CI AsianDynasty Fund

2002 Annual Report as at December 31

The past three years have been the most challenging on global

markets in 50 years. What makes this more unsettling is that these

conditions follow a decade of unprecedented market growth.

So, for many investors, these markets may be a new experience.

In times like these, it is tough to stay focused on the long term.

However, history tells us that the markets will turn around and

resume their long-term upward trend, reflecting the ongoing

growth of companies and the overall economy.

In spite of the current market conditions, CI has taken steps to

ensure we continue to provide you with the investment options

you need. Here is what CI offers:

• Experience – CI has been providing investment products and

services since 1965. We manage over $30 billion on behalf of

more than 1.4 million Canadians.

• Choice – Whether you’re looking for Canadian or global equity

funds, fixed-income or balanced funds, they are all available

from CI. Our varied investment options include mutual funds,

segregated funds, tax-advantaged funds, RSP-eligible foreign

funds and the CI Portfolio Series.

• Expertise – Our wide range of investment funds is combined

with world-class portfolio managers like Gerry Coleman (named

Fund Manager of the Year at the 2001 Canadian Mutual Fund

Awards and manager of Harbour Fund, named Best Canadian

Equity Fund in 2002), Eric Bushell (manager of Signature

Dividend Fund, which was selected Best Dividend Fund in

2001 and 2002, and of Signature Select Canadian Fund, named

Best Canadian Equity Fund in 2001), and Bill Miller (named

Fund Manager of the Decade for the 1990s by Morningstar).

• Service – CI’s Client Services team can be reached toll-free at

1-800-563-5181 or by e-mail at service@cifunds.com. You can

also access your account through CI’s state-of-the-art website at

www.cifunds.com by clicking on My Account. In addition, our

site has a great deal of information about our funds and about

investing in general.

We know the markets are challenging, but our goals have never

changed – to provide you, through your adviser, with the products

and services you need to meet your financial goals.

Thank you for investing with CI Funds. We realize that it is a

privilege to manage your money. If you have any questions, please

contact your adviser or our Client Services Department.

Yours truly,

Peter W. Anderson

President,

CI Mutual Funds Inc.

February 1, 2003

A Message from the President

Most global equity markets ended 2002 down significantly: the

S&P 500 Index declined 23% (its worst loss since 1974), the DAX

in Germany fell a staggering 44% and Japan’s Nikkei closed at a

20-year low.

At face value, economic fundamentals do not justify the market

action of 2002. Overall global economic growth has been robust

and monetary policy has been relatively loose. We feel that the

turbulence indicates that a structural shift in the equity investment

climate is taking place with new longer-term trends about to be

established. This year may well be a watershed year in which

exciting opportunities abound.

The 1990s were a period of U.S. economic and political

domination, with its stocks trading at significant premiums. When

we look at the situation the country faces today, the U.S. premium

is baffling. The government’s fiscal situation, which looked

strong even in early 2002, has weakened further and faster than

anyone thought possible. The productivity gains that justified

continued investment by foreigners appear increasingly to be a

statistical myth.

Despite our bleak overall outlook, we continue to find a host

of exciting opportunities in the United States. The defence, energy

and health-care areas in particular offer compelling value. When

seeking short-sale positions for our hedge fund, we continue

to see considerable overvaluation in technology, finance and

consumer products.

Paradoxically, conditions in the rest of the world are hardly as grim

as the global equity markets would suggest. The Japanese market is

at 20-year lows despite new policies from the Bank of Japan. While

the country continues to have significant macroeconomic problems,

the clamour for action is growing. Compelling opportunities exist

in several of the larger, financially strong Japanese companies.

Remarkably, many of these stocks trade at multi-year lows with

lower valuations than distressed U.S. companies.

Europe is equally interesting. Continental Europe is challenged

by slowing growth, but has a trade surplus rather than a deficit. We

expect domestic growth to become a policy priority for the region

in 2003 and there is ample room for interest rate cuts. The region

presents excellent opportunities in domestic-oriented companies

such as banks and consumer goods.

With regard to the emerging markets, conditions are especially

attractive in Asia, where countries have worked through their

problems of the 1997 financial crisis and accumulated significant

trade surpluses. Here, too, domestic growth will be a policy priority

with the best opportunities in domestic-oriented companies.

Latin America, especially Brazil, continues to face significant

challenges. However, President Lula’s proposed steps for Brazil

give us some reason for optimism.

