 5 years $138.02 10 years $314.17 Series E expenses payable over: 1 year $20.25 3 years $63.83 5 years $111.88 10 years $254.67 Series E6 expenses payable over: 1 year $21.00 3 years $66.21 5 years $116.05 10 years $264.15 Series F expenses payable over: 1 year $9.69 3 years $30.56 5 years $53.56 10 years $121.93 216 IA Clarington Strategic Equity Income Fund (continued) Series F6 expenses payable over: 1 year $9.37 3 years $29.53 5 years $51.76 10 years $117.83 Series L expenses payable over: 1 year $24.91 1 year $24.47 3 years $78.53 3 years $77.15 5 years $137.64 5 years $135.22 10 years $313.31 10 years $307.81 Series O expenses payable over: 1 year $0.87 3 years $2.75 5 years $4.82 10 years $10.98 Series T6 expenses payable over: 1 year $24.78 3 years $78.11 5 years $136.92 10 years $311.66 Series Y expenses payable over: 1 year $21.20 3 years $66.85 5 years $117.17 10 years $266.71 Series L6 expenses payable over: Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 217 IA Clarington Strategic Equity Income Class Fund Details Type of Fund Canadian Equity Securities Offered Series A, Series E, Series E6, Series F, Series F6, Series FE, Series FE6, Series L, Series L6, Series L8, Series P, Series P6, Series T6 and Series T8 shares of a mutual fund corporation Start Date Series A: October 3, 2013 Series E: November 3, 2014 Series E6: November 3, 2014 Series F: October 3, 2013 Series F6: October 3, 2013 Series FE: June 25, 2015 Series FE6: June 25, 2015 Series L: February 5, 2014 Series L6: February 5, 2014 Series L8: February 5, 2014 Series P: November 3, 2014 Series P6: November 3, 2014 Series T6: January 26, 2009 Series T8: October 3, 2013 Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E: 1.75% Series E6: 1.75% Series F: 0.90% Series F6: 0.90% Series FE : 0.75% Series FE6 : 0.75% Series L: 1.95% Series L6: 1.95% Series L8: 1.95% Series P: 0.75%(1) Series P6: 0.75%(1) Series T6: 1.95% Series T8: 1.95% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. 218 IA Clarington Strategic Equity Income Class (continued) What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate regular dividend and interest income and moderate long term capital growth by investing primarily in high quality dividend paying common and preferred securities of Canadian and U.S. issuers, income trust units and/or fixed income securities of Canadian and U.S issuers. The Fund invests primarily in securities of a Canadian equity mutual fund managed by IA Clarington, or an affiliate or associate of IA Clarington. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Strategic Equity Income Fund which is the Reference Fund. The Fund may hold cash or cash equivalents while the investment in units of the Reference Fund is pending or in order to facilitate redemptions. The investment strategies of the Reference Fund are set out on page 213 of this document. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk and tracking risk, as well as to risks relating to the Reference Fund. The risks of the Reference Fund are: capital depletion risk concentration risk credit risk currency risk derivatives risk equity market risk ETF risk foreign investment risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk tax risk 219 IA Clarington Strategic Equity Income Class (continued) You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 100% of its net assets in units of IA Clarington Strategic Equity Income Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking dividend income and the possibility of capital appreciation, with medium risk tolerance, planning to invest over the medium to long term. IA Clarington Strategic Equity Income Class may be less appropriate for investments made through a registered plan than IA Clarington Strategic Equity Income Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series L and Series P shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E6, Series F6, Series FE6, Series L6, Series L8, Series P6, Series T6 and Series T8 shares, CSFI will make a monthly dividend of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 5% to 7% (for Series E6, Series F6, Series FE6, Series L6, Series P6 and Series T6 shares, or between approximately 7% to 9% (for Series L8 and Series T8 shares), of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 6% (for Series E6, Series F6, Series FE6, Series L6, Series P6 and T6 shares), and approximately one-twelfth of 8% (for Series L8 and T8 shares) of the NAV per share of the series as of December 31 of the previous year. The currently monthly dividend rate is $0.050 per Series E6, Series F6, Series FE6, Series L6, Series P6 share, $0.062 per Series T6 share and $0.067 per Series L8 and Series T8 share, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $24.96 3 years $78.68 5 years $137.92 10 years $313.94 Series E expenses payable over: 1 year $22.84 3 years $72.02 5 years $126.23 10 years $287.34 220 IA Clarington Strategic Equity Income Class (continued) Series E6 expenses payable over: 1 year $23.29 3 years $73.43 5 years $128.71 10 years $292.99 Series F expenses payable over: 1 year $12.01 3 years $37.85 5 years $66.34 10 years $151.01 Series F6 expenses payable over: 1 year $12.23 3 years $38.54 5 years $67.55 10 years $153.77 Series FE expenses payable over: 1 year $11.24 3 years $35.44 5 years $62.12 10 years $141.41 Series FE6 expenses payable over: 1 year $11.30 3 years $35.63 5 years $62.46 10 years $142.17 Series L expenses payable over: 1 year $25.35 3 years $79.92 5 years $140.08 10 years $318.86 Series L6 expenses payable over: 1 year $25.09 3 years $79.09 5 years $138.63 10 years $315.56 Series L8 expenses payable over: 1 year $25.96 3 years $81.84 5 years $143.44 10 years $326.51 Series P expenses payable over: 1 year $2.22 3 years $7.01 5 years $12.28 10 years $27.95 Series P6 expenses payable over: 1 year $2.39 3 years $7.54 5 years $13.21 10 years $30.07 Series T6 expenses payable over: 1 year $25.14 3 years $79.26 5 years $138.92 10 years $316.22 Series T8 expenses payable over: 1 year $25.47 3 years $80.31 5 years $140.76 10 years $320.41 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 221 IA Clarington Global Growth & Income Fund Fund Details Type of Fund Global Balanced Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series I, Series L, Series L5, Series P, Series P5 and Series T5 units of a mutual fund trust Start Date Series A: September 26, 2014 Series E: November 3, 2014 Series E5: November 3, 2014 Series F: September 26, 2014 Series F5: September 26, 2014 Series FE: June 25, 2015 Series FE5: June 25, 2015 Series I: September 26, 2014 Series L: September 26, 2014 Series L5: September 26, 2014 Series P: November 3, 2014 Series P5: November 3, 2014 Series T5: September 26, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.75% Series E5 1.75% Series F: 0.90% Series F5: 0.90% Series FE: 0.75% Series FE5: 0.75% Series I: negotiated and paid by each Series I investor Series L: 2.00% Series L5: 2.00% Series P: 0.75%(1) Series P5: 0.75%(1) Series T5: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisors Radin Capital Partners Inc. Toronto, Ontario IA Clarington Investments Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. 222 IA Clarington Global Growth & Income Fund (continued) What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide unitholders with income and long-term capital appreciation by investing in equity securities of primarily large and mid-capitalization companies from around the world and in securities of fixed income mutual funds. The fundamental investment objective may only be changed with the approval of a majority of unitholders at a meeting called for that purpose. Investment Strategies Radin Capital Partners Inc. uses a value approach to investments as a primary method to equity securities selection. It manages the equity portion of the Fund’s portfolio and determines the allocation between equity and fixed income investments. Equity allocations will generally range from 60% to 85% and fixed income allocations will generally range from 15% to 40%. IA Clarington Investments Inc. manages the fixed income portion of the Fund’s portfolio. The Fund: invests in global securities including, but not limited to, common and preferred shares, convertible securities (including convertible bonds and warrants) and income trust units, invests the equity component of its portfolio primarily in large and mid-capitalization companies, may from time to time invest a portion of its net assets in units or shares of other fixed income mutual funds that may be managed by IA Clarington or an affiliate. The Fund will generally not invest more than 60% of its net assets in other investment funds. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sale charges between the mutual funds. With respect to senior loans, the sub-advisor will invest in primary offerings of senior loans typically managed by one or more of the largest U.S. and global commercial banks; and the sub-advisor may buy and sell senior loan participations and/or assignments in transactions with fixed income trading departments of the largest U.S. and global commercial banks, for which the settlement process may be facilitated by an established third party electronic system. Other floating rate debt instruments in which the Fund may invest include floating rate notes. Floating rate notes may be secured or unsecured and therefore may rank equally with or may be subordinated to, the senior loans. Interest on the notes is paid and reset periodically, typically quarterly, on the basis of the base rate, such as the London Interbank Offered Rate, plus a margin or premium. The margin is determined by the credit quality of the issuer, the term to maturity of the floating rate note, and the prevailing market conditions. may invest in any number of issuers located in one country or industry, may invest in all types of equity securities that may or may not be listed for trading upon the facilities of stock exchanges or other organized and regulated trading facilities, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor will engage in short selling 223 IA Clarington Global Growth & Income Fund (continued) as a complement to the Fund’s current primary discipline of buying securities with the expectation that they will appreciate in market value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “nonhedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in the Fund are: asset-backed and mortgage-backed securities risk capital depletion risk credit risk currency risk default risk derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk income trust risk interest rate risk large transaction risk liquidity risk prepayment risk reinvestment risk repurchase and reverse repurchase transactions and securities lending risk series risk 224 IA Clarington Global Growth & Income Fund (continued) short selling risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with this Mutual Fund?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 32.53% of its net assets in units of IA Clarington Floating Rate Income Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking capital appreciation and income, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, Series E, Series F, Series FE, Series I, Series L and Series P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 unit which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.24 3 years $79.57 5 years $139.47 10 years $317.48 Series E expenses payable over: 1 year $23.13 3 years $72.91 5 years $127.80 10 years $290.91 Series E5 expenses payable over: 1 year $23.63 3 years $74.50 5 years $130.58 10 years $297.24 225 IA Clarington Global Growth & Income Fund (continued) Series F expenses payable over: 1 year $12.74 3 years $40.15 5 years $70.38 10 years $157.29 Series F5 expenses payable over: 1 year $12.50 3 years $39.42 5 years $69.10 10 years $157.29 Series FE expenses payable over: 1 year $11.76 3 years $37.07 5 years $64.98 10 years $147.91 Series FE5 expenses payable over: 1 year $11.74 3 years $37.02 5 years $64.89 10 years $147.70 Series L expenses payable over: 1 year $25.88 3 years $81.60 5 years $143.02 10 years $325.55 Series L5 expenses payable over: 1 year $26.17 3 years $82.50 5 years $144.60 10 years $329.15 Series P expenses payable over: 1 year $3.01 3 years $9.50 5 years $16.66 10 years $37.92 Series P5 expenses payable over: 1 year $2.99 3 years $9.42 5 years $16.51 10 years $37.58 Series T5 expenses payable over: 1 year $25.06 3 years $79.00 5 years $138.46 10 years $315.18 Please see “Fund Expenses Indirectly Borne by Investors” on page ● for further information. 226 IA Clarington Global Tactical Income Fund Fund Details Type of Fund Diversified Income Securities Offered Series A, Series E, Series E6, Series F, Series F6, Series F8, Series FE, Series FE6, Series I, Series L, Series L6, Series L8, Series O, Series P, Series P6, Series T6 and Series T8 units of a mutual fund trust Start Date Series A: July 13, 2009 Series E: November 3, 2014 Series E6: November 3, 2014 Series F: July 19, 2010 Series F6: July 9, 2007 Series F8: July 5, 2004 Series FE: June 25, 2015 Series FE6: June 25, 2015 Series I: July 5, 2004 Series L: February 28, 2011 Series L6: February 28, 2011 Series L8: February 28, 2011 Series O: July 19, 2010 Series P: November 3, 2014 Series P6: November 3, 2014 Series T6: July 9, 2007 Series T8: January 31, 2001 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.80% Series E6: 1.80% Series F: 0.95% Series F6: 0.95% Series F8: 0.95% Series FE: 0.80% Series FE6: 0.80% Series I: negotiated and paid by each Series I investor Series L: 2.00% Series L6: 2.00% Series L8: 2.00% Series O: negotiated and paid by each Series O investor Series P: 0.80%(1) Series P6: 0.80%(1) Series T6: 2.00% Series T8: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec 227 IA Clarington Global Tactical Income Fund (continued) Sub-Advisors Loomis, Sayles & Company, L.P. (“Loomis Sayles”)(2) Boston, Massachusetts IA Clarington Investments Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. (2) It may be difficult to enforce any legal rights against a non-Canadian subadvisor because it is a foreign company and its assets are located outside Canada. What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide a consistent stream of income and capital appreciation by investing primarily in equity securities, fixed income investments and money market instruments from around the world. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies Loomis Sayles determines the relative attractiveness of global equities, North American fixed income securities and international fixed income securities based on fundamental factors such as the economic cycle, relative interest rates and stock market values and currency considerations. In deciding which equity securities to buy and sell, Loomis Sayles generally looks to purchase quality companies at attractive valuations with the potential to grow intrinsic value over time. The sub-advisor uses discounted cash flow analysis, among other methods of analysis, to determine a company’s intrinsic value. In deciding which fixed income securities to buy and sell, Loomis Sayles generally looks for securities it believes are undervalued and have the potential for credit upgrades, which may include securities that are below investment grade, including but not limited to high yield bonds. The Fund: will invest primarily in equity and fixed income securities of global issuers, including securities of issuers located in countries with emerging securities markets, may invest the equity portion of its portfolio in common shares, preferred shares, depository receipts, warrants, securities convertible into common or preferred shares, real estate investment trusts (REITs) and other equity securities deemed appropriate, may invest the fixed income portion of its portfolio in: (i) investment grade and non-investment grade debt securities issued by corporations, governments and government-related entities, supranational agencies, and by other organizations such as partnerships and trusts. These obligations may be issued in foreign currencies at fixed, variable, adjustable or zero coupon rates, and may be convertible into equity securities, (ii) other instruments such as preferred shares, asset-backed or mortgage-backed securities, senior loans, and other fixed income securities in Canada, the U.S. and elsewhere, (iii) bonds that are not rated by any designated rating organization; if a credit rating is unavailable, the portfolio manager will evaluate the investment on its merits, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, 228 IA Clarington Global Tactical Income Fund (continued) may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund's investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending, repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk capital depletion risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk ETF risk foreign investment risk government securities risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk tax risk 229 IA Clarington Global Tactical Income Fund (continued) You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, Industrial Alliance held, on behalf of other investors, 30.92% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking a flow of income and the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, E, F, FE, L and P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E6, Series F6, Series F8, Series FE6, Series L6, Series L8, Series P6, Series T6 and Series T8 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% (for Series E6, Series F6, Series FE6, Series L6, Series P6 and Series T6 units), or between approximately 7% and 9% (for Series F8, Series L8 and Series T8 units), of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% (for Series E6, Series F6, Series FE6, Series L6, Series P6 and Series T6 units), and approximately one-twelfth of 8% (for Series F8, Series L8 and Series T8 units) of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series F6 unit, $0.021 per Series F8 unit, $0.040 per Series L6 unit, $0.015 per Series L8 unit, $0.050 per Series E6, Series FE6 and Series P6 units, $0.040 per Series T6 unit and $0.015 per Series T8 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series I and Series O units, the Fund will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.63 3 years $80.80 5 years $141.62 10 years $322.37 Series E expenses payable over: 1 year $22.84 3 years $72.00 5 years $126.21 10 years $287.29 230 IA Clarington Global Tactical Income Fund (continued) Series E6 expenses payable over: 1 year $23.56 3 years $74.26 5 years $130.16 10 years $296.28 Series F expenses payable over: 1 year $12.25 3 years $38.62 5 years $67.69 10 years $154.08 Series F6 expenses payable over: 1 year $12.59 3 years $39.69 5 years $69.57 10 years $158.36 Series F8 expenses payable over: 1 year $12.35 3 years $38.94 5 years $38.26 10 years $155.38 Series FE expenses payable over: 1 year $11.50 3 years $36.25 5 years $63.53 10 years $144.62 Series FE6 expenses payable over: 1 year $11.86 3 years $37.40 5 years $65.55 10 years $149.20 Series L expenses payable over: 1 year $26.18 3 years $82.54 5 years $144.67 10 years $329.30 Series L6 expenses payable over: 1 year $26.63 3 years $83.94 5 years $147.13 10 years $334.92 Series L8 expenses payable over: 1 year $27.20 3 years $85.74 5 years $150.28 10 years $342.08 Series O expenses payable over: 1 year $0.94 3 years $2.96 5 years $5.19 10 years $11.81 Series P expenses payable over: 1 year $2.30 3 years $7.26 5 years $12.73 10 years $28.98 Series P6 expenses payable over: 1 year $2.44 3 years $7.69 5 