CIBC Global Asset Management Inc. November 30, 2009 Now Is The Time To Buy Stocks - But Be Selective...

November 30, 2009

CIBC Global Asset Management Inc.

Now Is The Time To Buy Stocks - But Be Selective

Fund Update

David Graham, MBA, CFAVice PresidentCanadian Equity

Craig JerusalimResearch AnalystCanadian Equity

| CIBC Global Asset Management Inc. November 2009

David Graham, CFAVice-President, Portfolio Manager – Canadian EquitiesCIBC GLOBAL ASSET MANAGEMENT

Education/Accreditation

• MBA – York University (Toronto)

• BA – University of Western Ontario (London)

• CFA Charterholder

Background/Experience

David brings to CGAM over 35 years experience with various firms including:

2000-2002 - Senior Equity Analyst; Merrill Lynch Investment Managers

1998-1999 – Analyst; First Marathon Securities Ltd.

1996-1998 – Executive Vice-President, Institutional Sales; Marleau, Lemire Securities Inc.

1991-1996 – Institutional Salesperson; Richard Greenshields Ltd.

1986-1991 – Vice-President, Institutional Equities; McN Mantha Inc.

CIBC Global Asset Management Inc. (CGAM) ranks among Canada’s leading investment managers with over $60B in AUM’s, and has one of the broadest investment management platforms in Canada.

David Graham joined CIBC Global Asset Management in July of 2002. He is responsible for strategy and research and brings extensive experience to the Canadian equities team.

David is the manager of several CIBC and Renaissance Funds with assets totalling over $8 billion.


Portfolio Manager ChangesModest Implications For Our Clients

Source: CIBC Global Asset Management Inc.

Similarities:- Same Value Model- Bottom Up Oriented- Similar Value Style- Sector Agnostic- Dislike Balance Sheet Risk- Incremental Buyers/Sellers- Prefer Mgt Track Record

Differences:- Look For Value + A Catalyst- Use Other Valuation Measures (EV/EBITDA, Price/Cash Flow) As Well As P/E- Add Top Down Sector Selection- Not As Deep Value- Buy New Issues If Value Evident- Use Relative Strength Tools- Will Trade Around Core Positions


Portfolio Manager ChangesModest Implications For Our Clients

Recent Purchases

BCE – solid management, lean & mean, 6% yield

BTE.UN – solid heavy oil trust, 5.6% yield, benefits from narrow oil spreads

Crescent Point – solid management, excellent drill inventory, 7% yield

BMO, NA, RY, TD – bought were Funds less than 5% overweight – like banks in this environment

Recent Sales

IMO – trimmed 20-30 bps – good value but refining side weak

CLC.UN – trimmed 20-30 bps – good value but limited upside

GIB.A – trimmed 20 bps – at our target, took profits

T – owned small position (about 50 bps), switched to BCE


STRONG TEAM STRUCTURE

Value & Income Funds

David Graham

Craig Jerusalim

Research

Frank Settino

Andreas Hoppe

Monique Malo

Fixed Income

John Braive

Jeffery Waldman

Preferreds

Jeffery Waldman

Adam DitkofskyAsset Allocation

Luc de la Durantaye

Core & Dividend

Funds

Domenic Monteferrante

Derivatives

Patrick Thillou

Small Cap Funds

Jennifer Law

Shanthu David

Trading

Kathleen Gregoire

Thomas Litchfield


PORTFOLIO COMMENTS HOW WE CHOOSE OUR STOCKS

40-60 Stock

Universe

500 Stock Universe

Book Value

Normalized historical ROE

Normalized historical P/E

Intrinsic Value

Fundamental analysis

Corporate Interviews

Research reports

QualitativeQuantitative


PORTFOLIO COMMENTSHOW WE CHOOSE OUR STOCKS

Source: Reuters StockVal, Nov. 23, 2009


PORTFOLIO COMMENTSHOW WE CHOOSE OUR STOCKS

Value BV Avg EPS P/E Value Div Value Price ReturnYr 1 Yr 2 ROE (%)

National Bank 31.89 5.97 6.63 39.53 17.00 6.72 10.8 72.58 2.48 77.54$ 62.02 25.02%Toronto-Dominion Bank 39.66 5.43 6.46 46.67 15.00 7.00 13.6 95.20 2.44 100.08$ 67.81 47.56%

Cons.