We believe 2003 will provide excellent opportunities for profitable

investments. It is likely that the European and Japanese equity

markets will decouple from the U.S., signalling a definitive end to

the reign of the global bear.

TRIDENT INVESTMENT MANAGEMENT, LLC

Nandu Narayanan

February 1, 2003

A Message from Trident Investment Management, LLC

P E R F O R M A N C EFund Objective:To achieve long-term capital growth by investing primarily in equitysecurities of companies based in the Asia-Pacific region.

Lead Manager:Nandu Narayanan

Adviser:Trident Investment Management, LLC†

(since October 2002)

Management Style:Top-down analysis of global macro-economic trends; bottom-up selectionof companies with the greatest growthpotential.

Fund Assets: $15.1 million

NAV per Unit:Class A Cdn $8.66Class F Cdn $8.39Class I Cdn $10.34

Inception: November 1993

RSP/RIF Eligible: 30%

Distribution: Capital gains and incomepaid annually

Management Expense Ratio:Class A 3.10%Class F 2.30%Class I 0.66%

Fund Code: CIGFront End DSC

Class A Cdn 7650 Cdn 7655Class F Cdn 7656 Cdn –Class I Cdn 7973 Cdn –

C I A s i a n D y n a s t y F u n d 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

$15,000

$10,000

$5,000

$8,907

Dec. '02Nov. '93 '97'96'94 '98 '99 '00 '01'95

Current Value of $10,000 Investment in Class A units

Class A Class F Class I1 year 2.2 3.1 5.43 years -10.9 N/A -8.65 years 4.7 N/A 7.3Since Inception -1.3 -7.9 -0.3

Class A Class F Class I2002 $ - $ - $ -

C$ NAV at December 31 each year:

Class A Class F Class I2002 $ x.xx $ x.xx $ x.xx

AT

A G

LAN

CE

H O L D I N G S & A L L O C AT I O N

Total Annual Distribution:Compound Annual Returns [%]

CI Asian Dynasty Fund(Formerly Spectrum Asian Dynasty Fund)

† Nothing herein should be read to constitute an offeror solicitation by Trident or its principal to provideinvestment advisory services to any person or entity.

New Zealand 1.6, India 0.8

Top 10 Equity Holdings [%]Nissan Motor Company Ltd.. . . . . . . . . . . . . . . . . . . [Japan, Consumer Discretionary] . . . . . . . . . . . . . . . . . . . . . . . . . 5.7Telekomunikasi Indonesia . . . . . . . . . . . . . . . . . . . . [Indonesia, Telecommunication Services] . . . . . . . . . . . . . . . . . 5.6Uni-Charm Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [Japan, Consumer Staples] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9Shiseido Company Ltd. . . . . . . . . . . . . . . . . . . . . . . . [Japan, Consumer Staples] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7Tokyo Gas Company Ltd. . . . . . . . . . . . . . . . . . . . . . . [Japan, Utilities] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6Honda Motor Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . [Japan, Consumer Discretionary] . . . . . . . . . . . . . . . . . . . . . . . . . 3.5Huaneng Power International Inc. . . . . . . . . . . . . . [China, Utilities] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3United Overseas Bank Ltd. . . . . . . . . . . . . . . . . . . . . [Singapore, Financials] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0SmarTone Telecommunications Holding Ltd. . . . . [HongKong, Telecommunication Services] . . . . . . . . . . . . . . . . . 2.4TCL International Holdings Ltd. . . . . . . . . . . . . . . . . [HongKong, Consumer Discretionary] . . . . . . . . . . . . . . . . . . . . . 2.3

Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.7Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3Repub. of China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9Cash & Equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9

Country Allocation [%]

The accompanying notes are an integral part of these financial statements.

