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THE TIMES THEY ARE A-CHANGIN

David Picton, President,

Picton Mahoney Asset Management

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INTRODUCTION TO PICTON MAHONEY

Portfolio management boutique managing $7.0 billion in assets for investors through three lines of business

Authentic hedge fund strategies

Sub-advisory services

Institutional long-only mandates

We remain committed to our founding principles:

Authenticity

Transparency

Capacity

THERE IS A REASON THE MARKETS HAVE BEEN SO CHALLENGING OVER THE PAST FIVE YEARS

History shows that big bull markets are usually followed by big consolidation phases

These great reckoning phases are never pleasant and usually squeeze excesses from the system, setting the stage for the next bull market

PORTFOLIO CONSTRUCTION IS EXTREMELY DIFFICULT IN TODAYS ENVIRONMENT

Consider how lacking the traditional tools are for savers today

(Not to mention, the general aversion to risk many investors have post the 2008 collapse)

INCOME INVESTORS HAVE BENEFITTED DISPROPORTIONATELY FROM FALLING INTEREST RATES

We are very concerned that conservative investors are not prepared for potential volatility/losses that these types of investments could face once interest rates normalize

Source: Corporate Reports, National Bureau of Economic Research, Empirical Research Partners Analysis

A CAUTIONARY TALE FOR INCOME INVESTORS

Rate Risk 1994: The great bond massacre

Today if rates increase 1%, 5-year Government bonds should lose $5 and 10-year Government bonds should lose $9

Source: Bloomberg, Bank of America Merrill Lynch

WE BELIEVE THAT MOST INVESTOR PORTFOLIOS, (ESPECIALLY IN CANADA), ARE POORLY CONSTRUCTED

Too much cash that has no chance of upside or inflation protection

Concentrated in interest rate related vehicles that are trading at excessive valuations

Lack foreign content (especially U.S. growth stocks)

Disproportionately exposed to resource stocks and banks given that makeup of the Canadian benchmarks

Potential problems with portfolios

WHAT IF QUESTIONS INVESTORS NEED TO ASK THEMSELVES REGARDING THEIR PORTFOLIO

What if stock markets continue to rally?

What if interest rates continue to rise/normalize?

What if stock/sector leadership change continues?

If you dont like the answers you are getting to these questions then it is time to reconsider your positioning and/or the investment tools you are using to build your portfolio

The times they are a-changin

Investment outlook

THE CASE FOR ECONOMIC ACCELERATION IN 2014

Many former headwinds are becoming (or should soon become) tailwinds to the economy

STRENGTHSTABILITYWEAKNESSU.S.Wealth effectHousingCredit cycleCorporate CAPEX/ manufacturing renaissanceFiscal dragJAPANEUROPEBRICS??

We are in both

U.S. OUTLOOK IS IMPROVING

Rise in home prices and stock have added almost $9 trillion of wealth

Source: J.P Morgan Chase

HOUSING IS STRONG AND AN INTEREST RATE SPIKE RISK IS OVERSTATED

Source: NAR, MBA, Zelman & Associates analysis

JOBS STILL TO COME FROM HOUSING

Each 250,000 Of U.S. Housing Starts adds one million new jobs and $4 to S&P 500 EPS

Source: Bloomberg

CAPEX STILL LANGUISHES THE $2 TRILLION CASH HOARD

A lack of faith in politicians and more specifically, the fiscal circus in the U.S., may be the only thing that stands between the deployment of cash and a CapEx Supercycle

Source: Credit Suisse, ISI Group

U.S. FISCAL DRAG IS PEAKING

Source: Goldman Sachs

EUROPE IS PULLING OUT OF RECESSION

Europe is coming out of the recession led by Germany and France. The fiscal drag from the austerity measures (-1.6% of GDP in 2012, -1% in 2013, and a projected 0.6% in 2014) are diminishing

Source: Eurostat, national statistics office, JP Morgan

JAPAN WHERE INFLATION IS WELCOMED!