Projected Book Value = Current Book Value + consensus earnings - dividends

Normalized EPS = Proj BV x average ROE from past 10 years

Intrinsic Value = Normalized EPS x 10 year average P/E multiple + dividends

Outcome: In this case, we conclude that TD Bank is 48%

undervalued and National Bank is just 25% undervalued, thus more upside potential in TD.


Source: CIBC Global Asset Management Inc. as of October 31, 2009

PORTFOLIO COMMENTBALANCE OF CYCLICAL VS NON CYCLICAL

Renaissance Canadian Core Value Fund

Dec 2007 Sept 2008 Oct 2009 S&P/TSX

Natural Resources 35% 25% 34% 46%Energy 22% 17% 21% 25%

Materials 13% 8% 13% 21%

Economically Sensitive 3% 8% 11% 8%Industrials 1% 5% 5% 5%

Information Technology 2% 3% 6% 3%

Consumer Related 31% 32% 16% 12%Consumer Discretionary 12% 9% 4% 4%Consumer Staples 10% 12% 7% 3%Health Care 0% 0% 0% 1%

Telecom 9% 11% 5% 4%

Interest Sensitive 31% 35% 40% 33%Financials 30% 33% 34% 30%

Utilities 1% 2% 2% 1%


Renaissance Canadian Core Value FundTop 10 Holdings & Overweights - As at October 31, 2009

Top 10 Holdings

Company(%)

Royal Bank of Canada 8.0

Toronto Dominion Bank 7.1

Encana Corp. 6.4

Cdn. National Resources 5.4

Barrick 4.5

Bank of Nova Scotia 4.4

Franco Nevada Corp. 4.4

Suncor Energy 4.2

Bank of Montreal 4.2

Cdn. National Railway 4.1

Source: CIBC Global Asset Management Inc.

Top 10 Overweights

Company(%)

Franco Nevada Corp. 4.1

Empire Co. 3.3

Toronto Dominion Bank 2.7

Encana 2.6

Bell Aliant 2.4

Aastra Technologies 2.2

Canadian Natural Resources 2.2

CGI Group 2.1

Canadian National Railway 1.9

Celestica 1.9


MARKET COMMENTARY Key Conclusions

THE RECESSION IS ENDING

THE CONSENSUS IS FOR A WEAK, BUT POSITIVE ECONOMY IN 2010

THERE WILL BE DISAPPOINTMENTS AND CONCERNS ABOUT THE RECOVERY, BUT THE FEDERAL RESERVE STILL HAS ITS FOOT ON THE GAS PEDAL

IN OUR BALANCED PORTFOLIOS, WE HAVE MOVED FROM 35% EQUITIES IN MARCH 2009 TO 61% TODAY

OUR GOAL IS THE PROPER BALANCE BETWEEN THE POTENTIAL OF COMMODITY STOCKS AND OTHER CYCLICALS, AND THE SAFETY OF STAPLES, BANKS AND OTHER VALUE-ORIENTED STOCKS (WITH DIVIDENDS)

IN THE VALUE PORTFOLIOS, OUR MAIN OVERWEIGHTS ARE BANKS (5%), STAPLES (5%) AND TELCOS (3%)

THE MAIN UNDERWEIGHTS ARE FERTILIZERS (-4%) AND BASE METALS (-4%)

OUR GOAL IS TO PARTICIPATE IN ANY MARKET UPSIDE WHILE HOLDING NAMES THAT SHOULD PROTECT THE DOWNSIDE


MARKET COMMENTARYThe Key Issues

THE POSITIVES

Economic Indicators Have Turned Up

Strong Growth in Asia (China)

Interest Rates Are Low, Credit Is Easy

Consumer Confidence Is Improving

Corporate Profits Are Stronger Than In Past Recessions

Valuations Are Fair If Earnings Meet Expectations

Many Investors Have Been Skeptical Throughout The Entire Rally

Investors Still In Money Market Funds

THE CONCERNS

Job Growth and Consumer Spending

Will The Fed/Bank of Canada Tighten?

