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Report Card
Quarter Ending December 31, 2013
Date: <Date>
Compliments of:
Prepared for:
<Advisor Name>
<Client Name(s)>
<Address>
<City>, <Prov>
<Postal Code>
IPC Investment Corporation or
IPC Securities Corporation
<Street Address>
<City>, <Prov>, <Postal Code>
Phone: <Telephone Number>
Email: <Email address>
Website: www.ipcc.ca
The Report Card provides a comprehensive review of past, current and potential factors that may impact your
investments. Our goal is to continuously monitor your investments to help you meet your financial objectives.
About This Report
•
Comments in Report Card refer to last three and 12 months.
•
Market discussions related to indices and do not analyze or reflect personal
investments.
•
We review performance, risk management and overall effectiveness of each subadvisor and underlying fund manager.
•
Counsel investment solutions adopt a long-term approach to investing. Each portfolio
solution diversified to reflect appropriate:
– Asset mix
– Geographic allocation
– Investment style
•
Benchmarks for each Counsel investment solution can be found at end of
presentation.
Agenda
1. Market and economic overview
2. What our investment specialists say
3. Review of Counsel investment solutions
4. Benchmarks and Disclaimers
1. Market and Economic Overview
Global Stock Markets: Index Movements
• Quantitative easing (QE)
continues to influence
• Leaders: U.S. and Japan,
United Kingdom and
Germany – (QE’ing frenzy)
• Mediocre: rest of Europe
(sense of recovery)
• Laggards: China, Brazil (no
QE in place – makes
commodities weaker; this
impacts on commodity
based countries like Canada
and Australia)
• Biggest risk is “recency bias”
Performance is calculated using local currency. Data as at: December 31, 2013
Source: Morningstar Direct, Counsel Portfolio Services
1 Year
A bi-polar world – those that QE and those that don’t
Source: Morningstar
• QE + low rates: helped equities (Risk ON)
• Fears of reduction in QE: hurt Fixed Income (Risk OFF)
3 Months
12.00
10.00
8.00
6.00
4.00
2.00
0.00
October-13
S&P/TSX Composite TR
November-13
S&P 500 TR CAD
December-13
MSCI EAFE GR CAD
DEX Universe
Source: Morningstar
• The fear of large tapering is off the table – equities breathed a large sigh of relief.
• The concern is that much of the rise in the equity markets is based on low volumes and
large margin debt.
Canadian Dollar Performance
CAD vs. U.S. Dollar
CAD vs. Euro
1.04
0.8
1.02
0.78
0.76
1
0.74
0.98
0.72
0.96
0.7
0.94
0.68
0.92
0.66
0.9
0.64
Source: Bank of Canada
• China slowing and the Iran/U.S. accord meant oil and geographic risks were lower – this
impacted commodity based countries like Canada.
• U.S. prospects seemingly looking better helped the U.S. dollar vs. Canadian dollar.
• Stability in Europe (no more scares from the weaker nations) helped the euro vs. the
Canadian dollar.
• Bank of Canada governor has stated that a lower Canadian dollar will support exports –
can expect Canadian dollar to go lower.
12/31/2013
11/30/2013
10/31/2013
9/30/2013
8/31/2013
7/31/2013
6/30/2013
5/31/2013
4/30/2013
3/31/2013
2/28/2013
1/31/2013
0.62
12/31/2012
12/31/2013
11/30/2013
10/31/2013
9/30/2013
8/31/2013
7/31/2013
6/30/2013
5/31/2013
4/30/2013
3/31/2013
2/28/2013
1/31/2013
12/31/2012
0.88
Canada: Equities Vs. Bonds
Short-term: Equities vs. Bonds
Long-term: Equities vs. Bonds
16.00
14.00
14.00
12.00
12.00
10.00
10.00
8.00
8.00
6.00
6.00
4.00
4.00
2.00
2.00
0.00
1 Month
3 Month
6 Month
-2.00
DEX Universe
S&P/TSX Composite TR
1 Year
0.00
3 Year
5 Year
10 Year
DEX Universe
S&P/TSX Composite TR
15 Year
20 Year
Source: Globe and Mail
• The fear of tapering hurt bonds – it’s the uncertainty of what might happen.
• Yields in equities are greater than fixed income, hence the move to higher yielding equities.
• Canadian equities also moved up with the momentum of U.S. equities.
• Fixed income is not only a yielding component of a portfolio but is also an important
diversification tool. There is almost always a place for fixed income.
Canadian Market Overview
Market Cap
Investment Style
S&P TSX 60 Total Return
MSCI Canada Growth Index
S&P TSX Completion Total Return
MSCI Canada Value Index.