CI Asian Dynasty FundStatements of Financial Highlights (for the periods ended December 31 and September 30 (Note 1))

C I A s i a n D y n a s t y F u n d 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

Net asset value per unit, beginning of period

Distribution per unit:

From net income

From net realized gain

Net income (loss) per unit

Net realized and unrealized appreciation

(depreciation) of investments per unit

Surplus (deficiency) of capital transactions

over original cost per unit (f)

Net asset value per unit, end of period

Ratios & Supplemental Data

Total return (%) (a)

Average net assets ($000’s) (b)

Management expense information (c)

Management expense ratio before absorption

of operating expenses (%)

Management and operating expenses (%)

Goods and services tax expenses (%)

Total management expense ratio (%)

Portfolio turnover rate (d)

Units Issued and Outstanding

Balance beginning of period

Units issued for cash including

re-invested distributions

Units redeemed

Balance end of period

Additional Fund Notes (in $000’s)

Brokerage Commissions

Net capital loss carried forward

Non-capital loss carried forward (e)

(a) Total return is the historical annualized rate of return of an investment for the period, assuming reinvestment of all distributions at net asset value.(b) Average net assets are calculated based on the daily net assets outstanding.(c) Management expense information is calculated based on expenses charged directly to the fund plus, if applicable, expenses of the underlying funds,

calculated on a weighted average basis based on the percentage weighting of each underlying fund, and is expressed as annualized percentage of average net assets for the period.(d) Portfolio turnover rate equals the lesser of purchases or sales divided by the average net assets of the fund.(e) Losses will expire within seven years.(f) For the years prior to 2002, the amount is included in Net realized and unrealized appreciation (depreciation) of investments per unit.

Inception dates for all classes, please refer to note 1 in the Notes to the Financial Statements.

Class A Class F Class IPeriod ended Years ended Period ended Year ended Period ended Years ended

Dec. 31 Sept. 30 Dec. 31 Sept. 30 Dec. 31 Sept. 30

2002 $ 2001 $ 2000 $ 1999 $ 1998 $ 2002 $ 2001 $ 2002 $ 2001 $ 2000 $ 1999 $ 1998 $

7.86 10.55 8.84 5.40 9.41 7.53 10.00 9.33 12.23 10.00 5.97 10.14

- - - - - - - - - - - -

- - - - - - - - - - - -

- - - - - - - - - - - -

(0.15) 0.06 (0.28) (0.09) (0.04) (0.05) 0.06 0.12 0.06 - 0.10 0.06

1.08 (2.75) 1.99 3.53 (3.97) 1.13 (2.53) 1.18 (2.96) 2.23 3.93 (4.23)

0.93 (2.69) 1.71 3.44 (4.01) 1.08 (2.47) 1.30 (2.90) 2.23 4.03 (4.17)

(0.13) - - - - (0.22) - (0.29) - - - -

8.66 7.86 10.55 8.84 5.40 8.39 7.53 10.34 9.33 12.23 10.00 5.97

8.05 (25.50) 19.34 63.70 (42.61) 9.02 - 11.07 (23.71) 22.30 67.50 (41.12)

13,743 18,811 27,099 10,644 9,263 1,609 8 4,180 7,326 7,000 4,000 4,000

3.10 3.18 3.13 3.56 5.72 2.30 2.15 0.66 0.67 0.69 1.12 2.04

2.90 2.83 2.93 2.65 2.67 2.15 1.83 0.62 0.53 0.64 0.40 0.36

0.20 0.20 0.20 0.19 0.19 0.15 0.13 0.04 0.04 0.05 0.03 0.03

3.10 3.03 3.13 2.84 2.86 2.30 1.96 0.66 0.57 0.69 0.43 0.39

1.20 1.24 1.01 1.40 0.76 1.20 1.24 1.20 1.24 1.01 1.40 0.76

1,821,854 2,310,520 1,000 - 691,575 635,497

1,302,375 399,380 297,897 1,000 52,168 453,637

(1,703,100) (888,046) (2,926) - (712,443) (397,559)

