Transcript GRIPS Wholesaler Training Presentation

Introducing
Take your retirement plan
off pause and hit play
John Smith
November 2013
Agenda
• Realities you face before and during retirement
• How G5|20 Series addresses retirement risks
• The benefits and flexibility of G5|20 Series
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What realities are you facing today,
before and during retirement?
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Retirement risks
If you are preparing for or are in retirement, you face several risks:
• Losing a portion of your savings.
• Outliving your money.
• The erosion of your buying power caused by inflation.
• The opportunity cost of staying out of the market.
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Equities play an important role in your portfolio
• Historically, equities have been the key driver of superior long-term returns.
• For the 10 years ending December 31,2012, the average annual total return of
the S&P/TSX Composite Index was 9.2% and 5.9% for DEX Universe Bond Index.
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Managing market volatility is key
• A low-volatility approach to equity investing contributes to long-term
sustainability of your portfolio so your savings are there when you
need them most.
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How have investors responded in the past?
• Investors have historically chosen security over potentially higher returns.
This approach made sense when interest rates were not at near historic lows.
Fund Flow
December 2000
Equity
Fixed Income
Balanced
June 2012
Money Market
Real Estate
Source: Investor Economics Inc.
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Interest rates are expected to continue at
extremely low levels
• It will be more challenging to live off the interest earned from GICs.
Source: Bloomberg
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It’s important to understand the math behind GIC rates
• Taking into consideration taxes and inflation, GICs are netting negative
real rates of return, forcing investors to redeem from their savings.
Based on average 1-year GIC rate, top marginal tax rate of 46.4% for Ontario and the annual rate of inflation.
Source: Bank of Canada, Statistics Canada
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How do you address the current realities and
take your retirement plan off pause?
Retirement risk
• How can you protect your assets from inflation risk?
• How can you maintain your standard of living?
Market risk
• How do you protect your retirement nest egg from market volatility?
• How can you draw cash flow and grow your money at the same time?
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How does your retirement strategy address
today’s market realities?
Regardless of market conditions, if you are preparing for retirement, you
require a solution that delivers:
• Guaranteed cash flow to take you through retirement – similar to a
defined benefit pension plan.
• Capital protection.
• Participation in the equity market for growth potential.
• Lower volatility.
• Liquidity.
• Protection from loss of purchasing power.
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Guaranteed
20 Years Cash Flow
5% Cash Flow
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G5|20 Series is designed specifically for retirement
• Guarantees predictable, sustainable, 5% cash flows to help maintain
your lifestyle.
• Growth potential by participating in equity markets, to offset inflation
and portfolio sustainability risks.
• Low-volatility strategy to reduce large negative market fluctuations
on your assets before and during retirement.
• Optimized performance to provide a residual value at the end of the
fund’s 25-year term.
• The fund is flexible, allowing you to lock in gains from current
portfolio values.
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Why G5|20 Series
• It may be impossible to sustain cash flow without a guarantee.
5.00%
7.39%
7.69%
7.37%
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How G5|20 Series addresses retirement risks
Investors preparing for retirement face these risks:
• Portfolio volatility – the investment strategy reduces volatility, a
benefit that is passed to you daily in the valuation of the fund.
• Outliving your money – this risk is offset by guaranteeing 20
years of guaranteed cash flow. The fund’s equity participation
contributes to a residual amount at the end of the fund’s life span.
• Inflation – the equity exposure provides opportunities for growth,
which can minimize inflation’s erosion of your buying power.
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G5|20 Series provides exposure to equity markets
without risking the loss of your investment
• How your guaranteed cash flow is determined.
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CI’s teams of experts offer a solution tailored for
today’s retirement needs
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CI Investments
• G5|20 Series is structured as a mutual fund trust and is actively
managed by CI Investment Consulting.
• Managed like a tactical balanced fund to take full advantage of
market opportunities.
• Initially, the fund is approximately 70% equity and 30% income.
• Low-volatility investment strategy is always employed on the fund’s
equity exposure.
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Why CI: Access to award-winning portfolio managers
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The G5|20 Series strategy: benefits of low-volatility
equity exposure
• Removing investors from the volatility of the markets: historical
representation of 70% S&P 500 Index + 30% Fixed-income versus
G5|20 Series (2008 to 2012).
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Strength of G5|20 Series is its structure,
flexibility and liquidity
• Cash flow guarantee is part of the fund’s investment objective,
as outlined in prospectus.
 No product features can be changed or removed.
 Fees cannot be increased.
• Growth potential – in contrast to a GIC.
• Simplicity of administration and reporting.
• Liquidity of a mutual fund.
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Thank you
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund
investments. Please read the prospectus before investing. Except as described below, mutual funds are not
guaranteed, their values change frequently and past performance may not be repeated. Bank of Montreal guarantees
that, following the five-year Accumulation Phase of the fund, an amount equal to the greater of the net asset value per
unit or the original amount you paid for the unit will be paid back to you over a 20-year period in equal monthly
instalments. This guarantee does not apply to units redeemed before the end of that period. You will receive the net
asset value per unit for any unit redeemed early. Mutual fund securities are not covered by the Canada Deposit
Insurance Corporation or by any other government deposit insurer.
BMO Financial Group and Bank of Montreal are marketing names (also referred to as trade names or brand names)
used by Bank of Montreal. “BMO”, “BMO Financial Group”, “BMO (M-bar roundel symbol) Financial Group”, “Bank of
Montreal” and “BMO Capital Markets” are trademarks owned by Bank of Montreal.
Nexus Risk Management and the Nexus Risk Management logo are trademarks of Nexus Risk Management.
®CI Investments, the CI Investments design, Cambridge, Harbour Advisors and Harbour Funds are registered
trademarks of CI Investments Inc. ™Signature Funds, Signature Global Asset Management, G5|20 Series, the G5|20
Series design and CI Guaranteed Retirement Cash Flow Series are trademarks of CI Investments Inc. Cambridge
Global Asset Management is a business name of CI Investments Inc. used in connection with its subsidiary, CI Global
Investments Inc. Certain portfolio managers of Cambridge Global Asset Management are registered with CI
Investments Inc.
Lipper Fund Awards are given by Lipper, Inc. to recognize funds that have provided superior consistency and riskadjusted returns when compared to a group of similar funds. Awards are given to the fund with the highest value within
its category for the time periods of one, three five and 10 years according to the Lipper Leader ratings for Consistent
Return, which reflect funds’ historic returns, adjusted for volatility, relative to peers. Lipper Leader ratings change
monthly. For more information, see lipperweb.com. The Lipper Fund Awards are part of the Thomson Reuters Awards
for Excellence. For more information, visit excellence.thomsonreuters.com.
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