S&P TSX Small Cap Total Return
Source: Morningstar Direct
Source: Morningstar Direct
•
Materials - Commodities, especially gold was
hurt by the increasing U.S. Dollar.
•
Utilities were hurt because the yields are lower.
•
The rest of the market was strong, mainly on the
back of buoyancy in the U.S. market.
Year-on- Year-toYear
date
Energy
13.32
13.32
Materials
-29.11
-29.11
Industrials
37.55
37.55
Consumer Discretionary
43.04
43.04
Consumer Staples
23.57
23.57
Healthcare
44.20
44.20
Financials
26.78
26.78
Info. Technology
36.12
36.12
Telecom Services
11.38
11.38
Utilities
-4.44
-4.44
Market Sector
Q4
2013
4.19
-1.98
16.28
7.96
4.08
9.29
10.69
8.78
5.97
3.06
U.S. Market Overview
Investment Style
Market Cap
S&P 500 Total Return
Russell 1000 Value Index
S&P Mid Cap 400 Total Return
Russell 1000 Growth Index
S&P Small Cap 600 Total Return
Source: Morningstar Direct
Source: Morningstar Direct
•
Obamacare helped boost Healthcare stocks,
especially the insurers.
•
Liquidity has been the wind behind the sails of the
U.S. economy.
•
Utilities and telecom services performed the
weakest because of their lower yields.
Year-on- Year-to- Q4
Year
date
2013
Energy
22.27
22.27
7.74
Materials
22.73
22.73 10.05
Industrials
37.63
37.63 12.92
Consumer Discretionary
40.96
40.96 10.37
Consumer Staples
22.68
22.68
7.89
Healthcare
38.74
38.74
9.60
Financials
33.21
33.21
9.82
Info. Technology
26.23
26.23 12.75
Telecom Services
6.49
6.49
4.17
Utilities
8.75
8.75
1.78
Market Sector
Returns measured in U.S. dollar terms
International Market Overview
Investment Style
• Japan was boosted by their own
version of QE, in fact they are ‘QE on
steroids’, putting approximately $225
billion instead of the U.S.’s $85 billion
into monthly purchases.
• China had a marked slowdown that
impacted other countries, especially
the commodity producing countries
like Brazil.
• The QE tapering discussion hurt
emerging market bonds.
• Gold was affected by slowing global
growth and a rising perception of U.S.
growth.
MSCI EAFE Value
MSCI EAFE Growth
Source: Morningstar Direct
Year-on- Year-toQ4
Year
date
2013
Energy
18.84
18.84
6.99
Materials
3.91
3.91
4.44
Industrials
32.80
32.80
9.32
Consumer Discretionary
39.80
39.80
8.33
Consumer Staples
22.03
22.03
6.12
Healthcare
37.06
37.06
9.02
Financials
27.95
27.95
7.81
Info. Technology
29.30
29.30
11.97
Telecom Services
32.37
32.37
9.90
Utilities
13.73
13.73
2.15
Market Sector
Returns measured in Canadian dollar terms
Recency Bias
• Definition: the tendency of people to place too much
weight on the most recent events.
• What just happened will keep happening.
• Events from the past might be less important.
Example: an Earthquake occurs.
People change their buying habits based on the fact
that they recently experienced an earthquake; they
might buy too many earthquake supplies even
though strong earthquakes are quite rare.
This market was brought to
you by the letters Q & E
It was all about Q & E
QE
Despite all the things thrown at it – S&P 500 moved up as if made from Teflon
Source: MYRA Capital
Range-Bound Markets are Typical
U.S. Stock Market
13 Years
• Markets have been
range-bound in 109
of the last 144 years
• Secular bull runs are
a rarity; not the norm
• After major bull
markets, markets
trend sideways for a
minimum of 15 years
SOURCE: Sionna Investments
13 years into this consolidation market – best one before this was 15
years – so have about 4 years left in this range bound market
18
Inflation Adjusted Market Is Not At New Highs
Markets have not
broken a record
when inflation is
taken into account
19
Source: Gary Shilling’s Insight January 2014
Margin Debt is getting
to concerned levels
Chart to Jan 9. 2014
Source: STAWEALTH.COM
Trading volumes have been trending lower,
suggesting new buyers may be scarce.