1,421,129 1,821,854 295,971 1,000 31,300 691,575

172 161

6,892

-

JAPAN (48.7%)3,000 Canon Inc. 141,179 177,524

5,600 Canon Inc., ADR 350,563 324,460

11,200 Credit Saison Company Ltd. 383,045 300,243

14 East Japan Railway Co. 101,011 109,162

2,000 Fanuc Ltd. 165,746 139,001

4,100 Fast Retailing Company Ltd. 173,127 226,876

9,000 Fujisawa Pharmaceutical Company Ltd. 344,520 323,476

6,600 Hitachi Maxell 160,476 126,165

3,000 Honda Motor Co. Ltd. 94,220 85,187

9,000 Honda Motor Company Ltd. 504,687 523,042

39 KDDI Corp. 194,132 198,772

24,000 Mitsui Sumitomo Insurance Co. Ltd. 187,940 173,474

7,000 Namco Ltd. 209,347 184,223

8,500 Nichicon Corp. 159,160 154,497

70,200 Nissan Motor Company Ltd. 795,346 860,553

16,800 Nissin Co 183,041 183,482

900 Orix Corp. 98,032 91,145

5,400 Right On Co. Ltd. 92,676 87,213

91 Saizeriya Co., Ltd. 3,997 2,118

9,900 Sega Corp. 356,596 153,338

35,000 Shiseido Company Ltd. 563,149 714,930

26,000 Sompo Japan Insurance Inc. 242,199 238,526

2,600 Sumitomo Real Estate Sales Company Ltd. 93,417 74,862

4,700 Takeda Chemical Industries Ltd. 322,125 308,609

141,000 Tokyo Gas Company Ltd. 545,841 694,371

11,800 Uni-Charm Corp. 532,760 735,753

4,200 United Arrows Ltd. 179,497 172,362

7,177,829 7,363,364HONG KONG (11.4%)

63,000 Citic Pacific Ltd. 221,588 182,906

81,500 CNOOC Ltd. 146,018 166,782

27,600 Dah Sing Financial Group 189,065 219,802

45,000 Hong Kong Electric Holdings Ltd. 270,531 267,645

210,500 SmarTone Telecommunications Holding Ltd. 369,323 369,230

737,500 TCL International Holdings Ltd. 320,158 353,143

32,000 YueYuen Industrial Hldgs 146,361 163,228

1,663,044 1,722,736AUSTRALIA (10.3%)

5,641 Amcor Ltd. 36,541 42,255

38,000 APN News & Media Ltd. 127,635 102,259

22,860 Australia & New Zealand Banking Group Ltd. 411,508 349,939

6,500 Commonwealth Bank of Australia 198,875 154,844

37,280 John Fairfax Holdings Ltd. 116,208 105,913

26,600 News Corporation Ltd. 296,671 269,426

12,746 News Corporation Ltd., Pfd. 137,793 107,397

89,100 TAB Ltd. 213,489 238,197

19,400 TABCORP Holdings Ltd. 165,163 182,292

1,703,883 1,552,522

No. of Shares/ Average MarketFace Amount Cost ($) Value ($)

CHINA (6.6%)688,000 Beijing Datang Power Generation Company Ltd. 386,689 350,248

400,000 China Oilfield Services Ltd. 158,991 153,228

392,000 Huaneng Power International Inc. 416,756 493,960

962,436 997,436

INDONESIA (5.6%)1,244,500 Telekomunikasi Indonesia 741,494 841,722

SINGAPORE (4.7%)26,000 DBS Group Holdings Ltd. 292,051 259,241

1,145 Haw Par Corporation Ltd. 3,637 3,383

42,000 United Overseas Bank Ltd. 485,986 449,230

781,674 711,854TAIWAN (3.6%)

326,100 China Steel Corp. 255,311 287,068

112,000 Chinatrust Financial Holding Company Ltd. 150,034 143,826

9,200 Fubon Financial Holding Co. Ltd. 123,956 118,614

529,301 549,508SOUTH KOREA (2.9%)

1,000 Hyundai Department Store Co., New Shares 38,291 25,320

250 Hyundai Department Store Company Ltd. 64,077 3,245

830 Pohang Iron & Steel Co. Ltd. 123,088 129,835

2,500 Posco 107,690 97,208

2,160 Samsung Fire & Marine INS 122,908 185,550

456,054 441,158THAILAND (1.9%)

22,300 BEC World PLC 200,071 165,841

22,800 PTT Expolration and Production Co. 91,893 118,027

291,964 283,868NEW ZEALAND (1.6%)

65,563 Telecom Corporation Of New Zealand Ltd. 228,389 244,787

INDIA (0.8%)11,275 ICICI Bank Ltd. 116,020 115,230

Total Investments (98.1%) 14,652,088 14,824,185

Other Assets (net) (1.9%) 291,548

Total Net Assets (100.0%) 15,115,733

No. of Shares/ Average MarketFace Amount Cost ($) Value ($)

C I A s i a n D y n a s t y F u n d 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

CI Asian Dynasty FundInvestment Portfolio (as at December 31, 2002)

The accompanying notes are an integral part of these financial statements. All common shares unless otherwise noted. Percentages shown in brackets relate investmentsat market value to total net assets of the fund.