years $13.47 10 years $30.67 Series T6 expenses payable over: 1 year $26.70 3 years $84.16 5 years $147.51 10 years $335.78 Series T8 expenses payable over: 1 year $26.68 3 years $84.12 5 years $147.44 10 years $335.62 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 231 IA Clarington Global Tactical Income Class Fund Details Type of Fund Diversified Income Securities Offered Series A, Series F, Series F6, Series F8, Series L, Series L6, Series L8, Series T6 and Series T8 shares of a mutual fund corporation* Start Date Series A: July 19, 2010 Series F: July 19, 2010 Series F6: July 19, 2010 Series F8: July 19, 2010 Series L: February 28, 2011 Series L6: February 28, 2011 Series L8: February 28, 2011 Series T6: July 19, 2010 Series T8: July 19, 2010 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series F: 0.95% Series F6: 0.95% Series F8: 0.95% Series L: 2.00% Series L6: 2.00% Series L8: 2.00% Series T6: 2.00% Series T8: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Loomis, Sayles & Company, L.P. (1) Boston, Massachusetts IA Clarington Investments Inc. Toronto, Ontario *This Fund is closed to new investors and to purchases and switches under pre-existing PAC Plans or other systematic plans. IA Clarington may reopen the Fund in its discretion. (2) It may be difficult to enforce any legal rights against a non-Canadian subadvisor because it is a foreign company and its assets are located outside Canada. What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide a return that is similar to the return of a global neutral balanced mutual fund. The Fund invests primarily, directly or indirectly, in securities held by a global neutral balanced mutual fund managed by IA Clarington, or an affiliate or associate of IA Clarington, and may invest all or a portion of its portfolio in Securities of the Reference Fund. 232 IA Clarington Global Tactical Income Class (continued) The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Global Tactical Income Fund, which we refer to as the “Reference Fund”. The investment strategies of the Reference Fund are set out on page 227 of this document. The Fund will hold cash or cash equivalents while the investment in units of the Reference Fund is pending or in order to facilitate redemptions. may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk, fund of funds risk and tracking risk, as well as to risks relating to the Reference Fund. The risks of the Reference Fund are: capital depletion risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk ETF risk foreign investment risk government securities risk income trust risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk tax series 233 IA Clarington Global Tactical Income Class (continued) You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 98.22% of its net assets in units of IA Clarington Global Tactical Income Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking a flow of income and the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. IA Clarington Global Tactical Income Class may be less appropriate for investments made through a registered plan than IA Clarington Global Tactical Income Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. For Series A, F and L shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series F6, Series F8, Series L6, Series L8, Series T6 and Series T8 shares, CSFI will make a monthly dividend payment of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 5% and 7% (for Series F6, Series L6 and Series T6 shares), or between approximately 7% and 9% (for Series F8, Series L8 and Series T8 shares), of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 6% (for Series F6, Series L6 and Series T6 shares), and approximately one-twelfth of 8% (for Series F8, Series L8 and Series T8 shares) of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.042 per Series F6 share, $0.056 per Series F8 share, $0.043 per Series L6 share, $0.045 per Series L8 share, $0.043 per Series T6 share and $0.046 per Series T8 share, which rates will remain in effect until adjusted in accordance with this distribution policy Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $27.35 3 years $86.22 5 years $151.12 10 years $343.99 Series F expenses payable over: 1 year $12.64 3 years $39.85 5 years $69.85 10 years $159.01 234 IA Clarington Global Tactical Income Class (continued) Series F6 expenses payable over: 1 year $12.77 3 years $40.27 5 years $70.58 10 years $160.66 Series F8 expenses payable over: 1 year $12.89 3 years $40.63 5 years $71.21 10 years $162.11 Series L expenses payable over: 1 year $27.84 3 years $87.78 5 years $153.86 10 years $350.22 Series L6 expenses payable over: 1 year $25.57 3 years $80.61 5 years $141.30 10 years $321.63 Series L8 expenses payable over: 1 year $27.83 3 years $87.74 5 years $153.78 10 years $350.05 Series T6 expenses payable over: 1 year $27.30 3 years $86.08 5 years $150.87 10 years $343.43 Series T8 expenses payable over: 1 year $27.61 3 years $87.04 5 years $152.55 10 years $347.26 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 235 IA Clarington Strategic U.S. Growth & Income Fund Fund Details Type of Fund U.S. Balanced Securities Offered Series A, Series E, Series E6, Series F, Series F6, Series FE, Series FE6, Series I, Series L, Series L6, Series L8, Series O, Series P, Series P6, Series T6 and Series T8 units of a mutual fund trust Start Date Series A: October 3, 2013 Series E: November 3, 2014 Series E6: November 3, 2014 Series F: October 3, 2013 Series F6: October 3, 2013 Series FE: June 25, 2015 Series FE6: June 25, 2015 Series I: July 4, 2008 Series L: February 5, 2014 Series L6: February 5, 2014 Series L8: February 5, 2014 Series O: July 19, 2010 Series P: November 3, 2014 Series P6: November 3, 2014 Series T6: August 26, 2005 Series T8: October 3, 2013 Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E: 1.75% Series E6: 1.75% Series F: 0.95% Series F6: 0.95% Series FE: 0.75% Series FE6: 0.75% Series I: negotiated and paid by each Series I investor Series L: 1.95% Series L6: 1.95% Series L8: 1.95% Series O: negotiated and paid by each Series O investor Series P: 0.75(1) Series P6: 0.75(1) Series T6: 1.95% Series T8: 1.95% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor IA Clarington Investments Inc. 236 IA Clarington Strategic U.S. Growth & Income Fund (continued) Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to seek to provide a consistent stream of income and capital appreciation by investing primarily in U.S. equity and fixed income securities. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: invests in dividend paying common shares, preferred shares, convertible preferred shares and other equity securities deemed appropriate, primarily domiciled in the U.S., doing business in the U.S. or listed on U.S.-based markets, will also invest in fixed income securities including bonds, debentures, notes and other obligations whether secured or unsecured, convertible or not, issued or guaranteed by U.S. federal or state governments, international or supranational governments, agencies or corporations. Generally, investments in corporate bonds are expected to have a weighted credit rating in the range of “B-” to “BBB+”, may allocate its assets between equity and fixed income securities as determined by the portfolio manager on the basis of general market or economic conditions. The allocation will be generally weighted 75% to either equities or fixed income, may also hold senior loans, floating rate debt instruments, asset-backed and mortgage-backed securities, may invest in non-U.S. securities, generally less than one-third of the portfolio value, may invest in income trust units and real estate investment trusts (REITs), may engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see discussion under “Short Selling Risk” on page 11, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are the same as the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, 237 IA Clarington Strategic U.S. Growth & Income Fund (continued) may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk credit risk currency risk default risk derivatives risk equity market risk ETF risk floating rate loan liquidity risk foreign investment risk government securities risk income trust risk interest rate risk 238 IA Clarington Strategic U.S. Growth & Income Fund (continued) large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, Industrial Alliance, on behalf of other investors, held 10.92% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking income and the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, Series E, Series F, Series FE, Series I, Series L, Series O and Series P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. Series E6, Series F6, Series FE6, Series L6, Series L8, Series P6, Series T6 and Series T8 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% (for Series E6, Series F6, Series FE6, Series L6, Series P6 and Series T6 units), or between approximately 7% and 9% (for Series L8 and T8 units), of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% (for Series E6, Series F6, Series FE6, Series L6, Series P6 and Series T6 units), and approximately onetwelfth of 8% (for Series L8 and T8 units) of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.050 per Series E6, Series F6, Series FE6, Series L6 and Series P6 unit, $0.037 per Series T6 unit, $0.059 per Series L8 unit and $0.041 per Series T8 unit, which rates will remain in effect until further adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual 239 IA Clarington Strategic U.S. Growth & Income Fund (continued) performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.30 3 years $79.76 5 years $139.81 10 years $318.25 Series E expenses payable over: 1 year $22.50 3 years $70.93 5 years $124.32 10 years $282.99 Series E6 expenses payable over: 1 year $23.17 3 years $73.04 5 years $128.02 10 years $291.40 Series F expenses payable over: 1 year $12.86 3 years $40.54 5 years $71.05 10 years $161.74 Series F6 expenses payable over: 1 year $12.91 3 years $40.70 5 years $71.33 10 years $162.38 Series FE expenses payable over: 1 year $11.30 3 years $35.63 5 years $62.45 10 years $142.14 Series FE6 expenses payable over: 1 year $11.17 3 years $35.20 5 years $61.70 10 years $140.44 Series L expenses payable over: 1 year $25.50 3 years $80.38 5 years $140.89 10 years $320.70 Series L6 expenses payable over: 1 year $25.55 3 years $80.53 5 years $141.16 10 years $321.31 Series L8 expenses payable over: 1 year $25.85 3 years $81.48 5 years $142.81 10 years $325.08 Series O expenses payable over: 1 year $0.89 3 years $2.79 5 years $4.89 10 years $11.14 Series P expenses payable over: 1 year $2.39 3 years $7.53 5 years $13.20 10 years $30.05 Series P6 expenses payable over: 1 year $2.69 3 years $8.49 5 years $14.89 10 years $33.89 Series T6 expenses payable over: 1 year $25.28 3 years $79.71 5 years $139.71 10 years $318.01 Series T8 expenses payable over: 1 year $25.29 3 years $79.72 5 years $139.72 10 years $318.05 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 240 IA Clarington Global Equity Fund Fund Details Type of Fund Global Equity Securities Offered Series A, Series E, Series F, Series F6, Series FE, Series I, Series L, Series L6, Series O, Series P, Series T6 and Series T8 units of a mutual fund trust Start Date Series A: August 12, 2014 Series E: November 3, 2014 Series F: August 12, 2014 Series F6: November 1, 2006 Series FE: June 25, 2015 Series I: November 1, 2006 Series L: August 12, 2014 Series L6: August 12, 2014 Series O: July 19, 2010 Series P: November 3, 2014 Series T6: November 1, 2006 Series T8: November 15, 2007 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.90% Series F: 1.00% Series F6: 1.00% Series FE: 0.90% Series I: negotiated and paid by each Series I investor Series L: 2.00% Series L6: 2.00% Series O: negotiated and paid by each Series O investor Series P: 0.90%(1) Series T6: 2.00% Series T8: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor QV Investors Inc. Calgary, Alberta (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide a combination of income and long-term capital growth through investment in a portfolio consisting primarily of equity securities of businesses located around the world. 241 IA Clarington Global Equity Fund (continued) The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: invests primarily in companies with a proven track record and superior financial quality with an ability to pay dividends, and potentially increase its dividend payments, employs a “bottom-up” investment process and assesses the inherent ability of a company to earn a sustainable return, includes a top-down analysis giving consideration to the overall factors influencing the global outlook and value for the businesses the Fund invests in invests in a diversified portfolio of large foreign or domestic companies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund's investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may use derivatives such as options, futures, forward contracts and swaps for hedging purposes only. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Please see the discussion under “Derivatives Risk” on page 7 for more details, and may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk currency risk derivatives risk equity market risk ETF risk foreign investment risk interest rate risk 242 IA Clarington Global Equity Fund (continued) large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. Who Should Invest in this Fund? Investors: seeking dividend income and the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, E, F, FE, L and P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series F6, Series L6, Series T6 and Series T8 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% (for Series F6, Series L6 and Series T6 units), or between approximately 7% and 9% (for Series T8 units), of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% (for Series F6, L6 and T6 units), and approximately one-twelfth of 8% (for Series T8 units) of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.030 per Series F6 unit, $0.05 per Series L6 unit, $0.027 per Series T6 unit and $0.035 per Series T8 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series I and O units, the Fund will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $26.72 3 years $84.23 243 5 years $147.64 10 years $336.07 IA Clarington Global Equity Fund (continued) Series E expenses payable over: 1 year $24.73 3 years $77.95 5 years $136.63 10 years $311.01 Series F expenses payable over: 1 year $13.80 3 years $43.51 5 years $76.27 10 years $173.62 Series F6 expenses payable over: 1 year $13.69 3 years $43.17 5 years $75.66 10 years $172.23 Series FE expenses payable over: 1 year $13.69 3 years $43.17 5 years $75.66 10 years $172.22 Series L expenses payable over: 1 year $27.14 3 years $85.56 5 years $149.97 10 years $341.39 Series L6 expenses payable over: 1 year $27.02 3 years $85.17 5 years $149.29 10 years $339.83 Series O expenses payable over: 1 year $0.86 3 years $2.71 5 years $4.75 10 years $10.81 Series P expenses payable over: 1 year $2.93 3 years $9.23 5 years $16.17 10 years $36.81 Series T6 expenses payable over: 1 year $27.02 3 years $85.17 5 years $149.28 10 years $339.80 Series T8 expenses payable over: 1 year $27.26 3 years $85.95 5 years $150.65 10 years $342.92 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 244 IA Clarington Global Opportunities Fund Fund Details Type of Fund Global Equity Securities Offered Series A, Series E, Series F, Series I, Series L and Series O units of a mutual fund trust Start Date Series A: August 25, 1998 Series E: December 5, 2011(1) Series F: July 5, 2004(1) Series I: July 5, 2004 Series L: December 5, 2011 Series O: July 19, 2010 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.75% Series F: 0.85% Series I: negotiated and paid by each Series I investor Series L: 2.00% Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Radin Capital Partners Inc. Toronto, Ontario (1) Series E and Series F Securities are closed to new investors. Investors who currently hold these series may purchase additional Securities. IA Clarington may re-open these series to new investors in its discretion. What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve long term capital appreciation by investing primarily in equity securities of companies around the world. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: invests primarily in securities of issuers of any market capitalization, diversified across foreign countries and industries, may invest in any number of issuers located in one country or industry, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, 245 IA Clarington Global Opportunities Fund (continued) may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund's investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may, upon 60 days’ prior notice to Securityholders, engage in short selling. A “short-sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: concentration risk currency risk derivatives risk equity market risk ETF risk foreign investment risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk 246 IA Clarington Global Opportunities Fund (continued) smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, a mutual fund managed by us held 25.70% and Industrial Alliance held, on behalf of other investors, 11.43%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. The Fund will not pay a monthly distribution to any of its series. These series may pay an annual income or capital gain distribution in December of each year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $27.11 3 years $85.48 5 years $149.82 10 years $341.04 Series E expenses payable over: 1 year $21.16 3 years $66.70 5 years $116.91 10 years $266.11 Series F expenses payable over: 1 year $11.43 3 years $36.03 5 years $63.16 10 years $143.77 Series L expenses payable over: 1 year $26.67 3 years $84.06 5 years $147.35 10 years $335.40 Series O expenses payable over: 1 year $0.90 3 years $2.83 5 years $4.97 10 years $11.31 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 247 IA Clarington Global Opportunities Class Fund Details Type of Fund Global Equity Securities Offered Series A, Series E, Series EX, Series F, Series FE, Series L, Series P, Series T6 and Series T8 shares of a mutual fund corporation Start Date Series A: October 5, 2000 Series E: November 3, 2014 Series EX: December 5, 2011(1) Series F: July 6, 2005 Series FE: June 25, 2015 Series L: December 5, 2011 Series P: November 3, 2014 Series T6: June 20, 2016 Series T8: June 20, 2016 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E:1.90% Series EX: 1.75% Series F: 0.85% Series FE: 0.80% Series L: 2.00% Series P: 0.80%(2) Series T6: 2.00% Series T8: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Radin Capital Partners Inc. Toronto, Ontario (1) Effective October 24, 2014, all of the issued and outstanding Series E Securities were re-designated as Series EX Securities. Series EX Securities are closed to new investors. Investors who currently hold this series may purchase additional Securities. IA Clarington may re-open the series to new investors in its discretion. (2) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve long-term capital appreciation by investing primarily in equity securities of companies around the world. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. 