Only the Tech era had higher P/E’s
(NTM – Next Twelve Months)
Bear Arguments
1. Fed quantitative easing is over
2. Interest rate rise will kill rally
3. Growth is too weak
4. Corporate profit margins are peaking
5. Business cycle/bull market is getting old
6. Dysfunction remains in Washington
7. A hard landing in China may occur
8. Stocks are in a bubble (valuations too high)
Benign, if Not Bullish for Stock Prices
• Monetary Ease (Dovish Fed)
• Fiscal Restraint (Falling Deficit)
Big Themes for 2014
• Economic Recovery
• Obamacare
• Further Fiscal Restraint
• Loss of Global Prestige
• Mid-Term Elections
2. What our Investment Specialists say
Canadian Dividend Equities
As we look ahead to 2014, we expect another solid year for the
Canadian equity market, but are more cautious on the U.S. market
given the rapid price appreciation of the last two years. We believe
the U.S. economy is poised to accelerate as the private sector is finally
strong enough to withstand stimulus withdrawal and still post 3%+ GDP
growth.
Canadian Quantitative Growth Equities
Commodities have been a drag on the resource laden Canadian
equity market this past year. With the expected improvement in global
growth, the free fall in commodity prices should moderate. This
assumes no adverse change to China’s current level of GDP growth. Gold
remains a concern as investors appear to no longer need the safety gold
typically offers due to the improved growth outlook and lack of
geopolitical/financial turmoil.
North American economies will continue to show signs of
improvement. In the U.S., recent gains in housing, consumer confidence
and manufacturing will sustain growth going forward. Canada will be a
net benefactor from the strengthening U.S. economy. A weaker
Canadian dollar will also contribute to Canada’s growth through improved
exports.
Global Fixed Income
Despite the relatively strong fundamental outlook in many emergingmarket countries, we believe the emerging-market asset class is likely
to see broad-based bouts of elevated volatility surrounding the issue of
Fed tapering. We believe that selecting countries with relatively good
fundamentals, avoiding countries with poor fundamentals, and actively
managing risk within emerging markets may prove more successful than a
passive allocation to emerging markets as an asset class.
Global Dividend
For Europe, the challenges of divergent economic profiles being
managed under a singular monetary authority remain at the forefront.
Although many euro zone nations, especially the weaker southern
European countries, appear to be on more solid economic footing,
having returned to modest growth, the frailty of those recoveries
and weakness in France's large economy are likely to keep
European GDP only modestly positive.
Global Real Estate
From a real estate perspective the supply side remains limited. Even
though the availability of real estate financing was relaxed during 2013
and is more readily available than a year before, particularly in Europe
which is still undergoing the deleveraging process, we expect
development capacity to be very specific and de-risked, and we do
not expect that targeted development activity would bring supply out
of balance.
U.S. Small Cap
Equity markets have risen consistently over the past year, with a number
of market indices approaching record highs. Investors have bid up
equity valuations on signs that the global economy was
strengthening and on relief that the U.S. Federal Reserve Board would
use a measured approach in tapering its quantitative-easing program. The
portfolio management team believes rising equity markets have led
to an increase in valuation of many businesses, which may not be
warranted.
Canadian Small Cap
Our outlook for the Canadian small cap sector remains positive. With
global economies on a firmer footing, we would expect many
companies to benefit from improved demand for their products and
services, leading to growth in earnings and cash flows. Should the
economy be in a self propelling recovery, this should give the U.S. Fed the
leeway to engage in further tapering of Quantitative Easing without
alarming investors too much.
U.S. Growth Equities
We expect a slightly better backdrop for the U.S. In addition, we
expect to see continued economic improvement in Europe and China
which should have a positive effect on the global economy. With a
more constructive macro outlook, an investment posture that increases
the portfolio’s exposure to companies that are leveraged to global growth
may be appropriate. We continue to focus on companies with
dependable solid top-line growth and visible earnings streams.
3. Review Of Counsel Investment Solutions
Counsel Balanced Portfolio
Mandate
Canadian short term fixed income
Fixed income
Canadian value equities
Canadian growth equities
U.S. value equities
U.S. growth equities
International value equities
International growth equities
Global small cap
Global real estate
Target Allocation
(Oct 2009)*
n/a
40.00%
8.00%
8.00%
7.50%
7.50%
7.50%
7.50%
8.00%
6.00%
Current Target Allocation*
7.00%
33.00%
7.75%
7.75%
7.00%
7.00%
7.00%
7.00%
10.50%
6.00%
* Target asset allocation weights adjusted following annual review of Counsel portfolios and with the renewal of the Simplified Prospectus.
This Portfolio is managed using a multi-manager process. The current sub-advisor or underlying mutual fund manager for each mandate is listed beside the mandate for which it provides portfolio
management / sub-advisory services. This Portfolio invests in underlying mutual funds (which may be managed by Counsel) currently sub-advised by the sub-advisors listed beside each investment
mandate. For information on the underlying funds, please refer to the Simplified Prospectus, which is available on our website
at www.counselservices.com or on the SEDAR website at www.sedar.com.