Japan has finally decided to tackle its decade long deflationary recession problem

Japans new prime minister, Shinzo Abe, has embarked on a massive fiscal & monetary stimulus plan, dubbed Abenomics

The monetary aspect is aimed at reducing real interest rates and weakening the Yen

Japanese stocks tend to outperform when the Yen depreciates

Source: Bloomberg

JAPANESE EQUITIES: EARNINGS ARE IMPROVING AND VALUATIONS REMAIN ATTRACTIVE

The weaker Yen has translated into better earnings expectations for Japanese companies

Despite the rally, Japanese equity still has lots of room to run

CHINA IS A WILDCARD

Source: Bloomberg, PMAM Research

CHINAS GROWTH OVER NEXT DECADE(S) LIKELY TO BE LED BY CONSUMPTION

A 1% Increase in Chinas consumption to GDP is equivalent to $73 billion (USD) of incremental spending

Source: Bloomberg

CHINA: GROWTH COMPANIES WILL CONTINUE TO BE SOUGHT AFTER IN A LOW GROWTH ENVIRONMENT

Source: Bloomberg, MSCI

Despite the negatively regarding China/EM, Chinese small/mid cap stocks (as represented by ChiNext) has massively outperformed this year. Investors are buying the new growth companies focused on the consumer rather than the large cap growth companies of the past (predominately state owned materials/energy/financials/industrials)

STOCKS REMAIN ATTRACTIVE: EQUITY YIELDS ARE SUPERIOR TO BOND YIELD

Source: Bloomberg

SHORT-TERM STOCK MARKET WEAKNESS WOULD BE TYPICAL, AND SHOULD BE BOUGHT

Source: Bloomberg / PMAM Research

CORPORATE CASH SHOULD LEAD A BOOM IN M&A

Current M&A activity rests at more than half of 10 year averages. This suggests that the markets may be in the very early stages of a market rise with a good deal of potential going forward

Source: Bloomberg

INFLATION RISKS MAY BE OVERSTATED, WHICH COULD BE GOOD FOR DEVELOPING ECONOMIES AND P/E RATIOS

Lower inflation has paved the way for better economic data

Decoupling from China allows for the return of non-inflationary growth

SLEEPLESS NIGHTS

There are numerous questions that keep us up at night including:

Are we underestimating the tail risks on BOTH sides?

Has Fed policy so distorted the market pricing mechanism that it is fostering risk seeking behaviour reminiscent of the pre-crisis period?

Do investors understand that they take inordinate amount of risk in the bond market and not enough in the equity market?

Will politicians keep watching financing costs fall while doing nothing to get to the heart of the issues?

Will a healthy balance between monetary and fiscal/political policy be struck in time?

ARE YOUR PORTFOLIOS READY?

Source: Bloomberg

ARE YOUR PORTFOLIOS READY?

Source: Bloomberg

PMAMS PORTFOLIO STRUCTURE

SYNERGY CANADIAN CORPORATE CLASS SECTOR EXPOSURE: AS AT AUGUST 30, 2013

SYNERGY GLOBAL CORPORATE CLASS SECTOR EXPOSURE: AS AT AUGUST 30, 2013

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise indicated and except for returns for periods less than one year, the indicated rates of return are the historical annual compounded total returns including changes in security value. All performance data assume reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

CI Investments, the CI Investments design, Synergy Mutual Funds, are registered trademarks of CI Investments Inc.

Thank YouFOR ADVISOR USE ONLY

2202002000

U.S. Stock Market

CAR=14.9%CAR=12.3%CAR=23.0%20 Years20 Years25 Years30 Years???