Assets

Investments at market value (Note 2)

Cash

Receivable for unit subscriptions

Receivable for securities sold

Dividends and accrued interest receivable

Liabilities

Payable for unit redemptions

Accrued expenses

Net assets and unitholders’ equity

Net asset value per unit:

Class A

Class F

Class I

Number of units outstanding

Class A

Class F

Class I

Securities Lending (Note 5)

Loaned

Collateral

Income

Approved on behalf of the Board of Directors:

G. Raymond ChangDirector

William T. HollandDirector

C I A s i a n D y n a s t y F u n d 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

CI Asian Dynasty FundFinancial Statements

The accompanying notes are an integral part of these financial statements.

Income

Dividends

Interest

Less foreign withholding taxes

Expenses

Management fees (Note 4)

Administrative (Note 4)

Custody

Legal

Audit

Goods and services tax

Expenses borne by management company

Net income (loss) for the period

Realized and unrealized

gain (loss) on investments

Realized gain (loss) on investments (a)

Change in unrealized appreciation

(depreciation) of investments

Net gain (loss) on investments

Increase (decrease) in net assets

from operations

(a) Realized gain (loss) on investments

Proceeds from sale of investments including

foreign exchange gain (loss) (b) (c)

Investments at cost, beginning of period

Investments purchased

Change in cost of short-term notes held

Investments at cost, end of year

Cost of investments sold

Realized gain (loss) on investments

(b) Proceeds on sales of short-term

notes sold during the period

not included above

(c) Foreign exchange gain (loss)

included above

Statements of Operations for the periods ended December 31 andSeptember 30 (000’s)

Statements of Net Assets as at December 31 and September 30 (in 000’sexcept for per unit amounts and units outstanding)

Net assets, beginning of period

Capital Transactions

Proceeds from units issued

(including reinvested distributions)

Amounts paid for units redeemed

Distributions to investors

Distribution from net realized gains

Distribution from net income

Increase (decrease) in net assets

from operations

Net assets, end of period

Statements of Changes in Net Assets for the periods ended December 31 andSeptember 30 (000’s)

Dec. 31 Sept. 30

2002 $ 2001 $

14,824 19,657

300 998

2 -

- 83

5 85

15,131 20,823

15 17

- 37

15 54

15,116 20,769

8.66 7.86

8.39 7.53

10.34 9.33

1,421,129 1,821,854

295,971 1,000

31,300 691,575

766 -

820 -

- -

Dec. 31 Sept. 30

2002 $ 2001 $

459 799

22 22

(66) (53)

415 768

414 422

58 104

102 58

- 9

- 13

39 39

613 645

- (31)

613 614

(198) 154

1,219 (4,589)

1,168 (3,196)

2,387 (7,785)

2,189 (7,631)

36,497 37,037

20,653 29,734

29,277 32,545

- -

49,930 62,279

14,652 20,653

35,278 41,626

1,219 (4,589)

- -

(170) (125)

Dec. 31 Sept. 30

2002 $ 2001 $

20,769 32,146

14,232 7,841

(22,074) (11,587)

(7,842) (3,746)

- -

- -

- -

2,189 (7,631)

15,116 20,769

N o t e s t o t h e F i n a n c i a l S t a t e m e n t 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

Notes to the Financial Statement

1. THE FUNDS

The following CI Funds are open-ended mutual fund trusts created under the

laws of Ontario by declarations of trust:

Fund Names Dated

CI American Growth Fund September 1, 1967

CI American Growth RSP Fund December 2, 1999

CI American Value Fund May 27, 1957

CI Asian Dynasty Fund November 16, 1993

CI Canadian Asset Allocation Fund September 1, 1992

CI Canadian Equity Fund November 30, 1971

CI Canadian Investment Fund November 16, 1932

CI Canadian Small Cap Fund November 30, 1971

CI Canadian Stock Fund June 19, 1987

CI Diversified Fund June 19, 1987

CI Dividend Fund June 19, 1987

CI European Growth Fund February 28, 1995

CI European Growth RSP Fund September 11, 2000

CI International Bond RSP Fund January 22, 1993

CI Long-Term Bond Fund June 15, 1989

CI Mid-Term Bond Fund June 19, 1987

CI Short-Term Bond Fund May 31, 1976

CI TACTONICS Fund April 4, 2001

CI TACTONICS RSP Fund April 4, 2001

CI World Equity Fund September 6, 1990

CI Canadian Balanced Portfolio November 9, 1988

CI Canadian Conservative Portfolio December 1, 1997

CI Canadian Growth Portfolio December 1, 1997

CI Canadian Income Portfolio December 1, 1997

CI Canadian Maximum Growth Portfolio December 1, 1997

Sometimes referred to herein individually as “Fund”, and collectively as the “Funds”.