Counsel Balanced Portfolio
Effective Asset Class Mix
Effective Geographic Mix
Effective Top 10 Sector Allocation
Counsel Balanced Portfolio
Performance (%)
Compound Returns vs. Benchmark
Period
Series 'A'
Net Benchmark*
Incept.
Incept.
1 mth
3 mth
6 mth
1 yr
3 yr
5 yr
10 yr
Return
Date
0.92
1.22
5.63
6.76
8.95
9.97
14.56
18.38
6.12
8.98
9.01
7.98
4.43
4.10
4.30
3.11
1/15/02
U.S.
growth Int'l value
equities equities
+
+
Int'l
growth
equities
+
Positive and negative attribution for Q4 2013
Mandate
Attribution
Canadian
short term
fixed income
+
Fixed
income
+
Cdn
value
equities
-
Cdn
growth
equities
+
U.S.
value
equities
+
Global
small
cap
-
Global
Portfolio
real
Design &
estate Construction
+
-
Positive and negative attribution for the 12 months ended December 31, 2013
Mandate
Attribution
Canadian
short term
fixed income
+
Fixed
income
+
Cdn
value
equities
+
Cdn
growth
equities
+
U.S.
value
equities
+
U.S.
growth Int'l value
equities equities
+
+
Int'l
growth
equities
-
Global
small
cap
+
Global
Portfolio
real
Design &
estate Construction
-
+
Positive attribution to overall Portfolio, reflecting that the mandate outperformed its relative benchmark on a gross returns basis.
-
Negative attribution to overall Portfolio, reflecting that the mandate underperformed its relative benchmark on a gross returns basis.
Counsel Short Term Bond
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
3 yr
5 yr
10 yr
Series 'A'
Net Benchmark*
-0.17
-0.15
0.49
0.57
0.74
1.07
0.44
0.99
1.64
2.04
n/a
n/a
n/a
n/a
Effective Investment Mix
Incept.
Incept.
Return
Date
1.61
2.29
1/25/10
Effective Bond Maturity
Counsel Short Term Bond
Contributors
Q4
• Security selection in the Financial
sector
• Incremental yield associated with
the overweight exposure to
corporate credit
Past 12
months
• Incremental yield associated with
the overweight exposure to
corporate credit
• Security selection, particularly in
financial and communication
sectors
Detractors
• Negative impact from yield curve
positioning, as the shortest
sections of the yield curve moved
down and the 4-6 year section
moved up
NA
Counsel Fixed Income
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
3 yr
5 yr
10 yr
Series 'A'
Net Benchmark*
-0.26
-0.50
0.64
0.18
1.07
0.10
-0.78
-1.99
2.75
3.13
4.50
3.98
4.15
4.36
Effective Investment Mix
Incept.
Incept.
Return
Date
5.36
5.08
5/31/01
Effective Bond Maturity
Canadian Core Fixed Income
Contributors
Q4
•
•
•
Overweight in corporate bonds
Overweight in BBB-rated corporate
bonds
Shorter-than-index duration
Detractors
•
•
Tactically reducing provincial bond
exposure into a rallying provincial bond
market hurt performance
Overweight position in mid-term bonds
High Yield Fixed Income
Contributors
Q4
•
•
•
Past 12
months
• Rite Aid Corp.
• First Data Corp.
• Intelsat Investments SA
First Data Corp.
Sprint Communications
Valeant Pharmaceutical
International
Detractors
•
•
•
Bombardier Inc.
Quebecor Inc.
Lone Pine Resources
Inc.
•
•
Bombardier Inc.
First Quantum Minerals
Ltd.
Lone Pine Resources
Inc
•
Strategic Shifts
• Increased Technology and
Transportation
• Reduced Paper & Packaging
Global Fixed Income
Contributors
Q4
• In Q4 2013, the portfolio’s currency
positions led positive absolute
performance, followed by sovereign
credit exposures and interest-rate
strategies
• The portfolio’s currency positions in
Asia ex-Japan added to results. The
portfolio’s positions in peripheral
European currencies against the euro
also benefited absolute results
• Select duration exposures in Europe
added to results
Detractors
In Q4 2013, there were no significant
detractors from absolute performance
Counsel Canadian Value
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
Series 'A'
Net Benchmark*
1.38
1.89
5.80
6.98
10.51 12.54
13.38 11.74
3 yr
5 yr
10 yr
3.71
2.15
n/a
n/a
n/a
n/a
Contributors
Incept.
Incept.
Return
Date
10.49
11.51
01/14/09
Detractors
Strategic Shifts
Q4
• Methanex Corporation
• Thomson Reuters
Corporation
• Silver Wheaton Corp.