0.2 0.4 0.6 0.8 1.0 1.2 1.4 195519601965197019751980198519901995200020052010

Large-Cap Stocks: Highest Quintile of Dividend YieldRelative Trailing-P/E Ratios

Average

(30.0%)(25.0%)(20.0%)(15.0%)(10.0%)(5.0%)0.0%5.0%10.0%5.00%5.50%6.00%6.50%7.00%7.50%8.00%8.50%9.00%

Jan-94Feb-94Mar-94Apr-94May-94Jun-94Jul-94Aug-94Sep-94Oct-94Nov-94Dec-94

Indicative % Loss on 10 Yr% Yield

10 Yr Long Bond YieldIndicative % Loss on 10 Yr

39%46%43%35%36%32%27%27%27%27%26%25%24%22%24%23%22%22%21%21%23%22%22%22%23%25%26%24%20%16%16%15%14%14%17%22%23%

00.050.10.150.20.250.30.350.40.450.5

Monthly Principal & Interest on a 30-Year FRM as % of Income

4006008001000120014001600180020002200240001020304050607080

Homebuilders' Sentiment Points To Much Higher Starts

NAHB Housing Market Survey (6m lead, ls)Housing Starts (rs)

Long-termaverage = 1,470Correlation = 96%

1.12.91.9-1.0-0.4

-5-4-3-2-1012341Q122Q123Q124Q121Q132Q13

GDP Growth (% q/q)

Level of Euro area real GDP (% q/q saar)

GermanyFranceEuroSpainItaly

0.30.350.40.450.50.550.60.650.70.750.865758595105115125135

20002001200220032004200520062007200820092010201120122013

Relative Performance of Japan to World vs. USDJPY

USDJPYMSCI Japan / MSCI World

30%35%40%45%50%55%60%65%70%75%80%

19951996199719981999200020012002200320042005200620072008200920102011

Consumption, Share of GDP

ChinaUnited States

5606607608609601060116018002000220024002600280030003200340036003800

ChiNext Comp Index Price LevelShanghai SE Comp Index Price Level

ChiNext Comp vs Shanghai SE Comp -2013 YTD

Shanghai SE CompIndexChiNext Comp Index

+53%-7%

234567891011

Corporate Bond and Equity Yield

S&P 500 Current Earnings YieldIG Corporate Bond Yield

7580859095100105110

-12-11-10-9-8-7-6-5-4-3-2-10123456789101112

S&P500 PerformanceMonths Before/After Peak in S&P 500S&P 500 Around Year/Year Declines in Long-Term Bonds of at Least 15%Current (Zero = 8/2/2013)

50060070080090010001100

1966-1982

DJIA performance over 1966-1982

50007000900011000130001500050060070080090010001100

1998-Present1966-1982

Dow Jones Industrial Average Index

1966-19821998-Present

GICS sectorSynergy GlobalMSCI World $CDifference

Financials28.5%34.4%-5.9%

Energy16.8%24.9%-8.1%

Materials7.8%13.8%-6.0%

Industrials9.5%6.9%2.6%

Consumer Discretionary11.2%5.5%5.8%

Telecom Services2.7%5.0%-2.2%

Consumer Staples4.6%3.2%1.5%

Health Care6.0%3.0%3.0%

Utilities1.3%1.8%-0.5%

Information Technology7.9%1.6%6.3%

Cash & other3.6%0.0%3.6%

Total100.0%100.0%

6109Performance Attribution - Summary6109all Daily (Total Return) vs. MSCI World Daily (Total Return)11 Groups of GICS Sector - as at 08/30/2013Base Currency : Dollar($) - Canada6109msworld indexGroup31-Aug-1331-Aug-13WeightWeightFinancials23.6520.77Information Technology13.1811.81Consumer Discretionary13.0912.06Industrials11.8811.09Health Care9.8711.30Energy8.389.84Consumer Staples6.5110.34Materials4.865.78Telecom Services3.223.70Utilities2.703.31Other Assets2.670.00Total100.00100.00GICS sectorSynergy GlobalMSCI World $CDifferenceFinancials23.6%20.8%2.9%Information Technology13.2%11.8%1.4%Consumer Discretionary13.1%12.1%1.0%Industrials11.9%11.1%0.8%Health Care9.9%11.3%-1.4%Energy8.4%9.8%-1.5%Consumer Staples6.5%10.3%-3.8%Materials4.9%5.8%-0.9%Telecom Services3.2%3.7%-0.5%Utilities2.7%3.3%-0.6%Other Assets2.7%0.0%2.7%Total100.0%100.0%