248 IA Clarington Global Opportunities Class (continued) Investment Strategies The Fund invests substantially all of its assets in units of IA Clarington Global Opportunities Fund, which we refer to as the “ Reference Fund”. The investment strategies of the Reference Fund are set out on page 245 of this document. The Fund: will hold cash or cash equivalents only while the investment in units of the Reference Fund is pending or in order to facilitate redemptions, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The Fund is subject to corporate class risk and tracking risk, as well as to the risks relating to the Reference Fund. The risks of the Reference Fund are: concentration risk currency risk derivatives risk equity market risk ETF risk foreign investment risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. 249 IA Clarington Global Opportunities Class (continued) As permitted by its investment objectives, the Fund held up to 99.80% of its net assets in units of IA Clarington Global Opportunities Fund during the past year. This investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the long term. IA Clarington Global Opportunities Class may be less appropriate for investments made through a registered plan than IA Clarington Global Opportunities Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. For Series A, Series E, Series EX, Series F, Series FE, Series L and Series P shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series T6 and Series T8 shares, CSFI will make a monthly dividend of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 5% and 7% (for Series T6 shares), or between approximately 7% and 9% (for Series T8 shares), of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 6% (for Series T6 shares), and approximately one-twelfth of 8% (for Series T8 shares) of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.05 per Series T6 shares and $0.067 per Series T8 shares, which rates will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $27.49 3 years $86.65 5 years $151.88 10 years $345.72 Series E expenses payable over: 1 year $25.11 3 years $79.17 5 years $138.77 10 years $315.88 Series EX expenses payable over: 1 year $23.22 3 years $73.20 5 years $128.31 10 years $292.07 Series F expenses payable over: 1 year $13.64 3 years $43.00 5 years $75.37 10 years $171.56 Series FE expenses payable over: 1 year 3 years 5 years 10 years 250 IA Clarington Global Opportunities Class (continued) $12.42 $39.14 $68.61 $156.17 Series L expenses payable over: 1 year $28.47 3 years $89.74 5 years $157.30 10 years $358.06 Series P expenses payable over: 1 year $2.84 3 years $8.95 5 years $15.70 10 years $35.73 Series T6 expenses payable over: 1 year $28.22 3 years $88.96 5 years $155.93 10 years $354.93 Series T8 expenses payable over: 1 year $28.36 3 years $89.40 5 years $156.71 10 years $356.71 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 251 IA Clarington Global Value Fund Fund Details Type of Fund Global Equity Securities Offered Series A, Series E, Series F, Series F6, Series FE, Series I, Series L, Series L6, Series O, Series P and Series T6 units of a mutual fund trust Start Date Series A: January 4, 2000 Series E: November 3, 2014 Series F: January 15, 2007 Series F6: June 20, 2016 Series FE: June 25, 2015 Series I: March 11, 2001 Series L: June 20, 2016 Series L6: June 20, 2016 Series O: July 19, 2010 Series P: November 3, 2014 Series T6: June 20, 2016 Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E: 1.70% Series F: 0.85% Series F6: 0.85% Series FE: 0.70% Series I: negotiated and paid by each Series I investor Series L: 1.95% Series L6: 1.95% Series O: negotiated and paid by each Series O investor Series P: 0.70%(1) Series T6: 1.95% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve superior long-term capital appreciation consistent with the protection of the Fund’s capital. The Fund will invest primarily in a diversified portfolio of equity securities of large capitalization international corporations that are considered leaders in their respective industries and offer strong growth prospects. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: 252 IA Clarington Global Value Fund (continued) uses both top-down macro-economic analysis and fundamental bottom-up analysis, selects equity securities from issuers considered to be leaders in their respective industries that possess above average earnings growth and stability, financial strength, management quality and experience, as well as overall market share, screens the equity universe looking for stocks trading at attractive valuations, based on traditional valuation and growth metrics such as price/earnings, price/book and price/cash flow, amongst others, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: currency risk derivatives risk equity market risk ETF risk foreign investment risk large transaction risk liquidity risk 253 IA Clarington Global Value Fund (continued) repurchase and reverse repurchase transactions and securities lending risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, a mutual fund managed by us held 16.30% and Industrial Alliance held, on behalf of other investors, 63.61%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, Series E, Series F, Series FE, Series I, Series L, Series O and Series P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series F6, Series L6 and Series T6 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.050 per Series F6, Series L6 and Series T6 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series I and Series O units, the Fund will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $26.03 3 years $82.06 5 years $143.83 10 years $327.40 Series E expenses payable over: 1 year $23.41 3 years $73.80 5 years $129.36 10 years $294.45 Series F expenses payable over: 1 year $11.50 3 years $36.25 5 years $63.53 10 years $144.62 254 IA Clarington Global Value Fund (continued) Series F6 expenses payable over: 1 year $11.91 3 years $37.54 5 years $65.79 10 years $149.76 Series FE expenses payable over: 1 year $10.90 3 years $34.37 5 years $60.25 10 years $137.14 Series L expenses payable over: 1 year $26.12 3 years $82.35 5 years $144.34 10 years $328.55 Series L6 expenses payable over: 1 year $27.00 3 years $85.12 5 years $149.19 10 years $339.61 Series O expenses payable over: 1 year $0.93 3 years $2.92 5 years $5.12 10 years $11.65 Series P expenses payable over: 1 year $2.52 3 years $7.96 5 years $13.95 10 years $31.76 Series T6 expenses payable over: 1 year $27.00 3 years $85.12 5 years $149.19 10 years $339.61 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 255 IA Clarington Inhance Global Equity SRI Class Fund Details Type of Fund Global Equity Securities Offered Series A, Series E, Series F, Series FE, Series I, Series L and Series V shares of a mutual fund corporation Start Date Series A: November 30, 2009 Series E: June 20, 2016 Series F: November 30, 2009 Series FE: June 20, 2016 Series I: November 30, 2009 Series L: June 20, 2016 Series V: November 30, 2009 Eligible for Registered Plans Yes Management Fees Series A: 2.10% Series E: 2.05% Series F: 1.15% Series FE: 1.05% Series I: negotiated and paid by each Series I investor Series L: 2.10% Series V: negotiated and paid by the portfolio manager or each Series V investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Vancity Investment Management Limited Vancouver, British Columbia What Does the Fund Invest In? Investment Objectives The Fund’s objective is to achieve long term capital appreciation by investing primarily in equity securities of issuers located around the world which meet the sub-advisor’s socially responsible investment principles. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor selects investments by: using fundamental financial analysis to examine a company’s earnings, profitability growth, credit position, cash flow and long-term sustainability of the issuer’s business model, assessing an issuer’s performance respecting corporate governance, employee and community relations, and environmental management, and looking for securities that the sub-advisor feels are trading below their expected value and selling these securities when the price fully reflects that value. 256 IA Clarington Inhance Global Equity SRI Class (continued) The Fund: invests primarily in a broad selection of publicly traded common and preferred shares and convertible securities of issuers located around the world, invests in companies that demonstrate leadership with respect to progressive practices combined with a sound business model and reasonable valuations, holds a diversified portfolio of generally between 25 to 100 issuers of different market capitalizations, invests in accordance with the SRI principles by seeking companies with progressive social, environmental and governance practices such as: companies that derive most of their revenues from products, processes or services that have minimal negative impacts on consumers and local communities companies that work with their employees and communities where they operate. These companies pursue diversity among their management, have progressive employee and supplier relations and display competence in the management of human rights, and companies that have an understandable business model and demonstrate a competitive advantage, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: corporate class risk credit risk currency risk derivatives risk equity market risk 257 IA Clarington Inhance Global Equity SRI Class (continued) ETF risk foreign investment risk fund of funds risk interest rate risk large transaction risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, two mutual funds managed by us held 19.01% and 18.17%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $27.63 3 years $87.12 5 years $152.70 10 years $347.58 Series E expenses payable over: 1 year $25.28 3 years $79.71 5 years $139.71 10 years $318.01 258 IA Clarington Inhance Global Equity SRI Class (continued) Series F expenses payable over: 1 year $15.48 3 years $48.80 5 years $85.54 10 years $194.72 Series FE expenses payable over: 1 year $14.97 3 years $47.21 5 years $82.75 10 years $188.35 Series L expenses payable over: 1 year $29.49 3 years $92.98 5 years $162.97 10 years $370.96 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 259 IA Clarington Focused U.S. Equity Class Fund Details Type of Fund U.S. Equity Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series I, Series L, Series L5, Series O, Series P, Series P5 and Series T5 shares of a mutual fund corporation Start Date Series A: June 20, 2014 Series E: November 3, 2014 Series E5: November 3, 2014 Series F: June 20, 2014 Series F5: June 20, 2014 Series FE: June 25, 2015 Series FE5: June 25, 2015 Series I: June 20, 2014 Series L: June 20, 2014 Series L5: June 20, 2014 Series O: June 20, 2014 Series P: November 3, 2014 Series P5: November 3, 2014 Series T5: June 20, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E:1.80% Series E5: 1.80% Series F: 1.00% Series F5: 1.00% Series FE: 0.80% Series FE5: 0.80% Series I: negotiated and paid by each Series I investor Series L: 2.00% Series L5: 2.00% Series O: negotiated and paid by each Series O investor Series P: 0.80%(1) Series P5: 0.80%(1) Series T5: 2.00% This Fund also pays us a performance fee, capped at 1.85% per annum. This fee is charged in respect of, and allocated to, each series of Securities. See “Fees and expenses payable by the Funds – Performance Fees” on page ● for details. Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec 260 IA Clarington Focused U.S. Equity Class (continued) Sub-Advisor Taylor Asset Management Inc. Toronto, Ontario (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund seeks to achieve long-term capital growth by investing primarily in equity securities of U.S. companies. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will invest primarily in U.S. equity securities of any market capitalization that represent good value based on current stock prices relative to their intrinsic value, will utilize a fundamental, bottom-up security selection process emphasizing company specific analysis, may invest up to approximately 25% in non-U.S. equity securities, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details, and may engage in short selling. A “short-sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are 261 IA Clarington Focused U.S. Equity Class (continued) underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk corporate class risk currency risk derivatives risk equity market risk ETF risk foreign investment risk large transaction risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk smaller capitalization risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with exposure to U.S. equities, with medium risk tolerance, and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. 262 IA Clarington Focused U.S. Equity Class (continued) For Series A, E, F, FE, I, L, O and P shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 shares, CSFI will make a monthly dividend of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 4% and 6% of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 5% of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.042 per Series E5, Series F5, Series FE5, Series L5, Series P5 and Series T5 shares and will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.32 3 years $79.81 5 years $139.89 10 years $318.42 Series E expenses payable over: 1 year $22.81 3 years $71.91 5 years $126.04 10 years $286.89 Series E5 expenses payable over: 1 year $24.26 3 years $76.48 5 years $134.05 10 years $305.14 Series F expenses payable over: 1 year $13.01 3 years $41.01 5 years $71.88 10 years $163.61 Series F5 expenses payable over: 1 year $12.95 3 years $40.82 5 years $71.54 10 years $162.85 Series FE expenses payable over: 1 year $11.67 3 years $36.80 5 years $64.50 10 years $146.83 Series FE5 expenses payable over: 1 year $11.43 3 years $36.04 5 years $63.17 10 years $143.79 Series L expenses payable over: 1 year $26.27 3 years $82.82 5 years $145.17 10 years $330.44 Series L5 expenses payable over: 1 year $26.39 3 years $83.19 5 years $145.82 10 years $331.93 Series O expenses payable over: 1 year $0.94 3 years $2.97 5 years $5.21 10 years $11.86 Series P expenses payable over: 1 year $2.38 3 years $7.52 5 years $13.18 10 years $29.99 Series P5 expenses payable over: 1 year $2.48 3 years $7.81 5 years $13.69 10 years $31.16 263 IA Clarington Focused U.S. Equity Class (continued) Series T5 expenses payable over: 1 year $24.76 3 years $78.05 5 years $136.80 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 264 10 years $311.40 IA Clarington Sarbit Activist Opportunities Class Fund Details Type of Fund U.S. Equity Securities Offered Series A, Series E, Series F, Series FE, Series I and Series P shares of a mutual fund corporation Start Date Series A: March 18, 2013 Series E: March 18, 2013 Series F: March 18, 2013 Series FE: June 25, 2015 Series I: March 18, 2013 Series P: November 3, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series E: 1.75% Series F: 1.00% Series FE: 0.75% Series I: negotiated and paid by each Series I investor Series P: 0.75%(1) The Fund also pays us a performance fee, capped at 1.85% per annum. This fee is charged in respect of, and allocated to, each series of Securities other than Series I. See “Fees and Expenses Payable by the Funds – Performance Fees” on page 29 for details. Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Sarbit Advisory Services Inc. Winnipeg, Manitoba (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objectives The fund pursues long term capital growth through investing primarily in equity securities of issuers that have registered a class of voting securities in the United States and in which an activist investor may seek to change or influence management or control. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies Investor activism is a type of investing in which a shareholder of a publicly-traded company attempts to use his or her rights as a shareholder to bring about change to the company’s policies or strategic direction. We refer to such a shareholder as an activist investor, who can also be part of management of the company. The goals of an activist investor range from financial (increase of shareholder value through changes in corporate policy, 265 IA Clarington Sarbit Activist Opportunities Class (continued) financing structure, management or board membership) to non-financial (disinvestment from particular countries or environmental policies). The sub-advisor: will generally seek to invest in companies where an activist investor has disclosed, either publicly or through a 13D filing, an intention to seek to change or influence the management or control of a company. An activist investor files a schedule 13D pursuant to section 13 of the U.S. Securities Exchange Act of 1934 when it acquires over 5% of a company’s common stock and intends to influence the management of the company, will generally invest in companies that it believes, based on fundamental bottom-up analysis, have significant possibilities for capital appreciation over the longer term, may also invest in companies which have publicly disclosed considering a significant strategic change including, but not limited to, declaring special dividends, initiating a significant share buyback, spinoff, or the sale of a segment of its business, and may also invest in companies where significant trading activity by management and other insiders of the company has been publicly disclosed. The Fund: will primarily invest in equity securities but may also invest in fixed income securities, preferred shares, convertible securities or options or warrants to acquire equity or such other securities, may hold a significant portion of its assets in cash, as well as in government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, will not actively seek to influence the management or control of the companies in which it invests, but may vote for or against proposals by activist investors or management. Please see discussion under “Activist Investor Risk” on page 6, may use derivatives such as options, forwards and futures for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may, upon 60 days’ prior notice to Securityholders, engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that 266 IA Clarington Sarbit Activist Opportunities Class (continued) are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11, and may invest up to 100% of its assets in foreign securities. What are the Risks of Investing in this Fund? The risks of investing in the Fund are: activist investor risk concentration risk corporate class risk currency risk derivatives risk equity market risk ETF risk foreign investment risk large transaction risk repurchase and reverse repurchase risk and securities lending risk series risk smaller capitalization risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 11.13% of its net assets in units of Liberty Interactive Corporation, up to 12.81% of its net assets in Liberty Media Corporation, up to 24.42% of its net assets of Lions Gate Entertainment Corporation and up to 10.32% of is net assets of Monitise PLC during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium to high risk tolerance, and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. 