• Empire Co. Ltd. Class A
• Central Fund of Canada
Limited Class A
• Canadian Pacific Railway
Overweight sectors
• Financials
• Energy
• Consumer Discretionary
• Consumer Staples
Past 12
months
• Methanex Corporation
• Thomson Reuters
Corporation
• Canadian Tire Corporation,
Limited Class A
• Central Fund of Canada
Limited Class A
• Valeant Pharmaceuticals
International, Inc.
• Barrick Gold Corporation
Underweight sectors
• Materials
• Industrials
• Telecommunication
Services
• Information Technology
• Health Care
Counsel Canadian Value
Effective Asset Class Mix
Effective Top 10 Sector Allocation
Counsel Canadian Growth
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
Series 'A'
Net Benchmark*
1.50
1.89
7.35
6.98
12.98 15.41
13.38 11.74
3 yr
5 yr
10 yr
2.72
2.15
n/a
n/a
n/a
n/a
Effective Asset Class Mix
Incept.
Incept.
Return
Date
11.10
11.51
01/14/09
Effective Top 10 Sector Allocation
Canadian Growth Equities
Contributors
Q4
•
•
•
Past 12
months
•
•
•
Detractors
Strategic Shifts
Positioning in the Consumer
Discretionary
Positioning in the Materials
sector
Canadian Tire Corp was the
top individual relative
contributor
• Positioning in the Financials
Sector
• Positioning in the Consumer
Staples Sector
• Potash Corp of Saskatchewan
was the largest individual
relative detractor
We reduced our underweight
position in materials and energy
during the quarter. We also
reduced our cash position.
Positioning in the Consumer
Discretionary sector
Positioning in the Materials
Sector
Top individual contributors
were Barrick Gold Corp.,
Magna International and
Canadian Tire Corp.
•
•
•
Positioning in the Financials
Sector
Positioning in the Telecom
Sector
Positioning in Bank of
Montreal, New Gold and Silver
Wheaton were the largest
individual detractors from
relative performance
Overweight sectors
We are positioned for continued
cyclical growth led by the U.S.
economy by being overweight
cyclical sectors (particularly nonresource cyclical).
Underweight sectors
We are underweight in interest
rate sensitive groups as we
expect interest rates to continue
to rise gradually as global growth
improves and Monetary Policy
becomes less accommodative.
Canadian Quantitative Growth Equities
Q4
Past 12
months
Contributors
Detractors
• Constellation Software
Inc.
• Methanex Corporation
• Enerplus Corporation
• CGI Group Inc.
• Stantec Inc.
• Canadian Pacific Railway
• Methanex Corporation
• Valeant
Pharmaceuticals
International Inc.
• Magna International
Inc.
• Agnico-Eagle Mines
Limited
• Franco-Nevada
Corporation
• Canadian Pacific Railway
Strategic Shifts
The strategy is based purely
bottom up stock selection,
sector changes are a residual
of stock selection.
Sector exposure moved from
six to seven with the addition of
industrials and consumer
staples and the elimination of
financials. Sector exposure
until the February 28th
rebalancing will consist of
Energy, Materials, Industrials,
Consumer Discretionary,
Consumer Staples, Health
Care, and Information
Technology.
Counsel U.S. Value
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
3 yr
5 yr
10 yr
Series 'A'
Net Benchmark*
2.08
2.80
18.22
13.41
22.10
14.56
47.76
40.22
14.73
17.48
n/a
n/a
n/a
n/a
Contributors
Q4
Past 12
months
Incept.
Incept.
Return
Date
16.71
13.91
01/14/09
Detractors
• Valero Energy Corporation
• Marathon Petroleum
Corporation
• Tesoro Corporation
• Safeway Inc.
• Murphy USA, Inc.
• Berkshire Hathaway Inc.
• Safeway Inc.
• Seagate Technology PLC
• Western Digital Corporation
• D.R. Horton, Inc.
• L-3 Communications
Holdings, Inc.
• McCormick & Company,
Incorporated
Strategic Shifts
There were no sector
allocation shifts during
the fourth quarter.
Counsel U.S. Value
Effective Asset Class Mix
Effective Top 10 Sector Allocation
Counsel U.S. Growth
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
3 yr
5 yr
10 yr
Series 'A'
Net Benchmark*
2.66
3.13
14.07
13.85
18.07
19.65
41.61
41.24
15.02
17.88
n/a
n/a
n/a
n/a
Contributors
Q4
Past 12
months
Incept.
Incept.