Will The Economic Rebound Fizzle & Need More Stimulus?

Can China Maintain Its Growth?

Strength/Weakness of $U.S.

Government Deficits and Taxes

Country Risk


MARKET COMMENTARYECONOMIC INDICATORS, EMPLOYMENT ARE IMPROVING

Source: Ned Davis Research, September 30, 2009

Time Before Job Growth


MARKET COMMENTARYLOW INTEREST RATES CONTINUE TO PROVIDE STIMULUS

Source: Ned Davis Research, September 30, 2009


MARKET COMMENTARYWHERE WILL SAVINGS RATE STABILIZE?


MARKET COMMENTARYECONOMIC OUTLOOK – WEAK BUT POSITIVE RECOVERY

Source: CIBC Economic Insights, October 27, 2009

Economists expect weaker growth following stimulus


MARKET COMMENTARYRISE IN INTEREST RATES EXPECTED TO BE MODEST

Source: CIBC Economic Insights, October 27, 2009


MARKET COMMENTARYPROFITS HELD IN THIS RECESSION – MORE ROOM TO HIRE

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

14

16

1970 1975 1980 1985 1990 1995 2000 2005

U.S.: Should we brace for another “job-loss” recovery?Profit margins of non-financial corporations and payroll jobs

%

* Before tax profits as a share of the gross value added of non-financial corporationsNBF Economy & Strategy (BEA data via Global Insight)

Payrolljobs

(quarterly change)

Profit margins*

The 2001 job-loss recoverywas due to unusually depressed profit margins…

…this is not the case this time

around

Source: National Bank Financial, Economic & Financial Outlook, September, 2009


MARKET COMMENTARYCHINA – STRONG CAPITAL SPENDING DRIVING COMMODITIES

Source: Ned Davis Research


Analyst Estimates 2009 2010

Dec 31, 2008 $840 $1005

Feb 28, 2009 $713 $872

Apr 30, 2009 $653 $812

Aug 31, 2009 $618 $789

Oct 30, 2009 $623 $790

Source: TD Newcrest, Investment Strategy, September 2, 2009

MARKET COMMENTARYTOP-DOWN & BOTTOM-UP ESTIMATES HAVE STABILIZED


MARKET COMMENTARYSTOCK VALUATIONS ARE IN NEUTRAL TERRITORY

Source: TD Newcrest Investment Strategy, September 2, 2009


MARKET COMMENTARYCOMMODITIES – OIL, GAS, COPPER, GOLD

Source: Reuters StockVal November 24, 2009

Oil

Gas

Copper

Gold


MARKET COMMENTARYBANKS FAIRLY VALUED BUT SOLID YIELDS

Source: Thomson One IM Estimates November 24, 2009

EPS P/E

Price 2009E 2010E 2011E 2010 2011 Yield

BMO $53.80 $4.20 $4.15 $5.11 12.96 10.53 5.22%

BNS $49.62 $3.57 $3.60 $4.45 13.78 11.15 3.96%

CM $68.88 $5.81 $5.78 $6.72 11.92 10.25 5.06%

NA $63.43 $6.31 $5.97 $6.63 10.62 9.57 3.91%

RY $58.09 $4.43 $4.37 $5.16 13.29 11.26 3.45%

TD $67.41 $5.35 $5.46 $6.45 12.35 10.45 3.62%

Totals 12.49 10.53 4.2%


MARKET COMMENTARYWHICH SECTORS LEAD AFTER A RECESSION?