Each fund offers Class A, Class F and Class I units. Class A units were offered

to investors on the date of the formation of the Funds.

Class F units were offered to investors commencing on November 17, 2000

except for the following Funds:

Fund Names Inception Date of

Class F Units

CI TACTONICS Fund April 4, 2001

CI TACTONICS RSP Fund April 4, 2001

Class I units were offered to investors commencing on November 1, 1996

except for the following Funds:

Fund Names Inception Date of

Class I Units

CI Canadian Conservative Portfolio December 1, 1997

CI Growth Portfolio December 1, 1997

CI Canadian Income Portfolio December 1, 1997

CI Canadian Maximum Growth Portfolio December 1, 1997

CI American Growth RSP Fund December 13, 1999

CI European Growth RSP Fund September 11, 2000

CI TACTONICS Fund May 1, 2001

CI TACTONICS RSP Fund May 1, 2001

CI American Growth RSP Fund and CI European Growth RSP Fund current-

ly do not have any Class I units issued.

Class A units are available to all investors.

Class F units are available to certain investors including those who participate

in fee-based programs through their financial advisers or who are members of cer-

tain groups.

Class I units are available to institutional clients and investors who have entered

into a Class I Account Agreement with CI Mutual Fund Inc.

In 2002 the Funds’ fiscal year end was changed to December 31. As a result,

the financial statements as presented for the fiscal year 2002 are for the fifteen-

month period ended or as at December 31, 2002. All comparative information is

for the year ended or as at September 30, 2001 except for the statement of

financial highlights, which is for each of the years or periods (since inception) in

the four-year period ended September 30.

Comparative financial statement information for the year ended or as at

September 30, 2001 has been reclassified in accordance with the current

year basis.

Effective as of the close of business on October 11, 2002 the following funds

were merged.

Non-taxable Mergers

Terminated Fund Continuing Fund

Spectrum RRSP World Equity Fund CI TACTONICS RSP Fund

Taxable Mergers

Terminated Funds Continuing Funds

Spectrum Canadian Small-Mid Cap Fund CI Canadian Small Cap Fund

Spectrum Optimax USA Fund CI Amercian Value Fund

N o t e s t o t h e F i n a n c i a l S t a t e m e n t 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

Notes to the Financial Statement

The merger was effected by transferring the net assets of the terminated funds

in exchange for units of the continuing funds. The value of the units of the

continuing funds issued in connection with this merger was equal to the mar-

ket value of the net assets transferred from the terminated funds.

With respect to the non-taxable merger, the terminated and continuing fund

was deemed to have a taxation year end as at October 11, 2002. In accordance

with the Income Tax Act, all unrealized losses and certain unrealized gains of that

fund’s investment portfolio were deemed to be realized at October 11, 2002. All

tax losses available to that fund as at October 11, 2002 expired on that date.

These financial statements do not include the operating results of the terminated

funds prior to the merger date.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies of the Fund:

(a) Valuation of Investments

Mutual Funds are valued on each business day at their closing net asset

value. Listed securities are valued on each business day at their latest avail-

able sale price. In the absence of recorded sales on that day, they are valued

at the average of the last recorded bid and ask prices where appropriate.

Unlisted securities are valued on each business day based on price quota-

tions from recognized investment dealers, or failing that, management’s best

estimate. Short-term fixed income securities are valued at cost which,

together with accrued interest, approximates market value.

(b) Foreign Exchange

Foreign currency amounts are translated into Canadian dollars as follows:

market value of investments, forward currency contracts, other assets and

liabilities at the closing rate of exchange on each business day; income,

expenses and, purchases, sales and settlements of investments at the rate

of exchange prevailing on the respective dates of such transactions.

(c) Investment Transactions and Income Recognition

Investment transactions are accounted for on trade date and any realized

gains and losses from such transactions are calculated on an average cost

basis. Dividend income is recognized on the ex-dividend date and interest

income on the accrual basis. Stock dividends are recorded as dividend

income determined by reference to market value.