Return
Date
15.12
16.73
01/14/09
Detractors
Strategic Shifts
• Pharmaceuticals Biotechnology &
Life Sciences Industry – Gilead
Sciences and Biogen Idec
• Software & Services Industry –
Google and Visa
• Consumer Services Industry –
Wynn Resorts, Starwood Hotels &
Resorts Worldwide, and Chipotle
Mexican Grill.
• Cash - 5% of average net assets
dampened performance as the
benchmark index returned +10.5%
• Consumer Durables & Apparel Industry –
Lululemon Athletica
• Food Beverage & Tobacco Industry –
Green Mountain Coffee Roasters.
The portfolio reduced its
allocation to Financials
from 14% to 9% due
primarily to the sale of
Wells Fargo and paring of
our AIG position.
• Pharmaceuticals Biotechnology &
Life Sciences Industry – Gilead
Sciences and Biogen Idec
• Consumer Services - Wynn
Resorts, Chipotle Mexican Grill and
Starbucks Corp.
• Information Technology – Google,
Facebook Inc. and Visa Inc.
• Cash - 5% of average net assets
dampened performance as the
benchmark index returned +32%
• Industrials – In aggregate, the portfolio’s
holdings in the sector returned +32% but
underperformed the +41% sector return
in the benchmark index; in particular,
Precision Castparts Corp. and Cummins
Inc. lagged.
• Food Beverage & Tobacco Industry –
Green Mountain Coffee Roasters
Additionally, Industrials
were reduced from 11% to
9% due primarily to the
sale of Union Pacific.
The portfolio increased
sector allocations
modestly in Consumer
Discretionary Health Care
and Energy.
Counsel U.S. Growth
Effective Asset Class Mix
Effective Top 10 Sector Allocation
Counsel International Value
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
3 yr
5 yr
10 yr
Series 'A'
Net Benchmark*
0.50
1.17
8.08
6.53
18.73
15.36
31.25
26.29
7.27
8.70
n/a
n/a
n/a
n/a
Contributors
Q4
Past 12
months
• ING Groep NV
• PostNL NV
• Aryzta AG
Net Euro exposure via
securities and cash balance
net of hedge helped portfolio
performance
• Nokia OyJ
• Renault SA
• ING Groep NV
On an annual basis net of the
currency hedge appreciation
of the Euro vs. Canadian
dollar was beneficial.
Incept.
Incept.
Return
Date
9.25 01/14/09
11.48
Detractors
• Henderson Land Development
Canadian dollar weakness against
most currencies, particularly the
Euro, hurt the portfolio via
currency hedge. Hedge levels
were scaled back for all
currencies except the Yen,
mitigating the loss potential
• Canon Inc
• Henderson Land Development
The currency hedge program hurt
the portfolio as a whole in 2013,
the only exception being the
Japanese Yen as the Yen
weakened in 2013, in this case
the hedge helped.
Strategic Shifts
Industrials
Financials
Cons. Discretionary
Cons. Staples
Energy
Materials
Information Technology
Telecom. Services
0.42%
-1.93%
-4.96%
1.64%
2.01%
-0.13%
-1.69%
0.22%
Changes are stock specific and
not done to specifically over or
underweight sectors.
Counsel International Value
Effective Asset Class Mix
Effective Top 10 Sector Allocation
Counsel International Growth
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
3 yr
5 yr
10 yr
Series 'A'
Net Benchmark*
2.05
1.89
8.13
8.36
14.82
16.38
21.55
29.79
9.70
9.38
n/a
n/a
n/a
n/a
Effective Asset Class Mix
Incept.
Incept.
Return
Date
13.21
9.76
01/14/09
Effective Top 10 Sector Allocation
Counsel Global Real Estate
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
3 yr
5 yr
10 yr
Series 'A'
Net Benchmark*
0.41
0.43
2.18
2.46
1.55
1.87
6.17
9.79
6.70
8.99
n/a
n/a
n/a
n/a
Contributors
Incept.
Incept.
Return
Date
11.47
13.58
01/14/09
Detractors
Q4
• Stock selection in the U.S.
and Canada
• Allocation and stock selection
in Japan
• Stock selection in Western
Europe
• Stock selection in Hong
Kong and China
• Allocation to the United
Kingdom
Past 12
months
• Stock selection and allocation
in the U.S.
• Allocation and stock selection
in Singapore
• Stock selection in Australia
• Cash
• Stock selection in Japan
• Allocation to Latin America
Strategic Shifts
The biggest shift that occurred during
the quarter was an increase in
weighting towards specialty (data
centers) as the portfolio bought into a
small cap data center company QTS
in the U.S. This shift was funded via a
reduction in weighting towards the
industrial sector (via an exit from
Segro in the U. K.).