Asset/Sector Performance in Period of U.S. Recession

6-M Before First Half 2nd Half 12-M AfterRecession of Recession of Recession Recession

S&P 500 -3% -10% 13% 8%

S&P 500 (C$) 1 -1% -9% 11% 10%S&P/TSX 0% -11% 10% 7%

DXY 2 3% 0% 1% 5%

USD-CAD 1 -1% 0% -1% -1%

S&P/TSX SectorsTechnology 1% -11% 11% 21%

Discretionary 3 -6% -10% 9% 21%

Staples 3 -1% -5% 10% 16%Metals-Mining 13% -16% 9% 11%Energy 6% -16% 11% 8%

Industrials 3 -3% -14% 10% 8%Financials -1% -7% 14% 7%Utilities 1% -7% 12% 4%Telecom -6% 0% 7% 3%Gold 7% 1% 15% -5%Recession and economic peak define by NBER (Recession: '61, '70, '75, '80, '82, '91 and '01).

1: Since 1971. 2: Since 1967

3: We use historical sub-industry performance as a proxy for the group prior to Dec. 1987.

Source: Scotia Capital, NBER

Average Performance Since 1960

Source: Scotia Strategic Edge Report, September 2009


MARKET COMMENTARYWHEN WILL INVESTORS SHIFT OUT OF MONEY MARKET?

U.S. Mutual Funds -- Money Market Assets As % of Total Assets (%)

Source: Scotia Capital, ICI

36%

43%

23%

36%

24%

47%

15%

20%

25%

30%

35%

40%

45%

50%1

98

6

198

8

199

0

199

2

199

4

199

6

199

8

200

0

200

2

200

4

200

6

Oct

-08

De

c-08

Feb

-09

Apr-

09

Jun-0

9

Aug

-09

Source: Scotia Strategic Edge Report, September 2009


CONCLUSIONS

WE BELIEVE THE GLOBAL ECONOMY IS PAST THE BOTTOM

THE KEY QUESTION IS WHETHER INVESTORS ARE EXPECTING TOO FAST A RECOVERY

THERE IS ROOM FOR A MARKET CORRECTION ON ANY DISAPPOINTING ECONOMIC OR EARNINGS NEWS, BUT WE DO NOT EXPECT IT TO BE MAJOR

OUR STRATEGY CONTINUES TO BE FOCUS ON STOCKS THAT SHOW THE BEST VALUE MAINTAIN A BALANCE OF CYCLICALS VS NON-CYCLICALS EMPHASIZE STOCKS THAT PAY DIVIDENDS AND CAN GROW THOSE DIVIDENDS


“This presentation is provided for general information purposes only and does not constitute investment advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. This information contained in this presentation has been obtained from sources believed to be reliable and is believed to be accurate at the time of publishing, but we do not represent that it is accurate or

complete and it should not be relied upon as such. All opinions and estimates expressed in this presentation are as of the date of publication unless otherwise indicated, and are subject to change. CIBC Global Asset Management Inc. uses multiple investment

styles for its various investment platforms. The views expressed in this document are the views of the Global Equity Team and may differ from the views of other teams. The material and/or its contents may not be reproduced or distributed without the express

written consent of CIBC Asset Management.”

©2008 CIBC Global Asset Management Inc. operates under the brand name of CIBC Asset Management and is a member of the CIBC Group of Companies.

"CIBC Securities Inc. is a wholly-owned subsidiary of CIBC and is the principal distributor of the CIBC Mutual Funds. Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. To obtain a copy of the CIBC Mutual Funds and CIBC Family of Managed Portfolios simplified prospectus, call CIBC Securities Inc. at 1-800-465-3863. Alternatively, you may obtain a copy from your advisor. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.

(tm) CIBC Asset Management and the CIBC logo are registered trademarks of Canadian Imperial Bank of Commerce."

Any Questions?

THANK YOU

CIBC Global Asset Management Inc. November 30, 2009 Now Is The Time To Buy Stocks - But Be Selective...

Documents

Transcript of CIBC Global Asset Management Inc. November 30, 2009 Now Is The Time To Buy Stocks - But Be Selective...