267 IA Clarington Sarbit Activist Opportunities Class (continued) Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $25.58 3 years $80.65 5 years $141.35 10 years $321.76 Series E expenses payable over: 1 year $23.30 3 years $73.47 5 years $128.77 10 years $293.12 Series F expenses payable over: 1 year $13.20 3 years $41.63 5 years $72.96 10 years $166.08 Series FE expenses payable over: 1 year $10.93 3 years $34.45 5 years $60.39 10 years $137.47 Series P expenses payable over: 1 year $2.81 3 years $8.86 5 years $15.54 10 years $35.37 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 268 IA Clarington Sarbit U.S. Equity Fund Fund Details Type of Fund U.S. Equity Securities Offered Series A, Series E, Series F, Series F6, Series FE, Series I, Series L, Series L6, Series O, Series P and Series T6 units of a mutual fund trust Start Date Series A: January 25, 2000 Series E: November 3, 2014 Series F: July 5, 2004 Series F6: June 1, 2009 Series FE: June 25, 2015 Series I: July 5, 2004 Series L: February 28, 2011 Series L6: February 28, 2011 Series O: July 19, 2010 Series P: November 3, 2014 Series T6: June 1, 2009 Eligible for Registered Plans Yes Management Fees Series A: 2.20% Series E: 1.95% Series F: 1.05% Series F6: 1.05% Series FE: 0.95% Series I: negotiated and paid by each Series I investor Series L: 2.20% Series L6: 2.20% Series O: negotiated and paid by each Series O investor Series P: 0.95%(1) Series T6: 2.20% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Sarbit Advisory Services Inc. Winnipeg, Manitoba (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to obtain capital preservation and appreciation by investing primarily in U.S. equities. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. 269 IA Clarington Sarbit U.S. Equity Fund (continued) Investment Strategies The Fund: endeavours to invest in quality businesses, will invest in a select number of publicly traded equity securities, mainly common shares of various U.S. companies, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may hold a significant portion of its assets in cash, as well as in government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions. Cash may comprise the majority of the portfolio at times should the sub-advisor view opportunities to invest as unavailable or unacceptably risky, generally invests for the longer term, rather than taking short-term positions in securities, hedges against changes in currency exchange rates, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may, upon 60 days’ prior notice to Securityholders, engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the 270 IA Clarington Sarbit U.S. Equity Fund (continued) ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk currency risk derivatives risk equity market risk ETF risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk smaller capitalization risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, Industrial Alliance, on behalf of other investors, held 13.77% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. As permitted by its investment objectives, the Fund held up to 10.32% of its net assets in Berkshire Hathaway Inc., up to 10.79% of its net assets in Deutsche Telekom AG, up to 11.18% of its net assets in Liberty Media Corporation and up to 11.83% of its net assets in Lions Gate Entertainment Corporation during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with exposure to U.S. equities, with medium risk tolerance, planning to invest over the long term, and The Fund may be more appropriate for investors who are are comfortable with the sub-advisor’s philosophy of holding high levels of cash. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. 271 IA Clarington Sarbit U.S. Equity Fund (continued) Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, Series E, Series F, Series FE, Series I, Series L, Series O and Series P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series F6, Series L6 and Series T6 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.082 per Series F6 unit and $0.066 per Series L6 and Series T6 unit and will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $28.10 3 years $88.59 5 years $155.27 10 years $353.45 Series E expenses payable over: 1 year $23.59 3 years $74.37 5 years $130.35 10 years $296.72 Series F expenses payable over: 1 year $13.14 3 years $41.41 5 years $72.59 10 years $165.23 Series F6 expenses payable over: 1 year $13.62 3 years $42.93 5 years $75.25 10 years $171.29 Series FE expenses payable over: 1 year $12.70 3 years $40.05 5 years $70.20 10 years $159.79 Series L expenses payable over: 1 year $28.86 3 years $90.97 5 years $159.44 10 years $362.94 Series L6 expenses payable over: 1 year $29.32 3 years $92.44 5 years $162.03 10 years $368.82 Series O expenses payable over: 1 year $0.92 3 years $2.90 5 years $5.09 10 years $11.58 Series P expenses payable over: 1 year $1.87 3 years $5.89 5 years $10.33 10 years $23.51 Series T6 expenses payable over: 1 year $28.85 3 years $90.95 5 years $159.42 10 years $362.88 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 272 IA Clarington Sarbit U.S. Equity Class (Unhedged) Fund Details Type of Fund U.S. Equity Securities Offered Series A, Series E, Series F, Series F6, Series FE, Series L, Series L6, Series P and Series T6 shares of a mutual fund corporation Start Date Series A: July 18, 2011 Series E: July 18, 2011 Series F: July 18, 2011 Series F6: July 18, 2011 Series FE: June 25, 2015 Series L: July 18, 2011 Series L6: July 18, 2011 Series P: November 3, 2014 Series T6: July 18, 2011 Eligible for Registered Plans Yes Management Fees Series A: 2.20% Series E: 1.95% Series F: 1.05% Series F6: 1.05% Series FE: 0.95% Series L: 2.20% Series L6: 2.20% Series P: 0.95%(1) Series T6: 2.20% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Sarbit Advisory Services Inc. Winnipeg, Manitoba (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to obtain capital preservation and appreciation by investing primarily in U.S. equities. It may invest in those securities either directly or by investing in securities of another mutual fund that invests in those securities. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: endeavours to invest in quality businesses, 273 IA Clarington Sarbit U.S. Equity Class (Unhedged) (continued) will invest in a select number of publicly traded equity securities, mainly common shares of various U.S. companies, may hold a significant portion of its assets in cash, as well as in government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions. Cash may comprise the majority of the portfolio at times should the sub-advisor view opportunities to invest as unavailable or unacceptably risky, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund's investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, does not hedge against changes in currency exchange rates, is not expected to have an active portfolio turnover rate, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, may, upon 60 days’ prior notice to Securityholders, engage in short selling. A “short sale” is where a mutual fund borrows securities from a lender and sells those securities in the open market. Where a fund sells securities short, it will generally see a profit if the securities decrease in value and a loss if they increase in value. The sub-advisor may sell short up to 20% of the net portfolio in securities which the sub-advisor believes are overpriced. This is balanced by the sub-advisor investing up to 70% of the net portfolio in long positions in what it believes are underpriced securities, resulting in a net 100% long exposure when “cash cover” (cash, cash equivalents and other similar assets specified in NI 81-102 that are held in connection with the short sale) is taken into account. Please see the discussion under “Short Selling Risk” on page 11, and may use derivatives such as options, futures, forward contracts and swaps for hedging purposes only. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund will generally not hedge its foreign currency exposure. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the 274 IA Clarington Sarbit U.S. Equity Class (Unhedged) (continued) ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk corporate class risk currency risk derivatives risk equity market risk ETF risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk smaller capitalization risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 10.68% of its net assets in Berkshire Hathaway Inc., up to 10.38% of its net assets in Deutsche Telekom AG, up to 10.36% of its net assets in Liberty Media Corporation and up to 11.88% of its net assets in Lions Gate Entertainment Corporation during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with exposure to U.S. equities, with medium risk tolerance, and planning to invest over the long term. The Fund may be more appropriate for investors who are are comfortable with the sub-advisor’s philosophy of holding high levels of cash. IA Clarington Sarbit U.S. Equity Class (Unhedged) may be less appropriate for investments made through a registered plan than IA Clarington Sarbit U.S. Equity Fund. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. 275 IA Clarington Sarbit U.S. Equity Class (Unhedged) (continued) Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series L and Series P shares, CSFI will not pay a monthly dividend. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. For Series F6, Series L6 and Series T6 shares, CSFI will make a monthly dividend payment of a fixed dollar amount per share determined for each such series in January of each year. If the annualized monthly dividend per share of the series at that time is between approximately 5% and 7% of the NAV per share of the series as of December 31 of the previous year, the monthly dividend per share will not change. If the annualized monthly dividend per share of the series is outside that range, the monthly dividend amount will be adjusted to be approximately one-twelfth of 6% of the NAV per share of the series as of December 31 of the previous year. The current monthly dividend rate is $0.083 for Series F6 share and $0.065 per Series L6 and Series T6 shares, which rates will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $28.89 3 years $91.08 5 years $159.64 10 years $363.38 Series E expenses payable over: 1 year $24.52 3 years $77.31 5 years $135.51 10 years $308.46 Series F expenses payable over: 1 year $13.81 3 years $43.52 5 years $76.29 10 years $173.65 Series F6 expenses payable over: 1 year $13.46 3 years $42.42 5 years $74.35 10 years $169.24 Series FE expenses payable over: 1 year $13.20 3 years $41.60 5 years $72.91 10 years $165.97 Series L expenses payable over: 1 year $30.13 3 years $95.00 5 years $166.51 10 years $379.03 Series L6 expenses payable over: 1 year $28.65 3 years $90.21 5 years $158.30 10 years $360.34 Series P expenses payable over: 1 year $1.85 3 years $5.82 5 years $10.20 10 years $23.22 Series T6 expenses payable over: 1 year $29.99 3 years $94.55 5 years $165.72 10 years $377.22 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 276 IA Clarington U.S. Dividend Growth Fund Fund Details Type of Fund U.S. Equity Securities Offered Series A, Series E, Series F, Series F6, Series FE, Series I, Series L, Series L6, Series O, Series P and Series T6 units of a mutual fund trust Start Date Series A: January 4, 2000 Series E: November 3, 2014 Series F: November 3, 2008 Series F6: June 25, 2015 Series FE: June 25, 2015 Series I: January 24, 2001 Series L: June 25, 2015 Series L6: June 25, 2015 Series O: July 19, 2010 Series P: November 3, 2014 Series T6: June 25, 2015 Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E:1.70% Series F: 0.85% Series F6: 0.85% Series FE: 0.70% Series I: negotiated and paid by each Series I investor Series O: negotiated and paid by each Series O investor Series L: 1.95% Series L6: 1.95% Series P: 0.70%(1) Series T6: 1.95% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec (1) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details. What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve superior long-term capital appreciation consistent with the protection of the Fund’s capital. The Fund will invest primarily in a diversified portfolio of equity securities of large capitalization U.S. corporations, which, in the opinion of the portfolio manager, offer above average growth prospects. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. 277 IA Clarington U.S. Dividend Growth Fund (continued) Investment Strategies The Fund: invests primarily in U.S. equity securities that the portfolio manager believes will provide long-term capital appreciation and total return with a focus on dividend growth, seeks diversification through investment in equity securities of companies in various industries, may employ a covered call strategy on a portion of the Fund’s portfolio, generally targeting no more than one-half of the portfolio. A covered call strategy involves the Fund purchasing a stock and then selling a call option on that stock. The Fund earns a premium on the call option, but the call option limits the Fund’s ability to participate in any increase in value of the stock above the strike price of the call option. Generally, the Portfolio Manager will write call options on stocks in situations where it believes that the premium that the Fund will earn on the option is attractive relative to the prospect of the stock increasing in value above the strike prices over the life of the option, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk 278 IA Clarington U.S. Dividend Growth Fund (continued) currency risk derivatives risk equity market risk ETF risk foreign investment risk large transaction risk repurchase and reverse repurchase transactions and securities lending risk series risk tax risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, Industrial Alliance, on behalf of other investors, held 60.91% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. Series A, Series E, Series F, Series FE, Series L and Series P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series F6, Series L6 and Series T6 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined for each such series in January of each year. If the annualized monthly distribution per unit of the series at that time is between approximately 5% and 7% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 6% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.050 per Series F6, Series L6 and Series T6 unit, which rates will remain in effect until adjusted in accordance with this distribution policy. For Series I and Series O units, the Fund will undertake to pay a monthly distribution. This distribution is reviewed periodically. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual 279 IA Clarington U.S. Dividend Growth Fund (continued) performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $26.27 3 years $82.80 5 years $145.13 10 years $330.37 Series E expenses payable over: 1 year $22.58 3 years $71.19 5 years $124.77 10 years $284.02 Series F expenses payable over: 1 year $11.30 3 years $35.61 5 years $62.43 10 years $142.10 Series F6 expenses payable over: 1 year $11.41 3 years $35.98 5 years $63.07 10 years $143.57 Series FE expenses payable over: 1 year $10.63 3 years $33.50 5 years $58.71 10 years $133.65 Series L expenses payable over: 1 year $26.82 3 years $84.55 5 years $148.20 10 years $337.35 Series L6 expenses payable over: 1 year $27.04 3 years $85.24 5 years $149.41 10 years $340.11 Series O expenses payable over: 1 year $0.90 3 years $2.85 5 years $5.00 10 years $11.37 Series P expenses payable over: 1 year $2.42 3 years $7.62 5 years $13.36 10 years $30.41 Series T6 expenses payable over: 1 year $26.55 3 years $83.71 5 years $146.73 10 years $333.99 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 280 IA Clarington U.S. Dividend Growth Registered Fund Fund Details Type of Fund U.S. Equity Securities Offered(1) Series A, Series E, Series F, Series FE, Series L and Series P units of a mutual fund trust Start Date December 29, 2015 Eligible for Registered Plans Yes Management Fees Series A: 1.95% Series E:1.70% Series F: 0.85% Series FE: 0.70% Series L: 1.95% Series P: 0.70%(2) Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec (1) May only be purchased by Qualified Investors. (2) A lower management fee rate may be applicable depending on the amount of your investment. Please speak with your representative for more details What Does the Fund Invest In? Investment Objective The Fund’s objective is to achieve superior long-term capital appreciation consistent with the protection of the Fund’s capital. The Fund will invest primarily in a diversified portfolio of equity securities of large capitalization U.S. corporations, which, in the opinion of the portfolio manager, offer above average growth prospects. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: invests primarily in U.S. equity securities that the portfolio manager believes will provide long-term capital appreciation and total return with a focus on dividend growth, seeks diversification through investment in equity securities of companies in various industries, may employ a covered call strategy on a portion of the Fund’s portfolio, generally targeting no more than one-half of the portfolio. A covered call strategy involves the Fund purchasing a stock and then selling a call option on that stock. The Fund earns a premium on the call option, but the call option limits the Fund’s ability to participate in any increase in value of the stock above the strike price of the call option. Generally, the Portfolio Manager will write call options on stocks in situations where it believes that the premium that the Fund will earn on the option is attractive relative to the prospect of the stock increasing in value above the strike prices over the life of the option, 281 IA Clarington U.S. Dividend Growth Registered Fund (continued) may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may from time to time invest a portion of its net assets (generally no more than 30%) in units or shares of other investment funds that may be managed by IA Clarington or an affiliate. The criteria used for selecting mutual fund securities are consistent with the criteria for selecting individual securities, as described elsewhere in the Fund’s investment objectives and strategies. There will be no duplication of management fees, incentive fees or sales charges between the mutual funds, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may enter into securities lending transactions and may, after giving investors 60 days’ prior written notice, enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a further description of securities lending transactions, repurchase and reverse repurchase transactions, and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: capital depletion risk concentration risk currency risk derivatives risk equity market risk ETF risk foreign investment risk large transaction risk repurchase and reverse repurchase transactions and securities lending risk series risk tax risk 282 IA Clarington U.S. Dividend Growth Registered Fund (continued) You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. Who Should Invest in this Fund? Qualified Investors: holding their investment in a qualified registered plan (see below), seeking the possibility of capital appreciation, with medium risk tolerance, and planning to invest over the long term. Investors may only hold Securities of this Fund within a Qualified Account as defined on page 2. If an investor holds Securities of this Fund in an account that we determine not to be a Qualified Account, we will switch those Securities into Securities of IA Clarington U.S. Dividend Growth Fund. If, for any reason, we cannot switch an investor’s securities into Securities of IA Clarington U.S. Dividend Growth Fund, we will redeem those securities which may have tax implications. We may from time to time request confirmation that any account in which an investor holds Securities of this Fund is a Qualified Account. IA Clarington will take all reasonable steps to detect and reject orders from investors not investing through a Qualified Account. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 45 for more details of the Fund’s distribution policy. Series A, Series E, Series F, Series FE, Series L and Series P units will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $27.04 3 years $85.23 5 years $149.39 10 years $340.05 Series E expenses payable over: 1 year $23.00 3 years $72.50 5 years $127.08 10 years $289.28 Series F expenses payable over: 1 year $11.91 3 years $37.54 5 years $65.80 10 years $149.78 Series FE expenses payable over: 1 year $10.65 3 years $33.57 5 years $58.85 10 years $133.95 Series L expenses payable over: 1 year $27.52 3 years $86.76 5 years $152.058 10 years $346.17 283 IA Clarington U.S. Dividend Growth Registered Fund (continued) Series P expenses payable over: 1 year $2.25 3 years $7.09 5 years $12.42 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 284 10 years $28.27 Distinction Balanced Class Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series I, Series L, Series LM, Series M and Series O shares of a mutual fund corporation Start Date Series A: July 4, 2008 Series I: January 1, 2017 Series L: February 5, 2014 Series LM: February 5, 2014 Series M: July 4, 2008 Series O: February 5, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.45% Series I: negotiated and paid by each Series I investor Series L: 2.45% Series LM: 1.95% Series M: 1.95% Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate interest and dividend income as well as capital appreciation. The Fund will invest primarily in a diversified portfolio of other mutual funds with an emphasis toward Canadian balanced, Canadian equity growth and specialty growth funds. The Fund will also invest in international equity funds. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: may allocate up to 100% of its assets among Reference Funds using strategic asset allocation. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class, continuously monitors its holdings and asset mix, re-balances its underlying assets, 285 Distinction Balanced Class (continued) may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, and may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs, or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to large transaction risk, corporate class risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: concentration risk corporate class risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk government securities risk interest rate risk large transaction risk leveraged ETF risk 286 Distinction Balanced Class (continued) liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk smaller capitalization risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. In addition, please refer to each Reference Fund’s prospectus for a detailed description of these risks. As at May 23, 2017, an IA Clarington Guaranteed investment fund held 29.87% and Industrial Alliance held, on behalf of other investors, 27.36%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. As permitted by its investment objectives, the Fund held up to 21.27% of its net assets in units of IA Clarington Bond Fund, up to 10.73% of its net assets in units of IA Clarington Canadian Conservative Equity Fund, up to 10.70% of it net assets in units of IA Clarington Canadian Dividend Fund, up to 11.42% of its net assets in units of IA Clarington Global Value Fund and up to 10.46% of its net assets in units of IA Clarington Strategic Equity Income Fund. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for a combination of income and capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $32.02 3 years $100.94 5 years $176.93 10 years $402.74 Series L expenses payable over: 1 year $32.14 3 years $101.32 5 years $177.59 10 years $404.25 Series LM expenses payable over: 1 year $26.34 3 years $83.05 5 years $145.56 10 years $331.34 287 Distinction Balanced Class (continued) Series M expenses payable over: 1 year $26.13 3 years $82.37 5 years $144.38 10 years $328.65 Series O expenses payable over: 1 year $0.84 3 years $2.65 5 years $4.65 10 years $10.59 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 288 Distinction Bold Class Fund Details Type of Fund Global Balanced Securities Offered Series A, Series I, Series M and Series O shares of a mutual fund corporation Start Date Series A: July 4, 2008 Series I: January 1, 2017 Series M: July 4, 2008 Series O: February 5, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.60% Series I: negotiated and paid by each Series I investor Series M: 2.10% Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate a high level of capital appreciation. The Fund will invest primarily in a diversified portfolio of other mutual funds with an emphasis toward Canadian and international equity funds, as well as specialty funds. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: may allocate up to 100% of its assets among Reference Funds using strategic asset allocation. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class, continuously monitors its holdings and asset mix, re-balances its underlying assets, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, and 289 Distinction Bold Class (continued) may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to large transaction risk, corporate class risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: concentration risk corporate class risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk government securities risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk smaller capitalization risk 290 Distinction Bold Class (continued) You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. In addition, please refer to each Fund’s prospectus for a detailed description of these risks. As at May 23, 2017, Industrial Alliance held, on behalf of other investors, 21.08% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. As permitted by its investment objectives, the Fund held up to 15.86% of its net assets in units of IA Clarington Canadian Conservative Equity Fund, up to 15.76% of it net assets in units of IA Clarington Canadian Dividend Fund, up to 15.90% of its net assets in units of IA Clarington Global Equity Fund, up to 15.65% of its net assets in units of IA Clarington Global Opportunities Fund, up to 12.19% of its net assets in units of IA Clarington Global Value Fund and up to 10.97% of its net assets in units of IA Clarington Strategic Equity Income Fund. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45● for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $34.04 3 years $107.32 5 years $188.10 10 years $428.17 Series M expenses payable over: 1 year $27.77 3 years $87.54 5 years $153.43 10 years $349.25 Series O expenses payable over: 1 year $1.53 3 years $4.84 5 years $8.48 10 years $19.30 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information 291 Distinction Conservative Class Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series I, Series L, Series LM, Series M and Series O shares of a mutual fund corporation Start Date Series A: July 4, 2008 Series I: January 1, 2017 Series L: February 5, 2014 Series LM: February 5, 2014 Series M: July 4, 2008 Series O: February 5, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.35% Series I: negotiated and paid by each Series I investor Series L: 2.35% Series LM: 1.90% Series M: 1.90% Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate interest and dividend income with the potential for capital appreciation. The Fund will invest primarily in a diversified portfolio of other mutual funds with an emphasis toward Canadian income, balanced and growth funds. The Fund will also invest in international equity funds. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: may allocate up to 100% of its assets among Reference Funds using strategic asset allocation. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class, continuously monitors its holdings and asset mix, re-balances its underlying assets, 292 Distinction Conservative Class (continued) may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, and may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to large transaction risk, corporate class risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: concentration risk corporate class risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk government securities risk interest rate risk large transaction risk leveraged ETF risk 293 Distinction Conservative Class (continued) liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. In addition, please refer to each Reference Fund’s prospectus for a detailed description of these risks. As at May 23, 2017, an IA Clarington Guaranteed investment fund held 33.79% and Industrial Alliance held, on behalf of other investors, 16.95%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. As permitted by its investment objectives, the Fund held up to 33.29% of its net assets in units of IA Clarington Bond Fund, up to 10.96% of its net assets in units of IA Clarington Canadian Conservative Equity Fund, up to 11.22% of it net assets in units of IA Clarington Canadian Dividend Fund, up to 14.71% of its net assets in units of IA Clarington Global Value Fund and up to 14.75% of its net assets in units of IA Clarington Strategic Equity Income Fund. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for a combination of income and capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $31.02 3 years $97.80 5 years $171.41 10 years $390.19 Series L expenses payable over: 1 year $30.75 3 years $96.95 5 years $169.93 10 years $386.81 Series LM expenses payable over: 1 year $26.08 3 years $82.21 5 years $144.10 10 years $328.01 Series M expenses payable over: 1 year $26.14 3 years $82.40 5 years $144.43 10 years $328.76 294 Distinction Conservative Class (continued) Series O expenses payable over: 1 year $0.84 3 years $2.66 5 years $4.66 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 295 10 years $10.62 Distinction Growth Class Fund Details Type of Fund Global Balanced Securities Offered Series A, Series I, Series L, Series LM, Series M and Series O shares of a mutual fund corporation Start Date Series A: July 4, 2008 Series I: January 1, 2017 Series L: February 5, 2014 Series LM: February 5, 2014 Series M: July 4, 2008 Series O: February 5, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.50% Series I: negotiated and paid by each Series I investor Series L: 2.50% Series LM: 2.00% Series M: 2.00% Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate primarily capital appreciation, with some exposure to income funds for diversification. The Fund will invest primarily in a diversified portfolio of other mutual funds with an emphasis toward Canadian and international equity funds, as well as specialty funds. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: may allocate up to 100% of its assets among Reference Funds using strategic asset allocation. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class, continuously monitors its holdings and asset mix, re-balances its underlying assets, 296 Distinction Growth Class (continued) may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, and may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to large transaction risk, corporate class risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: concentration risk corporate class risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk government risk interest rate risk large transaction risk leveraged ETF risk 297 Distinction Growth Class (continued) liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk smaller capitalization risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. In addition, please refer to each Reference Fund’s prospectus for a detailed description of these risks. As at May 23, 2017, an IA Clarington Guaranteed investment fund held 37.85% and Industrial Alliance held, on behalf of other investors, 21.89%, respectively of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by these investors. As permitted by its investment objectives, the Fund held up to 15.81% of its net assets in units of IA Clarington Canadian Conservative Equity Fund, up to 15.79% of it net assets in units of IA Clarington Canadian Dividend Fund, up to 11.18% of its net assets in units of IA Clarington Global Equity Fund, up to 10.87% of its net assets in units of IA Clarington Global Opportunities Fund, up to 10.60% of its net assets in units of IA Clarington Global Value Fund and up to 10.27% of its net assets in units of IA Clarington Strategic Equity Income Fund. These investments did not result in any additional risk to the Fund. Who Should Invest In this Fund? Investors: seeking the possibility for capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $32.56 3 years $102.65 5 years $179.92 10 years $409.54 Series L expenses payable over: 1 year $32.45 3 years $102.29 5 years $179.28 10 years $408.10 Series LM expenses payable over: 1 year $27.18 3 years $85.68 5 years $150.18 10 years $341.86 298 Distinction Growth Class (continued) Series M expenses payable over: 1 year $26.79 3 years $84.45 5 years $148.02 10 years $336.95 Series O expenses payable over: 1 year $0.84 3 years $2.65 5 years $4.65 10 years $10.58 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information 299 Distinction Prudent Class Fund Details Type of Fund Canadian Balanced Securities Offered Series A, Series I, Series M and Series O shares of a mutual fund corporation Start Date Series A: July 4, 2008 Series I: January 1, 2017 Series M: July 4, 2008 Series O: February 5, 2014 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series I: negotiated and paid by each Series I investor Series M: 1.80% Series O: negotiated and paid by each Series O investor Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to generate income with the potential for capital appreciation. The Fund will invest primarily in a diversified portfolio of other mutual funds with an emphasis toward Canadian money market, income and balanced funds. The Fund will also invest in Canadian equity funds and will have a relatively small exposure to international equity funds. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: may allocate up to 100% of its assets among Reference Funds using strategic asset allocation. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class, continuously monitors its holdings and asset mix, re-balances its underlying assets, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, and 300 Distinction Prudent Class (continued) may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to large transaction risk, corporate class risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: concentration risk corporate class risk credit risk currency risk default risk derivatives risk equity market risk ETF risk foreign investment risk fund of funds risk government securities risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk series risk 301 Distinction Prudent Class (continued) You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. In addition, please refer to each Reference Fund’s prospectus for a detailed description of these risks. As at May 23, 2017, Industrial Alliance held, on behalf of other investors, 10.29% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. As permitted by its investment objectives, the Fund held up to 32.17% of its net assets in units of IA Clarington Bond Fund, up to 11.02% of its net assets in units of IA Clarington Canadian Conservative Equity Fund, up to 14.82% of its net assets in units of IA Clarington Global Value Fund and up to 20.10% of its net assets in units of IA Clarington Strategic Equity Income Fund. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility for a combination of income and capital appreciation, with low risk tolerance, and planning to invest over the medium term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for a description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Corporate Class Funds - Dividends” on page 45 for more details of the Fund’s distribution policy. CSFI will not pay a monthly dividend to any series of this Fund. These series may pay an annual income dividend within the current calendar year or a capital gain dividend before the end of January of the following year. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $27.24 3 years $85.86 5 years $150.49 10 years $342.56 Series M expenses payable over: 1 year $24.67 3 years $77.78 5 years $136.33 10 years $310.32 Series O expenses payable over: 1 year $0.89 3 years $2.80 5 years $47.91 10 years $11.17 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 302 IA Clarington Balanced Portfolio Fund Details Type of Fund Managed Asset Allocation Securities Offered Series A, Series B, Series B5, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5 and Series T5 units of a mutual fund trust Start Date Series A: April 15, 2016 Series B: April 15, 2016 Series B5: April 15, 2016 Series E: April 15, 2016 Series E5: April 15, 2016 Series F: April 15, 2016 Series F5: April 15, 2016 Series FE: April 15, 2016 Series FE5: April 15, 2016 Series L: April 15, 2016 Series L5: April 15, 2016 Series T5: April 15, 2016 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series B: 1.90% Series B5: 1.90% Series E: 1.80% Series E5: 1.80% Series F: 0.90% Series F5: 0.90% Series FE: 0.80% Series FE5: 0.80% Series L: 2.00% Series L5: 2.00% Series T5: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objectives The Fund’s objective is to balance capital growth with income by investing primarily, directly or indirectly, in a diversified portfolio of other mutual funds emphasizing Canadian, U.S. and global balanced and equity funds. The Fund will invest in North American fixed income funds and may also invest in ETFs or other securities to gain direct exposure to an asset class. 303 IA Clarington Balanced Portfolio (continued) The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will allocate up to 100% of its assets among Reference Funds using strategic asset allocation. The Portfolio Manager will incorporate a top down analysis of economic market conditions, as well as interest rate and credit cycle analysis to determine the asset mix for the Fund. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The equity allocation of the Fund’s portfolio will generally range from 50% to 70% and the fixed income allocation will generally range from 30% to 50%. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class. When selecting a Reference Fund to invest in, the Portfolio Manager will consider the types of securities held within the Reference Fund, the performance of the Reference Fund, the investment style of the Reference Fund and whether IA Clarington, or an affiliate, offers an appropriate Reference Fund, will generally be diversified by investment style, asset class and geographic region. This includes Canadian, U.S. and global equities and fixed income securities, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may depart temporarily from its fundamental investment objectives as a result of adverse market, economic, political or other considerations. In such an event, the Fund may invest in money market instruments and investment grade fixed income securities. Although intended to avoid losses in adverse conditions, defensive tactics might be inconsistent with the Fund’s investment objectives and might prevent the Fund from achieving its goal, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. Currently, the Fund does not intend to use derivatives to gain exposure to the Reference Funds. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its 304 IA Clarington Balanced Portfolio (continued) aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to derivatives risk, ETF risk, fund of funds risk, large transaction risk, Leveraged ETF risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: asset-backed and mortgaged-backed securities risk capital depletion risk concentration risk corporate class risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk floating rate loan liquidity risk foreign investment risk fund of funds risk government securities risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk prepayment risk reinvestment risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk 305 IA Clarington Balanced Portfolio (continued) short selling risk smaller capitalization risk tax risk There may be additional risks associated with investing in this Fund as a result of the Reference Funds in which it invests. Please see our website for a list of the Reference Funds in which the Fund invests. The risks relating to each of the Reference Funds can be found in each Reference Fund’s prospectus. You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 15.06% of its net assets in units of IA Clarington Bond Fund, up to 10.50% of its net assets in units of IA Clarington Core Plus Bond Fund, up to 15.09% of its net assets in shares of IA Clarington Dividend Growth Class, up to 11.16% of its net assets in units of IA Clarington Floating Rate Income Fund, up to 14.41% of its net assets in units of IA Clarington Global Value Fund, up to 14.98% of its net assets in units of IA Clarington Strategic Equity Income Fund and up to 20.28% of its net assets in units of IA Clarington U.S. Dividend Growth Fund. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking capital appreciation and income, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series B, Series E, Series F, Series FE and Series L units, the Fund will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. 306 IA Clarington Balanced Portfolio (continued) Series A expenses payable over: 1 year $25.83 3 years $81.42 5 years $142.71 10 years $324.85 Series B expenses payable over: 1 year $24.83 3 years $78.29 5 years $137.22 10 years $312.35 Series B5 expenses payable over: 1 year $24.46 3 years $77.10 5 years $135.14 10 years $307.63 Series E expenses payable over: 1 year $22.38 3 years $70.55 5 years $123.66 10 years $281.49 Series E5 expenses payable over: 1 year $23.92 3 years $75.42 5 years $132.20 10 years $300.92 Series F expenses payable over: 1 year $13.21 3 years $41.66 5 years $73.02 10 years $166.21 Series F5 expenses payable over: 1 year $12.14 3 years $38.28 5 years $67.10 10 years $152.74 Series FE expenses payable over: 1 year $11.65 3 years $36.72 5 years $64.37 10 years $146.52 Series FE5 expenses payable over: 1 year $11.87 3 years $37.41 5 years $65.57 10 years $149.25 Series L expenses payable over: 1 year $26.65 3 years $84.01 5 years $147.26 10 years $335.19 Series L5 expenses payable over: 1 year $26.84 3 years $84.61 5 years $148.30 10 years $337.58 Series T5 expenses payable over: 1 year $26.05 3 years $82.11 5 years $143.92 10 years $327.61 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 307 IA Clarington Conservative Portfolio Fund Details Type of Fund Managed Asset Allocation Securities Offered Series A, Series B, Series B5, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5 and Series T5 units of a mutual fund trust Start Date Series A: April 15, 2016 Series B: April 15, 2016 Series B5: April 15, 2016 Series E: April 15, 2016 Series E5: April 15, 2016 Series F: April 15, 2016 Series F5: April 15, 2016 Series FE: April 15, 2016 Series FE5: April 15, 2016 Series L: April 15, 2016 Series L5: April 15, 2016 Series T5: April 15, 2016 Eligible for Registered Plans Yes Management Fees Series A: 1.65% Series B:1.55% Series B5: 1.55% Series E: 1.45% Series E5: 1.45% Series F: 0.80% Series F5: 0.80% Series FE: 0.70% Series FE5: 0.70% Series L: 1.65% Series L5: 1.65% Series T5: 1.65% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide the safety of capital protection, generate income and provide the potential for modest capital growth by investing primarily, directly or indirectly, in a diversified portfolio of other mutual funds emphasizing North American fixed income funds. The Fund will have a relatively small exposure to 308 IA Clarington Conservative Portfolio (continued) Canadian, U.S. and global balanced and equity funds and may also invest in ETFs or other securities to gain direct exposure to an asset class. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will allocate up to 100% of its assets among Reference Funds using strategic asset allocation. The Portfolio Manager will incorporate a top down analysis of economic market conditions, as well as interest rate and credit cycle analysis to determine the asset mix for the Fund. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The equity allocation of the Fund’s portfolio will generally range from 10% to 20% and the fixed income allocation will generally range from 80% to 90%. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may tactically make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class. When selecting a Reference Fund to invest in, the Portfolio Manager will consider the types of securities held within the Reference Fund, the performance of the Reference Fund, the investment style of the Reference Fund and whether IA Clarington, or an affiliate, offers an appropriate Reference Fund, will generally be diversified by investment style, asset class and geographic region. This includes Canadian, U.S. and global equities and fixed income securities, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may depart temporarily from its fundamental investment objectives as a result of adverse market, economic, political or other considerations. In such an event, the Fund may invest in money market instruments and investment grade fixed income securities. Although intended to avoid losses in adverse conditions, defensive tactics might be inconsistent with the Fund’s investment objectives and might prevent the Fund from achieving its goal, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs, or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. Currently, the Fund does not intend to use derivatives to gain exposure to the Reference Funds. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a 309 IA Clarington Conservative Portfolio (continued) Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to derivatives risk, ETF risk, fund of funds risk, large transaction risk, Leveraged ETF risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: asset-backed and mortgage backed securities risk capital depletion risk concentration risk corporate class risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk floating rate loan liquidity risk foreign investment risk fund of funds risk government securities risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk prepayment risk reinvestment risk repurchase and reverse repurchase transactions and securities lending risk 310 IA Clarington Conservative Portfolio (continued) sector risk series risk short selling risk smaller capitalization risk tax risk There may be additional risks associated with investing in this Fund as a result of the Reference Funds in which it invests. Please see our website for a list of the Reference Funds in which the Fund invests. The risks relating to each of the Reference Funds can be found in each Reference Fund’s prospectus. You will find an explanation of each risk under “What are the Specific Risks Associated with this Mutual Fund?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 37.58% of its net assets in units of IA Clarington Bond Fund, up to 26.29% of its net assets in units of IA Clarington Core Plus Bond Fund, up to 13.17% of its net assets in units of IA Clarington Floating Rate Income Fund and up to 10.51% of its net assets in units of IA Clarington Strategic Corporate Bond Fund during the past year. These investments did not result in any additional risk to the Fund Who Should Invest in this Fund? Investors: seeking a flow of income and possibility of capital appreciation, seeking preservation of capital with low risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Fund - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series B, Series E, Series F, Series FE and Series L units, the Fund will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December each year. For Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. 311 IA Clarington Conservative Portfolio (continued) Series A expenses payable over: 1 year $21.77 3 years $68.63 5 years $120.29 10 years $273.81 Series B expenses payable over: 1 year $19.99 3 years $63.02 5 years $110.46 10 years $251.44 Series B5 expenses payable over: 1 year $19.69 3 years $62.07 5 years $108.79 10 years $247.63 Series E expenses payable over: 1 year $19.37 3 years $61.05 5 years $107.01 10 years $243.59 Series E5 expenses payable over: 1 year $18.89 3 years $59.55 5 years $104.38 10 years $237.61 Series F expenses payable over: 1 year $11.65 3 years $36.73 5 years $64.38 10 years $146.54 Series F5 expenses payable over: 1 year $11.54 3 years $35.55 5 years $62.31 10 years $141.84 Series FE expenses payable over: 1 year $10.43 3 years $32.89 5 years $57.65 10 years $131.23 Series FE5 expenses payable over: 1 year $10.55 3 years $33.27 5 years $58.32 10 years $132.76 Series L expenses payable over: 1 year $22.31 3 years $70.33 5 years $123.27 10 years $280.59 Series L5 expenses payable over: 1 year $22.42 3 years $70.69 5 years $123.91 10 years $282.06 Series T5 expenses payable over: 1 year $21.88 3 years $68.97 5 years $120.89 10 years $275.18 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 312 IA Clarington Growth Portfolio Fund Details Type of Fund Managed Asset Allocation Securities Offered Series A, Series B, Series B5, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5 and Series T5 units of a mutual fund trust Start Date Series A: April 15, 2016 Series B: April 15, 2016 Series B5: April 15, 2016 Series E: April 15, 2016 Series E5: April 15, 2016 Series F: April 15, 2016 Series F5: April 15, 2016 Series FE: April 15, 2016 Series FE5: April 15, 2016 Series L: April 15, 2016 Series L5: April 15, 2016 Series T5: April 15, 2016 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series B: 1.90% Series B5: 1.90% Series E: 1.80% Series E5: 1.80% Series F: 0.90% Series F5: 0.90% Series FE: 0.80% Series FE5: 0.80% Series L: 2.00% Series L5: 2.00% Series T5: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objectives The Fund’s objective is to provide capital growth with modest income potential by investing primarily, directly or indirectly, in a diversified portfolio of other mutual funds emphasizing global, U.S. and Canadian equity and balanced funds. The Fund will have a relatively small exposure to North American fixed income funds and may also invest in ETFs or other securities to gain direct exposure to an asset class. 313 IA Clarington Growth Portfolio (continued) The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will allocate up to 100% of its assets among Reference Funds using strategic asset allocation. The Portfolio Manager will incorporate a top down analysis of economic market conditions, as well as interest rate and credit cycle analysis to determine the asset mix for the Fund. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The equity allocation of the Fund’s portfolio will generally range from 70% to 90% and the fixed income allocation will generally range from 10% to 30%. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class. When selecting a Reference Fund to invest in, the Portfolio Manager will consider the types of securities held within the Reference Fund, the performance of the Reference Fund, the investment style of the Reference Fund and whether IA Clarington, or an affiliate, offers an appropriate Reference Fund, will generally be diversified by investment style, asset class and geographic region. This includes Canadian, U.S. and global equities and fixed income securities, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies; may depart temporarily from its fundamental investment objectives as a result of adverse market, economic, political or other considerations. In such an event, the Fund may invest in money market instruments and investment grade fixed income securities. Although intended to avoid losses in adverse conditions, defensive tactics might be inconsistent with the Fund’s investment objectives and might prevent the Fund from achieving its goal; may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs; or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund; may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. Currently, the Fund does not intend to use derivatives to gain exposure to the Reference Funds. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its 314 IA Clarington Growth Portfolio (continued) aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to derivatives risk, ETF risk, fund of funds risk, large transaction risk, Leveraged ETF risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: asset-backed and mortgaged-backed securities risk capital depletion risk concentration risk corporate class risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk floating rate loan liquidity risk foreign investment risk fund of funds risk government securities risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk prepayment risk 315 IA Clarington Growth Portfolio (continued) reinvestment risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk smaller capitalization risk tax risk There may be additional risks associated with investing in this Fund as a result of the Reference Funds in which it invests. Please see our website for a list of the Reference Funds in which the Fund invests. The risks relating to each of the Reference Funds can be found in each Reference Fund’s prospectus. You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 10.39% of its net assets in units of IA Clarington Bond Fund, up to 10.11% of its net assets in units of IA Clarington Canadian Small Cap Fund, up to 15.53% of its net assets in shares of IA Clarington Dividend Growth Class, up to 15.26% of its net assets in units of IA Clarington Global Value Fund, up to 15.47% of its net assets in units of IA Clarington Strategic Equity Income Fund and up to 22.76% of its net assets in units of IA Clarington U.S. Dividend Growth Fund during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility of capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series B, Series E, Series F, Series FE and Series L units, the Fund will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. 316 IA Clarington Growth Portfolio (continued) Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $26.06 3 years $82.15 5 years $143.99 10 years $327.77 Series B expenses payable over: 1 year $24.75 3 years $78.03 5 years $136.77 10 years $311.33 Series B5 expenses payable over: 1 year $25.75 3 years $81.17 5 years $142.27 10 years $323.84 Series E expenses payable over: 1 year $22.12 3 years $69.74 5 years $122.23 10 years $278.23 Series E5 expenses payable over: 1 year $23.84 3 years $75.16 5 years $131.75 10 years $299.89 Series F expenses payable over: 1 year $13.84 3 years $42.50 5 years $74.50 10 years $169.57 Series F5 expenses payable over: 1 year $12.70 3 years $40.03 5 years $70.17 10 years $159.73 Series FE expenses payable over: 1 year $12.16 3 years $38.34 5 years $67.20 10 years $152.96 Series FE5 expenses payable over: 1 year $12.47 3 years $39.32 5 years $68.91 10 years $156.86 Series L expenses payable over: 1 year $26.71 3 years $84.21 5 years $147.61 10 years $336.00 Series L5 expenses payable over: 1 year $26.43 3 years $83.32 5 years $146.06 10 years $332.42 Series T5 expenses payable over: 1 year $26.49 3 years $83.51 5 years $146.37 10 years $333.18 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 317 IA Clarington Maximum Growth Portfolio Fund Details Type of Fund Managed Asset Allocation Securities Offered Series A, Series B, Series B5, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5 and Series T5 units of a mutual fund trust Start Date Series A: April 15, 2016 Series B: April 15, 2016 Series B5: April 15, 2016 Series E: April 15, 2016 Series E5: April 15, 2016 Series F: April 15, 2016 Series F5: April 15, 2016 Series FE: April 15, 2016 Series FE5: April 15, 2016 Series L: April 15, 2016 Series L5: April 15, 2016 Series T5: April 15, 2016 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series B: 1.90% Series B5: 1.90% Series E: 1.80% Series E5: 1.80% Series F: 0.90% Series F5: 0.90% Series FE: 0.80% Series FE5: 0.80% Series L: 2.00% Series L5: 2.00% Series T5: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec What Does the Fund Invest In? Investment Objectives The Fund’s objective is to provide capital growth by investing primarily, directly or indirectly, in a diversified portfolio of other mutual funds emphasizing global, U.S. and Canadian equity funds of all market capitalizations. The Fund may also invest in North American fixed income funds or global, U.S. or Canadian balanced funds or ETFs or other securities to gain direct exposure to an asset class. 318 IA Clarington Maximum Growth Portfolio (continued) The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will allocate up to 100% of its assets among Reference Funds using strategic asset allocation. The Portfolio Manager will incorporate a top down analysis of economic market conditions, as well as interest rate and credit cycle analysis to determine the asset mix for the Fund. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The equity allocation of the Fund’s portfolio will generally range from 80% to 100% and the fixed income allocation will generally range from 0% to 20%. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class. When selecting a Reference Fund to invest in, the Portfolio Manager will consider the types of securities held within the Reference Fund, the performance of the Reference Fund, the investment style of the Reference Fund and whether IA Clarington, or an affiliate, offers an appropriate Reference Fund, will generally be diversified by investment style, asset class and geographic region. This includes Canadian, U.S. and global equities and fixed income securities, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may depart temporarily from its fundamental investment objectives as a result of adverse market, economic, political or other considerations. In such an event, the Fund may invest in money market instruments and investment grade fixed income securities. Although intended to avoid losses in adverse conditions, defensive tactics might be inconsistent with the Fund’s investment objectives and might prevent the Fund from achieving its goal, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs, or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. Currently, the Fund does not intend to use derivatives to gain exposure to the Reference Fund. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its 319 IA Clarington Maximum Growth Portfolio (continued) aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to derivatives risk, ETF risk, fund of funds risk, large transaction risk, Leveraged ETF risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: asset-backed and mortgaged-backed securities risk capital depletion risk concentration risk corporate class risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk floating rate loan liquidity risk foreign investment risk fund of funds risk government securities risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk prepayment risk 320 IA Clarington Maximum Growth Portfolio (continued) reinvestment risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk short selling risk smaller capitalization risk tax risk There may be additional risks associated with investing in this Fund as a result of the Reference Funds in which it invests. Please see our website for a list of the Reference Funds in which the Fund invests. The risks relating to each of the Reference Funds can be found in each Reference Fund’s prospectus. You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 25.01% of its net assets in shares of IA Clarington Dividend Growth Class, up to 11.57% of its net assets in units of IA Clarington Global Equity Fund, up to 24.42% of its net assets in units of IA Clarington Global Value Fund, up to 24.79% of its net assets in units of IA Clarington Strategic Equity Income Fund and up to 24.92% of its net assets in units of IA Clarington U.S. Dividend Growth Fund during the past year. These investment did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking the possibility of capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series B, Series E, Series F, Series FE and Series L units, the Fund will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual 321 IA Clarington Maximum Growth Portfolio (continued) performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $26.82 3 years $84.55 5 years $148.19 10 years $337.33 Series B expenses payable over: 1 year $24.40 3 years $76.92 5 years $134.82 10 years $306.90 Series B5 expenses payable over: 1 year $25.06 3 years $79.00 5 years $138.46 10 years $315.18 Series E expenses payable over: 1 year $24.50 3 years $77.23 5 years $135.38 10 years $308.15 Series E5 expenses payable over: 1 year $23.85 3 years $75.20 5 years $131.80 10 years $300.02 Series F expenses payable over: 1 year $13.50 3 years $42.57 5 years $74.61 10 years $169.84 Series F5 expenses payable over: 1 year $13.79 3 years $43.46 5 years $76.18 10 years $173.41 Series FE expenses payable over: 1 year $12.32 3 years $38.84 5 years $68.09 10 years $154.98 Series FE5 expenses payable over: 1 year $11.56 3 years $36.43 5 years $63.86 10 years $145.35 Series L expenses payable over: 1 year $27.28 3 years $86.00 5 years $150.74 10 years $343.12 Series L5 expenses payable over: 1 year $27.05 3 years $85.28 5 years $149.48 10 years $340.26 Series T5 expenses payable over: 1 year $26.91 3 years $84.84 5 years $148.71 10 years $338.51 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 322 IA Clarington Moderate Portfolio Fund Details Type of Fund Managed Asset Allocation Securities Offered Series A, Series B, Series B5, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series L, Series L5 and Series T5 units of a mutual fund trust Start Date Series A: April 15, 2016 Series B: April 15, 2016 Series B5: April 15, 2016 Series E: April 15, 2016 Series E5: April 15, 2016 Series F: April 15, 2016 Series F5: April 15, 2016 Series FE: April 15, 2016 Series FE5: April 15, 2016 Series L: April 15, 2016 Series L5: April 15, 2016 Series T5: April 15, 2016 Eligible for Registered Plans Yes Management Fees Series A: 2.00% Series B: 1.90% Series B5: 1.90% Series E: 1.80% Series E5: 1.80% Series F: 0.90% Series F5: 0.90% Series FE: 0.80% Series FE5: 0.80% Series L: 2.00% Series L5: 2.00% Series T5: 2.00% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Does the Fund Invest In? Investment Objective The Fund’s objective is to provide capital protection along with the potential for modest income and some capital growth by investing primarily, directly or indirectly, in a diversified portfolio of other mutual funds emphasizing North American fixed income funds. The Fund will invest in Canadian. U.S. and global balanced and equity funds and may also invest in ETFs or other securities to gain direct exposure to an asset class. 323 IA Clarington Moderate Portfolio (continued) The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The Fund: will allocate up to 100% of its assets among Reference Funds using strategic asset allocation. The Portfolio Manager will incorporate a top down analysis of economic market conditions, as well as interest rate and credit cycle analysis to determine the asset mix for the Fund. Please see our website for a list of the Reference Funds in which the Fund invests. The Reference Funds in which the Fund invests may change from time to time and may be managed by us or an affiliate. The equity allocation of the Fund’s portfolio will generally range from 30% to 50% and the fixed income allocation will generally range from 50% to 70%. The Portfolio Manager will monitor the Reference Funds on an ongoing basis and may make changes to the Reference Funds, may adjust the percentage of the Fund invested in each asset class or in any of the Reference Funds based on changes in the market outlook for each asset class. When selecting a Reference Fund to invest in, the Portfolio Manager will consider the types of securities held within the Reference Fund, the performance of the Reference Fund, the investment style of the Reference Fund and whether IA Clarington, or an affiliate, offers an appropriate Reference Fund, will generally be diversified by investment style, asset class and geographic region. This includes Canadian, U.S. and global equities and fixed income securities, may invest in ETFs (which qualify as index participation units under NI 81-102) or other securities in a manner consistent with the Fund’s investment objective and other strategies, may depart temporarily from its fundamental investment objectives as a result of adverse market, economic, political or other considerations. In such an event, the Fund may invest in money market instruments and investment grade fixed income securities. Although intended to avoid losses in adverse conditions, defensive tactics might be inconsistent with the Fund’s investment objectives and might prevent the Fund from achieving its goal, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs, or no more than 20%, taken at market value at the time of the transaction, would consist of a combination of securities of Leveraged ETFs and all securities sold short by the Fund, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual securities and markets instead of buying the securities directly, which is considered “non-hedging”. Currently, the Fund does not intend to use derivatives to gain exposure to the Reference Funds. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its 324 IA Clarington Moderate Portfolio (continued) aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The Fund uses strategic asset allocation in order to invest in a mix of different Reference Funds. This strategy helps to reduce the Fund’s volatility but also makes the Fund’s performance dependent on the performance of the Reference Funds in which it invests. The Fund’s ability to achieve its overall investment objective is directly related to the Reference Funds’ ability to achieve their individual investment objectives. The Fund is subject to derivatives risk, ETF risk, fund of funds risk, large transaction risk, leveraged ETF risk and series risk, as well as to risks relating to the Reference Funds it holds. The risks of the Reference Funds held by the Fund may include: asset-backed and mortgage-backed securities risk capital depletion risk concentration risk corporate class risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk floating rate loan liquidity risk foreign investment risk fund of funds risk government securities risk income trust risk interest rate risk large transaction risk leveraged ETF risk liquidity risk prepayment risk reinvestment risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk 325 IA Clarington Moderate Portfolio (continued) short selling risk smaller capitalization risk tax risk There may be additional risks associated with investing in this Fund as a result of the Reference Funds in which it invests. Please see our website for a list of the Reference Funds in which the Fund invests. The risks relating to each of the Reference Funds can be found in each Reference Fund’s prospectus. You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As permitted by its investment objectives, the Fund held up to 22.58% of its net assets in units of IA Clarington Bond Fund, up to 18.59% of its net assets in units of IA Clarington Core Plus Bond Fund, up to 11.47% of its ne assets in units of IA Clarington Dividend Growth Class, up to 13.84% of its net assets in units of IA Clarington Floating Rate Income Fund, up to 10.60% of its net assets in units of IA Clarington Strategic Corporate Bond Fund, up to 10.04% of its net assets in units of IA Clarington Strategic Equity Income Fund and up to 10.80% of its net assets in units of IA Clarington U.S. Dividend Growth Registered Fund during the past year. These investments did not result in any additional risk to the Fund. Who Should Invest in this Fund? Investors: seeking a flow of income and possibility of capital appreciation, seeking preservation of capital, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 45 for more details of the Fund’s distribution policy. For Series A, Series B, Series E, Series F, Series FE and Series L units, the Fund will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series B5, Series E5, Series F5, Series FE5, Series L5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. 326 IA Clarington Moderate Portfolio (continued) Series A expenses payable over: 1 year $26.08 3 years $82.21 5 years $144.10 10 years $328.02 Series B expenses payable over: 1 year $24.54 3 years $77.36 5 years $135.59 10 years $308.64 Series B5 expenses payable over: 1 year $24.53 3 years $77.34 5 years $135.55 10 years $308.56 Series E expenses payable over: 1 year $23.29 3 years $73.43 5 years $128.70 10 years $292.96 Series E5 expenses payable over: 1 year $24.14 3 years $76.11 5 years $133.41 10 years $303.67 Series F expenses payable over: 1 year $12.90 3 years $40.66 5 years $71.26 10 years $162.21 Series F5 expenses payable over: 1 year $13.34 3 years $42.06 5 years $73.72 10 years $167.81 Series FE expenses payable over: 1 year $11.82 3 years $37.27 5 years $65.33 10 years $148.71 Series FE5 expenses payable over: 1 year $11.22 3 years $35.36 5 years $61.97 10 years $141.06 Series L expenses payable over: 1 year $26.54 3 years $83.68 5 years $146.67 10 years $333.86 Series L5 expenses payable over: 1 year $26.67 3 years $84.09 5 years $147.39 10 years $335.50 Series T5 expenses payable over: 1 year $26.19 3 years $82.58 5 years $144.74 10 years $329.47 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 327 Forstrong Global Strategist Balanced Fund Fund Details Type of Fund Tactical Balanced Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series I, Series L, Series L5, Series O and Series T5 units of a mutual fund trust Start Date Series A: August 11, 2016 Series E: August 11, 2016 Series E5: August 11, 2016 Series F: August 11, 2016 Series F5: August 11, 2016 Series FE: August 11, 2016 Series FE5: August 11, 2016 Series I: August 11, 2016 Series L: August 11, 2016 Series L5: August 11, 2016 Series O: August 11, 2016 Series T5: August 11, 2016 Eligible for Registered Plans Yes Management Fees Series A: 1.85% Series E: 1.80% Series E5: 1.80% Series F: 0.85% Series F5: 0.85% Series FE: 0.80% Series FE5: 0.80% Series I: negotiated and paid by each Series I investor Series L: 1.85% Series L5: 1.85% Series O: negotiated and paid by each Series O investor Series T5: 1.85% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Forstrong Global Asset Management Inc. Kelowna, British Columbia 328 Forstrong Global Strategist Balanced Fund (continued) What Does the Fund Invest In? Investment Objectives The Fund’s objective is to provide a balance of long-term capital appreciation with a modest income stream primarily through diversified investments in a balanced mix of ETFs of multiple global asset classes. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor: will tactically manage the asset mix of the Fund based on its analysis of a wide array of global economic and financial conditions incorporating a long-term macro outlook with shorter-term tactical strategies, will determine the relative desirability of a balanced mix of asset classes and specific ETFs on an ongoing basis by grading them based on criteria such as, but not limited to, fundamental factors and conditions, quantitative ratings, qualitative assessments and risk/return characteristics. The Fund: will primarily invest in a balanced portfolio of both growth-oriented and income-generating ETFs (which qualify as index participation units under NI 81-102) which are listed on North American stock exchanges in order to gain exposure to various global asset classes including, but not limited to: equities, investment grade fixed income securities, and higher yielding income-oriented securities, will tactically allocate a significant portion of its portfolio either for capital growth or defensively to protect capital depending on the outlook of the sub-advisor, will be diversified by investment style, asset class, economic sector and geographic region, along with cash and cash equivalents. The Fund is not limited to how much it invests in any asset class. This will vary according to the sub-advisor’s assessment of market conditions and may include niche markets, will also invest in ETFs to gain exposure to real estate, mortgages, commodities, and any other investment opportunities that are consistent with the Fund’s investment objectives and strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual currencies, securities and markets instead of buying the currencies or securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a 329 Forstrong Global Strategist Balanced Fund (continued) Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk concentration risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk ETF risk foreign investment risk government securities risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk tax risk tracking risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. As at May 23, 2017, an investor held 11.16% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: 330 Forstrong Global Strategist Balanced Fund (continued) seeking income with possibility for long-term capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series I, Series L and Series O units, the Fund will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E5, Series F5, Series FE5, Series L5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series F5, Series FE5, Series L5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $27.16 3 years $85.61 5 years $150.05 10 years $341.56 Series E expenses payable over: 1 year $26.39 3 years $83.20 5 years $145.83 10 years $331.95 Series E5 expenses payable over: 1 year $26.40 3 years $83.21 5 years $145.85 10 years $332.00 Series F expenses payable over: 1 year $14.62 3 years $46.10 5 years $80.81 10 years $183.94 Series F5 expenses payable over: 1 year $14.63 3 years $46.11 5 years $80.82 10 years $183.96 Series FE expenses payable over: 1 year $14.43 3 years $45.51 5 years $79.76 10 years $181.56 Series FE5 expenses payable over: 1 year $14.44 3 years $45.5 5 years $79.77 10 years $181.58 Series I expenses payable over: 1 year $1.85 3 years $5.83 5 years $10.22 10 years $23.27 331 Forstrong Global Strategist Balanced Fund (continued) Series L expenses payable over: 1 year $27.63 3 years $87.09 5 years $152.65 10 years $347.47 Series L5 expenses payable over: 1 year $27.44 3 years $86.52 5 years $151.65 10 years $345.19 Series O expenses payable over: 1 year $3.45 3 years $10.88 5 years $19.07 10 years $43.41 Series T5 expenses payable over: 1 year $27.44 3 years $86.52 5 years $151.65 10 years $345.19 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 332 Forstrong Global Strategist Growth Fund Fund Details Type of Fund Tactical Balanced Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series I, Series L, Series L5, Series O and Series T5 units of a mutual fund trust Start Date Series A: August 11, 2016 Series E: August 11, 2016 Series E5: August 11, 2016 Series F: August 11, 2016 Series F5: August 11, 2016 Series FE: August 11, 2016 Series FE5: August 11, 2016 Series I: August 11, 2016 Series L: August 11, 2016 Series L5: August 11, 2016 Series O: August 11, 2016 Series T5: August 11, 2016 Eligible for Registered Plans Yes Management Fees Series A: 1.85% Series E: 1.80% Series E5: 1.80% Series F: 0.85% Series F5: 0.85% Series FE: 0.80% Series FE5: 0.80% Series I: negotiated and paid by each Series I investor Series L: 1.85% Series L5: 1.85% Series O: negotiated and paid by each Series O investor Series T5: 1.85% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Forstrong Global Asset Management Inc. Kelowna, British Columbia 333 Forstrong Global Strategist Growth Fund (continued) What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide long-term capital appreciation primarily through diversified investments in growth-oriented ETFs of multiple global asset classes. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor: will actively manage the asset mix of the Fund with a bias toward securities that can provide capital growth based on its analysis of a wide array of global economic and financial conditions incorporating a long-term macro outlook with shorter-term tactical strategies, and will determine the relative desirability of asset classes and specific ETFs to provide capital growth on an ongoing basis by grading them based on criteria such as, but not limited to, fundamental factors and conditions, quantitative ratings, qualitative assessments and risk/return characteristics. The Fund: will primarily invest in a portfolio of ETFs (which qualify as index participation units under NI 81-102) that generate capital growth and which are listed on North American stock exchanges in order to gain exposure to various global asset classes including, but not limited to: equities, investment grade fixed income securities, and higher yielding securities, will be diversified by investment style, asset class, economic sector and geographic region, along with cash and cash equivalents. The Fund is not limited to how much it invests in any asset class. This will vary according to the sub-advisor’s assessment of market conditions and may include niche markets, will also invest in ETFs to gain exposure to real estate, mortgages, commodities, and any other investment opportunities that are consistent with the Fund’s investment objectives and strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual currencies, securities and markets instead of buying the currencies or securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in 334 Forstrong Global Strategist Growth Fund (continued) an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in this Fund are: asset-backed and mortgage-backed securities risk concentration risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk ETF risk foreign investment risk government securities risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk tax risk tracking risk You will find an explanation of each risk under “What are the Specific Risks Associated with Mutual Funds?” beginning on page 5 of this document. 