Counsel Global Real Estate
Effective Asset Class Mix
Effective Geographic Mix
Counsel Global Small Cap
Performance (%)
Compound Returns vs. Benchmark
Period
1 mth
3 mth
6 mth
1 yr
3 yr
5 yr
10 yr
Series 'A'
Net Benchmark*
2.65
2.65
9.33
10.79
17.59
20.26
34.16
40.46
9.65
13.93
17.18
16.34
n/a
n/a
Incept.
Incept.
Return
Date
6.15
5.79
6/6/05
Positive and negative attribution for Q4 2013
Mandate
Attribution
U.S.
Cdn Small small
Cap
cap
+
-
Int'l
small
cap
-
Portfolio
Design &
Construction
+
Positive and negative attribution for the past 12 months ended December 31, 2013
Mandate
Attribution
U.S.
Cdn Small small
Cap
cap
+
-
Int'l
small
cap
+
Portfolio
Design &
Construction
+
+
Positive attribution to overall Portfolio, reflecting that the mandate outperformed its relative benchmark on a gross returns basis.
-
Negative attribution to overall Portfolio, reflecting that the mandate underperformed its relative benchmark on a gross returns basis.
Counsel Global Small Cap
Effective Asset Class Mix
Effective Top 10 Sector Allocation
Canadian Small Cap
Contributors
Detractors
Strategic
Shifts
Q4
• Low weight in mining and metals
- a weak performing sector during
the quarter.
• An overweight allocation to
alternative lenders and asset
managers.
• Auto related stocks were up
significantly in the quarter.
• Paladin Labs was acquired by
Endo Health and was sold at a
54% premium after the
announcement.
• Dundee Precious Metals
• Interest sensitive stocks, such as
Boralex Power, Agellan Commerical
REIT and Dundee Industrial REIT came
under pressure due to fears over rising
interest rates.
• Martinrea International lost 20% of its
value after the company disclosed
misreported financials in the past. The
position was sold out of the portfolio
prior to the announcement mostly due to
concerns over ongoing legal battles and
the potential impact on its operations.
There were no major
sector shifts, but we
were actively
reducing the
portfolio’s exposure
to metals and mining
companies.
Past 12
months
• Low weight in mining and metals
- a very weak performing sector
during the past 12 months.
• Paladin Labs
• CCL Industries
• Winpak
• Western Forest products
• Material stocks such as Dundee
Precious Metals and Major Drilling
• Surge Energy and Angle Energy
U.S. Small Cap
Contributors
Q4
Past 12
months
Detractors
• Alliance Data Systems
Corp. (ADS)
• Alere Inc.
•Global Payments Inc.
• Cash
• ION Geophysical Corp
• Energy sector
• Alliance Data Systems
Corp.
• International Rectifier Corp.
• Alere Inc.
• Cash
• ION Geophysical Corp.
• Energy sector
Strategic Shifts
There were no significant
changes to the sector
allocation within the
portfolio during the period
International Small Cap
Q4
Past 12
months
Contributors
Detractors
Strategic
Shifts
The Information Technology sector was
the largest contributor for the period.
The companies in the portfolio returned,
on average, 5.6% while those in the
benchmark returned, on average, 3.5%.
The portfolio’s top two contributors were
in this sector.
• Oxford Instruments Plc. was up 19% in
the period.
• Infomart Corporation was up over 25%
in the period.
The portfolio is structurally
overweight in the Consumer
Discretionary sector at 25.5%
versus the benchmark at 18.7%.
The securities in the portfolio were
up, on average, 1% while those in
the benchmark were up 1.7%. The
portfolio’s three largest detractors
were in this sector.
• REA Group was down -9.1%
during the period.
• Merida Industry, a Taiwanese
bicycle manufacturer, was down 7.7% during the period.
• United Arrows Ltd. was down 11.2% during the period.
Not applicable as
Wasatch assumed
the investment
management of this
mandate on
November 30, 2013.
Not applicable. Wasatch assumed the investment management of
this mandate on November 30, 2013.
4. Benchmarks and Disclaimers
Net Benchmarks
Net benchmark return is calculated using the actual management expense ratio(s) of the equivalent exchange traded fund(s) and
weighing that/those MER(s) by the benchmark/hybrid benchmark weight(s). The weighted MER(s) is/are then added to a typical retail
management fee of 1%. In February 2009, the typical retail management fee for Counsel Fixed Income was revised from 1% to 0.5%.