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6103Performance Attribution - SummarySynergy Cdn Corp Cl Daily (Total Return) vs. S&P TSX Composite Index Daily (Total Return)11 Groups of GICS Sector 08/30/2013 - 09/16/2013Base Currency : Dollar($) - Canada6103sptsx indexGroup31-Aug-1331-Aug-13WeightWeightFinancials28.4734.37Energy16.8024.90Materials7.8213.80Industrials9.496.92Consumer Discretionary11.235.47Telecom Services2.734.98Consumer Staples4.643.17Health Care5.983.02Utilities1.271.80Information Technology7.931.59Other Assets3.650.00Total100.00100.00GICS sectorSynergy GlobalMSCI World $CDifferenceFinancials28.5%34.4%-5.9%Energy16.8%24.9%-8.1%Materials7.8%13.8%-6.0%Industrials9.5%6.9%2.6%Consumer Discretionary11.2%5.5%5.8%Telecom Services2.7%5.0%-2.2%Consumer Staples4.6%3.2%1.5%Health Care6.0%3.0%3.0%Utilities1.3%1.8%-0.5%Information Technology7.9%1.6%6.3%Cash & other3.6%0.0%3.6%Total100.0%100.0%

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GICS sectorSynergy GlobalMSCI World $CDifference

Financials23.6%20.8%2.9%

Information Technology13.2%11.8%1.4%

Consumer Discretionary13.1%12.1%1.0%

Industrials11.9%11.1%0.8%

Health Care9.9%11.3%-1.4%

Energy8.4%9.8%-1.5%

Consumer Staples6.5%10.3%-3.8%

Materials4.9%5.8%-0.9%

Telecom Services3.2%3.7%-0.5%

Utilities2.7%3.3%-0.6%

Cash & other2.7%0.0%2.7%

Total100.0%100.0%

6109Performance Attribution - Summary6109all Daily (Total Return) vs. MSCI World Daily (Total Return)11 Groups of GICS Sector - as at 08/30/2013Base Currency : Dollar($) - Canada6109msworld indexGroup31-Aug-1331-Aug-13WeightWeightFinancials23.6520.77Information Technology13.1811.81Consumer Discretionary13.0912.06Industrials11.8811.09Health Care9.8711.30Energy8.389.84Consumer Staples6.5110.34Materials4.865.78Telecom Services3.223.70Utilities2.703.31Other Assets2.670.00Total100.00100.00GICS sectorSynergy GlobalMSCI World $CDifferenceFinancials23.6%20.8%2.9%Information Technology13.2%11.8%1.4%Consumer Discretionary13.1%12.1%1.0%Industrials11.9%11.1%0.8%Health Care9.9%11.3%-1.4%Energy8.4%9.8%-1.5%Consumer Staples6.5%10.3%-3.8%Materials4.9%5.8%-0.9%Telecom Services3.2%3.7%-0.5%Utilities2.7%3.3%-0.6%Cash & other2.7%0.0%2.7%Total100.0%100.0%

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6103Performance Attribution - SummarySynergy Cdn Corp Cl Daily (Total Return) vs. S&P TSX Composite Index Daily (Total Return)11 Groups of GICS Sector 08/30/2013 - 09/16/2013Base Currency : Dollar($) - Canada6103sptsx indexGroup31-Aug-1331-Aug-13WeightWeightFinancials28.4734.37Energy16.8024.90Consumer Discretionary11.235.47Industrials9.496.92Information Technology7.931.59Materials7.8213.80Health Care5.983.02Consumer Staples4.643.17Other Assets3.650.00Telecom Services2.734.98Utilities1.271.80Total100.00100.00

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