335 Forstrong Global Strategist Growth Fund (continued) As at May 23, 2017, an investor held 19.79% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking the possibility of capital appreciation, with medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series I, Series L and Series O units, the Fund will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December of each year. For Series E5, Series F5, Series FE5, Series L5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series F5, Series FE5, Series L5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $28.45 3 years $89.68 5 years $157.20 10 years $357.82 Series E expenses payable over: 1 year $28.23 3 years $89.00 5 years $156.01 10 years $355.11 Series E5 expenses payable over: 1 year $28.24 3 years $89.02 5 years $156.03 10 years $355.16 Series F expenses payable over: 1 year $16.13 3 years $50.84 5 years $89.12 10 years $202.86 Series F5 expenses payable over: 1 year $15.67 3 years $49.39 5 years $86.57 10 years $197.06 Series FE expenses payable over: 1 year $15.48 3 years $48.79 5 years $85.53 10 years $194.68 336 Forstrong Global Strategist Growth Fund (continued) Series FE5 expenses payable over: 1 year $15.48 3 years $48.80 5 years $85.54 10 years $194.70 Series I expenses payable over: 1 year $2.95 3 years $9.30 5 years $16.31 10 years $37.12 Series L expenses payable over: 1 year $28.44 3 years $89.66 5 years $157.15 10 years $357.72 Series L5 expenses payable over: 1 year $28.44 3 years $89.67 5 years $157.17 10 years $357.77 Series O expenses payable over: 1 year $4.55 3 years $14.35 5 years $25.15 10 years $57.26 Series T5 expenses payable over: 1 year $28.44 3 years $89.67 5 years $157.17 10 years $357.77 Please see “Fund Expenses Indirectly Borne by Investors” on page 50 for further information. 337 Forstrong Global Strategist Income Fund Fund Details Type of Fund Tactical Balanced Securities Offered Series A, Series E, Series E5, Series F, Series F5, Series FE, Series FE5, Series I, Series L, Series L5, Series O and Series T5 units of a mutual fund trust Start Date Series A: August 11, 2016 Series E: August 11, 2016 Series E5: August 11, 2016 Series F: August 11, 2016 Series F5: August 11, 2016 Series FE: August 11, 2016 Series FE5: August 11, 2016 Series I: August 11, 2016 Series L: August 11, 2016 Series L5: August 11, 2016 Series O: August 11, 2016 Series T5: August 11, 2016 Eligible for Registered Plans Yes Management Fees Series A: 1.85% Series E: 1.80% Series E5: 1.80% Series F: 0.85% Series F5: 0.85% Series FE: 0.80% Series FE5: 0.80% Series I: negotiated and paid by each Series I investor Series L: 1.85% Series L5: 1.85% Series O: negotiated and paid by each Series O investor Series T5: 1.85% Portfolio Manager Industrial Alliance Investment Management Inc. Québec City, Québec Sub-Advisor Forstrong Global Asset Management Inc. Kelowna, British Columbia 338 Forstrong Global Strategist Income Fund (continued) What Does the Fund Invest In? Investment Objective The Fund’s objective is to provide income combined with modest long-term capital appreciation primarily through diversified investments in income-oriented ETFs of multiple global asset classes. The fundamental investment objective may only be changed with the approval of a majority of Securityholders at a meeting called for that purpose. Investment Strategies The sub-advisor: will actively manage the asset mix of the Fund with a bias toward income-generating securities based on its analysis of a wide array of global economic and financial conditions incorporating a long-term macro outlook with shorter-term tactical strategies, and will determine the relative desirability of asset classes and specific ETFs that will generate income on an ongoing basis by grading them based on criteria such as, but not limited to, fundamental factors and conditions, quantitative ratings, qualitative assessments and risk/return characteristics. The Fund: will primarily invest in a portfolio of income-oriented ETFs (which qualify as index participation units under NI 81-102) that generate income and which are listed on North American stock exchanges in order to gain exposure to various global asset classes including, but not limited to: equities, investment grade fixed income securities, and higher yielding income-oriented securities, will be diversified by investment style, asset class, economic sector and geographic region, along with cash and cash equivalents. The Fund is not limited to how much it invests in any asset class. This will vary according to the sub-advisor’s assessment of market conditions and may include niche markets, will also invest in ETFs to gain exposure to real estate, mortgages, commodities, and any other investment opportunities that are consistent with the Fund’s investment objectives and strategies, may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes to reflect general market or economic conditions, may invest in Underlying ETFs provided that no more than 10% of the net assets of the Fund, taken at market value at the time of the transaction, would consist of securities of the Underlying ETFs, may enter into securities lending transactions and may enter into repurchase and reverse repurchase transactions in order to earn additional income and manage its portfolio. For a description of these transactions and the strategies to be used by the Fund to minimize the risks associated with these transactions, please see the discussion under “Repurchase and Reverse Repurchase Transactions and Securities Lending Risk” on page 10, and may use derivatives such as options, futures, forward contracts and swaps for hedging and non-hedging purposes. Such derivatives may be used to hedge against losses from changes in the security prices, currency exchange rates, interest rates or in stock markets. Derivatives may also be used to obtain exposure to individual currencies, securities and markets instead of buying the currencies or securities directly, which is considered “non-hedging”. If used for non-hedging purposes, the derivatives acquired will be consistent with the investment objectives of the Fund and the limits and restrictions under securities law. Please see the discussion under “Derivatives Risk” on page 7 for more details. The Fund received exemptive relief from the Canadian securities regulatory authorities to permit it to invest in securities of Underlying ETFs. Please see page 3 for the definition of this term. The Fund may only invest in a Leveraged ETF that is rebalanced daily to ensure that its performance and exposure to its underlying index will not exceed +/-200% of the corresponding daily performance of its underlying index. The Fund may not invest in 339 Forstrong Global Strategist Income Fund (continued) an Underlying ETF if, immediately after the transaction, its aggregate investment in Underlying ETFs would exceed 10% of the net assets of the Fund. Furthermore, the Fund may not invest in an Underlying ETF if its aggregate investment in Underlying ETFs, together with all securities sold short by the Fund, would exceed 20% of the net assets of the Fund. Investment in Underlying ETFs entails certain risks, including risk in relation to the performance of the underlying index and derivatives risk in relation to the use of financial instruments by the ETFs. The Fund may only invest in Underlying ETFs that are listed on a stock exchange in Canada or the United States. See “Leveraged ETF Risk” on page 10 for a description of the risks associated with such investment. The Fund’s portfolio turnover rate may be high. The higher the Fund’s portfolio turnover rate: the greater the chance that you may receive a distribution from the Fund that must be included in determining your taxable income for tax purposes, and the higher the Fund’s trading costs, which are an expense of the Fund and are paid out of the Fund’s assets, so that your returns may be reduced. What are the Risks of Investing in this Fund? The risks of investing in the Fund are: asset-backed and mortgage-backed securities risk concentration risk credit risk currency risk default risk derivatives risk emerging markets risk equity market risk ETF risk foreign investment risk government securities risk interest rate risk large transaction risk leveraged ETF risk liquidity risk repurchase and reverse repurchase transactions and securities lending risk sector risk series risk smaller capitalization risk tax risk tracking risk You will find an explanation of each risk under “What are the Specific Risks Associated with this Mutual Fund?” beginning on page 5 of this document. 340 Forstrong Global Strategist Income Fund (continued) As at May 23, 2017, an investor held 91.00% of the Fund. Please see “Large Transaction Risk” on page 9 for details of the risk associated with a possible redemption of Securities of the Fund by this investor. Who Should Invest in this Fund? Investors: seeking income with possibility for long-term capital appreciation, with low to medium risk tolerance, and planning to invest over the medium to long term. The description of suitability in this section is of a general nature only, and may not be applicable to the circumstances of any particular investor. Please see “Who Should Invest in this Fund?” on page 49 for description of how we determined the classification of this Fund’s risk tolerance level. Distribution Policy Please see “Trust Funds - Distributions” on page 44 for more details of the Fund’s distribution policy. For Series A, Series E, Series F, Series FE, Series I, Series L and Series O units, the Fund will not pay a monthly distribution. These series may pay an annual income or capital gain distribution in December each year. For Series E5, Series F5, Series FE5, Series L5 and Series T5 units, the Fund will make a monthly distribution of a fixed dollar amount per unit determined in January of each year. If the annualized monthly distribution per unit of the series at the time is between approximately 4% and 6% of the NAV per unit of the series as of December 31 of the previous year, the monthly distribution per unit will not change. If the annualized monthly distribution per unit of the series is outside that range, the monthly distribution amount will be adjusted to be approximately one-twelfth of 5% of the NAV per unit of the series as of December 31 of the previous year. The current monthly distribution rate is $0.042 per Series E5, Series F5, Series FE5, Series L5 and Series T5 unit, which rate will remain in effect until adjusted in accordance with this distribution policy. Fund Expenses Indirectly Borne by Investors The following table shows the cumulative amount of expenses that a typical investor with a $1,000 investment in the specified series of the Fund would pay over a 1, 3, 5 and 10 year period, assuming that the Fund’s annual performance is a constant 5% per year and the management expense ratio remained the same as in the Fund’s last financial year throughout the period. Series A expenses payable over: 1 year $27.51 3 years $86.74 5 years $152.03 10 years $346.07 Series E expenses payable over: 1 year $26.43 3 years $83.33 5 years $146.06 10 years $332.48 Series E5 expenses payable over: 1 year $26.44 3 years $83.34 5 years $146.08 10 years $332.53 Series F expenses payable over: 1 year $14.91 3 years $47.01 5 years $82.39 10 years $187.54 Series F5 expenses payable over: 1 year $14.91 3 years $47.01 5 years $82.40 10 years $187.56 Series FE expenses payable over: 1 year $14.86 3 years $46.84 5 years $82.10 10 years $186.88 341 Forstrong Global Strategist Income Fund (continued) Series FE5 expenses payable over: 1 year $14.86 3 years $46.84 5 years $82.11 10 years $186.90 Series I expenses payable over: 1 year $2.27 3 years $7.17 5 years $12.57 10 years $28.61 Series L expenses payable over: 1 year $27.61 3 years $87.03 5 years $152.54 10 years $347.23 Series L5 expenses payable over: 1 year $27.61 3 years $87.04 5 years $152.56 10 years $347.27 Series O expenses payable over: 1 year $3.88 3 years $12.22 5 years $21.41 10 years $48.74 Series T5 expenses payable over: 1 year $27.61 3 years $87.04 5 years $152.56 10 years $347.27 Please see “Fund Expenses Indirectly Borne by Investors” on page 10 for further information. 342 The IA Clarington Funds Offering Series A, Series B, Series B5, Series DA, Series DF, Series E, Series E4, Series E5, Series E6, Series EX, Series EX5, Series EX6, Series F, Series F4, Series F5, Series F6, Series F8, Series F10, Series FE, Series FE4, Series FE5, Series FE6, Series FX, Series FX5, Series FX6, Series FX8, Series I, Series L, Series L4, Series L5, Series L6, Series L8, Series L10, Series LM, Series M, Series O, Series P, Series P4, Series P5, Series P6, Series T4, Series T5, Series T6, Series T8, Series T10, Series V, Series X and Series Y units or shares as indicated below: Money Market Funds IA Clarington Money Market Fund (Series A, B, DA, DF, F, I, L, O and X) Fixed Income Funds IA Clarington Bond Fund (Series A, F, I, L, O and X) IA Clarington Core Plus Bond Fund (Series A, E, E4, F, F4, FE, FE4, I, L, L4, O, P, P4 and T4) IA Clarington Inhance Bond SRI Fund (Series B, E, F, FE and I) IA Clarington Real Return Bond Fund (Series A, F, I, L and O) IA Clarington Short-Term Bond Fund (Series A, F and I) IA Clarington Short-Term Income Class* (Series A) IA Clarington Strategic Corporate Bond Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O, P, P5 and T5) IA Clarington Strategic Corporate Bond Class* (Series A, E, E5, F, F5, L, L5 and T5) IA Clarington Tactical Bond Fund (Series A, F, I, L and O) IA Clarington Tactical Bond Class* (Series A, F, F5, L, L5 and T5) Floating Rate Debt Funds IA Clarington Floating Rate Income Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, P, P5 and T5) IA Clarington U.S. Dollar Floating Rate Income Fund (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5 and T5) Diversified Income Funds IA Clarington Inhance Monthly Income SRI Fund (Series E6, F6, FE, FE6, I, L6, O, P6, T6 and V) IA Clarington Monthly Income Balanced Fund (Series A, E, E6, F, F6, F8, I, L, L6, O, T6 and T8) IA Clarington Strategic Income Fund (Series A, E, E6, EX, EX6, F, F6, F8, I, L, L6, L8, O, P, P6, T6, T8 and Y) IA Clarington Strategic Income Class* (Series A, E, E6, F, F6, F8, L, L6, L8, T6 and T8) IA Clarington Tactical Income Fund (Series A, E, E6, EX, EX6, F, F6, F8, FE, FE6, FX, FX6, FX8, I, L, L6, L8, O, P, P6, T6, T8 and X) IA Clarington Tactical Income Class* (Series A, E, E6, F, F6, F8, L, L6, L8, T6 and T8) IA Clarington Yield Opportunities Fund (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5 and T5) Canadian Balanced Funds IA Clarington Canadian Balanced Fund (Series A, E, E5, F, F5, FE, FE5, FX, FX5, I, L, L5, O, P, P5 and T5) IA Clarington Canadian Balanced Class* (Series A, E, E5, EX, EX5, F, F5, FE, FE5, FX, FX5, L, L5, P, P5 and T5) IA Clarington Focused Balanced Fund (Series A, E, E5, EX, EX5, F, F5, FE, FE5, I, L, L5, O, P, P5 and T5) IA Clarington Focused Balanced Class* (Series A, E, E5, F, F5, L, L5 and T5) IA Clarington Growth & Income Fund (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5 and T5) IA Clarington Inhance Balanced SRI Portfolio (Series A, E, E6, F, F6, FE, FE6, I, L, L6, O and T6) IA Clarington Inhance Conservative SRI Portfolio (Series E6, F6, FE6, L6 and T6) IA Clarington Inhance Growth SRI Portfolio (Series A, E, F, FE, L and V) Canadian Equity Funds IA Clarington Canadian Conservative Equity Fund (Series A, F, F5, I, L, L5, O and T5) IA Clarington Canadian Conservative Equity Class* (Series A, E, E5, F, F5, FE, FE5, L, L5, P, P5 and T5) IA Clarington Canadian Dividend Fund (Series A, F, F6, I, T6 and X) IA Clarington Canadian Growth Class* (Series A, F, I and O) IA Clarington Canadian Leaders Class* (Series A, F, I, L and O) IA Clarington Canadian Small Cap Fund (Series A, E, F, FE, I, L, O and P) IA Clarington Canadian Small Cap Class* (Series A, E, F, FE and P) IA Clarington Dividend Growth Class* (Series A, E, E6, F, F6, F10, FE, FE6, I, L6, L10, O, P, P6, T6 and T10) IA Clarington Focused Canadian Equity Class* (Series A, E, E5, EX, EX5, F, F5, FE, FE5, I, L, L5, O, P, P5 and T5) IA Clarington Inhance Canadian Equity SRI Class* (Series A, E, F, FE, L, I and V) IA Clarington North American Opportunities Class* (Series A, E, F, FE, I, L and P) IA Clarington Strategic Equity Income Fund (Series A, E, E6, F, F6, I, L, L6, O, T6 and Y) IA Clarington Strategic Equity Income Class* (Series A, E, E6, F, F6, FE, FE6, L, L6, L8, P, P6, T6 and T8) Global & U.S. Balanced Funds IA Clarington Global Growth & Income Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, P, P5 and T5) IA Clarington Global Tactical Income Fund (Series A, E, E6, F, F6, F8, FE, FE6, I, L, L6, L8, O, P, P6, T6 and T8) IA Clarington Global Tactical Income Class* (Series A, F, F6, F8, L, L6, L8, T6 and T8) IA Clarington Strategic U.S. Growth & Income Fund (Series A, E, E6, F, F6, FE, FE6, I, L, L6, L8, O, P, P6, T6 and T8) Global Equity Funds IA Clarington Global Equity Fund (Series A, E, F, F6, FE, L, L6, I, O, P, T6 and T8) IA Clarington Global Opportunities Fund (Series A, E, F, I, L and O) IA Clarington Global Opportunities Class* (Series A, E, EX, F, FE, L, T6 and T8) IA Clarington Global Value Fund (Series A, E, F, F6, FE, I , L, L6, O and T6) IA Clarington Inhance Global Equity SRI Class* (Series A, E, F, FE, I, L and V) U.S. Equity Funds IA Clarington Focused U.S. Equity Class* (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O, P, P5 and T5) IA Clarington Sarbit Activist Opportunities Class* (Series A, E, F, FE, I and P) IA Clarington Sarbit U.S. Equity Fund (Series A, E, F, F6, FE, I, L, L6, O, P and T6) IA Clarington Sarbit U.S. Equity Class (Unhedged)* (Series A, E, F, F6, FE, L, L6, P and T6) IA Clarington U.S. Dividend Growth Fund (Series A, E, F, F6, FE, I, L, L6, O, P and T6) IA Clarington U.S. Dividend Growth Registered Fund (Series A, E, F, FE, L and P) Distinction Portfolios Distinction Balanced Class* (Series A, I, L, LM, M and O) Distinction Bold Class* (Series A, I, M and O) Distinction Conservative Class* (Series A, I, L, LM, M and O) Distinction Growth Class* (Series A, I, L, LM, M and O) Distinction Prudent Class* (Series A, I, M and O) Managed Portfolios IA Clarington Balanced Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) IA Clarington Conservative Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) IA Clarington Growth Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) IA Clarington Maximum Growth Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) IA Clarington Moderate Portfolio (Series A, B, B5, E, E5, F, F5, FE, FE5, L, L5, and T5) Forstrong Funds Forstrong Global Strategist Balanced Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O and T5) Forstrong Global Strategist Growth Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O and T5) Forstrong Global Strategist Income Fund (Series A, E, E5, F, F5, FE, FE5, I, L, L5, O and T5 *each a class of shares of Clarington Sector Fund Inc. Additional information about the Funds is available in the Funds’ Annual Information Form, Fund Facts, management reports of fund performance, if any, and financial statements. These documents are incorporated by reference into this Simplified Prospectus, which means that they legally form part of this document just as if they were printed as a part of this document. You can get a copy of these documents, at your request and at no cost, by calling us toll free at 1-800-530-0204 or from your dealer or by e-mail at [email protected]. These documents and other information about the Funds, such as information circulars and material contracts, are also available on IA Clarington Investments Inc.’s Internet site at www.iaclarington.com or are available at the Internet site of SEDAR (the System for Electronic Document Analysis and Retrieval) at www.sedar.com. Manager of the IA Clarington Funds IA Clarington Investments Inc. Business Office 522 University Avenue, Suite 700 Toronto, Ontario M5G 1Y7 1-800-530-0204 Head Office 1080 Grande Allée Ouest P.O. Box 1907 Québec City, Québec G1K 7M3 www.iaclarington.com