Investment Solution
Index
Counsel Conservative Portfolio
60% DEX Universe Bond, 40% MSCI World Total Return
Counsel Regular Pay Portfolio
50% DEX Universe Bond, 20% MSCI World Total Return, 30% S&P/TSX Composite Dividend
Total Return
Counsel Balanced Portfolio
40% DEX Universe Bond, 60% MSCI World Total Return
Counsel Growth Portfolio
20% DEX Universe Bond, 80% MSCI World Total Return
Counsel All Equity Portfolio
100% MSCI World Total Return
Counsel Managed Yield Portfolio
55% DEX Universe Bond Index, 25% JP Morgan Global Government Bond Index, 20% S&P/TSX
Composite Dividend Total Return
Counsel Managed High Yield Portfolio
40% DEX Universe Bond, MSCI AWCI High Dividend Yield, 25% Bank of America Merrill Lynch
Global High Yield & Emerging Market Corporate Bond Total Return
Counsel Income Managed Portfolio
40% DEX Universe Bond, 40% S&P/TSX Composite Dividend Total Return, 20% MSCI World
Total Return
Counsel Managed Portfolio
40% DEX Universe Bond, 15% MSCI World Total Return, 45% S&P/TSX Composite Total Return
Counsel World Managed Portfolio
40% DEX Universe Bond, 60% MSCI World Total Return
Net Benchmarks
Net benchmark return is calculated using the actual management expense ratio(s) of the equivalent exchange traded fund(s) and
weighing that/those MER(s) by the benchmark/hybrid benchmark weight(s). The weighted MER(s) is/are then added to a typical retail
management fee of 1%. In February 2009, the typical retail management fee for Counsel Fixed Income was revised from 1% to 0.5%.
Investment Solution
Index
Counsel Short Term Bond
100% DEX Short Term Bond Index
Counsel Fixed Income
100% DEX Universe Bond Index
Counsel High Yield Fixed Income
70% Bank of America Merrill Lynch U.S. High Yield Master II Total Return, 30% Bank of America
Merrill Lynch Emerging Market Liquid Corporate Plus Total Return
Counsel Canadian Dividend
100% S&P/TSX Dividend Composite Total Return
Counsel Canadian Value
100% S&P/TSX Composite Index
Counsel Canadian Growth
100% S&P/TSX Composite Index
Counsel U.S. Value
100% Russell 1000 Value Index
Counsel U.S. Growth
100% Russell 1000 Growth Index
Counsel International Value
100% MSCI EAFE Value Index
Counsel International Growth
100% MSCI EAFE Growth Index
Counsel Global Dividend
100% MSCI ACWI High Dividend Yield Index
Counsel Global Real Estate
100% FTSE EPRA/NAREIT
Counsel Global Small Cap
100% MSCI World Small Cap Total Return
General Disclaimers
This report may contain forward-looking statements which reflect our current expectations or forecasts of future events. Forward-looking statements include statements
that are predictive in nature, depend upon or refer to future events or conditions, or include words such as: “expects”, “anticipates”, “intends”, “plans”, “believes”,
“estimates”, “preliminary”, “typical” and other similar expressions. In addition, these statements may relate to future corporate actions, future financial performance of a
fund or a security and their future investment strategies and prospects. Forward-looking statements are inherently subject to, among other things, risks, uncertainties
and assumptions which could cause actual events, results, performance or prospects to differ materiality from those expressed in, or implied by, these forward-looking
statements. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors in North America and internationally,
interest and foreign exchange rates, the volatility of global equity and capital markets, business competition, technological change, changes in government regulations,
changes in tax law, unexpected judicial or regulatory proceedings, catastrophic events and the ability of Counsel Portfolio Services to attract or retain key
employees. The foregoing list of important risks, uncertainties and assumptions is not exhaustive. Please consider these and other factors carefully and not place
undue reliance on forward-looking statements.
The forward-looking information contained in this report is current only as of the date of this report. There should not be an expectation that such information will in all
circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the Simplified Prospectus
before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions
and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. The
indices cited are widely accepted benchmarks for investment performance within their relevant regions, sectors or asset class, represent non-managed investment
portfolios, exclude management fees and expenses related to investing in the indices, and are not necessarily indicative of future investment returns. Mutual funds are
not guaranteed, their values change frequently and past performance may not be repeated.
To learn more about Counsel’s investment solutions,
please speak to your Advisor.
Review Checklist
 Your portfolio mix remains consistent
with your risk tolerance.
 Your portfolio mix has been
Insert Advisor name
and details here
rebalanced to your pre-determined
mix (see Portfolio Review).
 Your portfolio’s long-term performance
is acceptable given your investment
strategy and financial objectives.
We are committed to helping you
achieve your financial goals through:
• effective investments
• accountability of all parties
• operating with your objectives and
goals as our guide
 Sub-advisors and underlying fund
managers have been effective in their
respective areas of expertise.
 Do you have any questions or
concerns?
 Is an action plan required?