(d) Net Asset Value Per Unit

Net asset value per unit for each class is calculated at the end of each day

on which the Fund’s manager is open for business by dividing the net

assets of each class by its outstanding units.

The net asset value of each class is computed by calculating the value of

that class’s proportionate share of the Fund’s assets less that class’s

proportionate share of the Fund’s common liabilities and less class specific

liabilities. Expenses directly attributable to a class are charged to that class.

Other income and expenses are allocated to each class proportionately

based upon the relative net asset value of each class.

(e) Futures, Forward, Swap and Option Contracts

Futures, forward, swap and option contracts are valued on each business day

according to the gain or loss that would be realized if the contracts were

closed out, unless daily limits are in effect in which case they are valued

based on the current market value of the underlying interest. Any payments

made to satisfy initial and variation margin are reflected as a receivable

balance in daily variation margin on the Statement of Net Assets. Margin

consisting of assets other than cash is noted in the Statement of Investment

Portfolio. Gains or losses arising from futures, forward, swap and option con-

tracts which are held as hedges for capital investments are recorded as unre-

alized gains (losses) on investments until the contracts are closed or expire.

Gains or losses arising from futures, forward, swap and option contracts not

held as hedges for capital investments are recorded as income (loss) on a

daily basis.

3. INCOME TAXES

The Funds qualify as mutual fund trusts under the provisions of the Income Tax

Act (Canada) and, accordingly, are not subject to tax on net income, including

net realized capital gains for the taxation year, which is paid or payable to

unitholders at the end of the taxation year. However, such part of each Funds’

taxable income and net realized capital gains that is not so paid or payable will be

taxable to that Fund. Income tax on net realized capital gains not paid or payable

will be generally recoverable by virtue of refunding provisions contained in the

Income Tax Act (Canada) and provincial income tax legislation, as redemptions

occur. It is the intention of each Fund to pay all net taxable income and suffi-

cient net realized capital gains so that the Fund will not be subject to income tax.

Occasionally, a Fund may distribute more than it earns. This excess distribution

is a return of capital and is not taxable to unitholders. Derivative investments are

recorded in the same manner for tax purposes as for accounting purposes.

Net capital losses may be carried forward indefinitely to reduce future net realized

capital gains. Net capital loss amounts appear under “Additional Fund Notes” on

the Statements of Financial Highlights.

4. MANAGEMENT FEES AND OTHER EXPENSES

CI Mutual Funds Inc. is the manager of each Fund and, in consideration of

management fees received, provides management services required in the

day-to-day operations of the Funds including management of the investment

portfolio of the Funds.

The management fee is calculated on the net assets of each Fund at the end of

each business day and is paid daily.

Each Fund also bears all operating and administrative expenses including audit

and legal fees, registry and transfer agency fees, custody fees, expenses relating to

reporting and making distributions to unitholders, all other costs and fees imposed

by statute or regulation and expenses of all communications with unitholders.

To encourage large purchases in the Funds, the manager may reduce the

management fee that it would otherwise be entitled to receive from a Fund

with respect to an investment in a Fund provided that the amount of the

management fee reduction is distributed to the investor for whose benefit the

fees were reduced.

In order to reduce the effective MER’s of certain funds, some or all of the man-

agement fees and/or operating expenses may have been waived or absorbed by

the Manager. The total amount absorbed by the Manager is presented in the

Statement of Operations as “Expenses borne by management company.”

5. SECURITIES LENDING

Certain Funds have entered into a securities lending program with their custo-

dian, Royal Trust Company of Canada ("Royal Trust"). The aggregate market

value of all securities loaned by a Fund cannot exceed 50% of the assets of the

Fund. A Fund will receive collateral of at least 102% of the value of securities

on loan. Collateral will generally be comprised of cash and obligations of or

guaranteed by the Government of Canada or a province thereof, or by the

United States government or its agencies, but may include obligations of other

governments with appropriate credit ratings. Royal Trust has indemnified the

Funds against the credit risk of the borrowers. For those Funds participating in

the program, amounts for securities loaned, the collateral received, and the

income collected appear on the Statement of Net Assets and income from secu-

rities lending is included in "Interest Income" in the Statement of Operations.

6 . RELATED PARTY TRANSACTIONS

Sun Life Financial Services of Canada Inc. (“Sun Life”) owns a significant inter-

est in CI Mutual Funds Inc. and is therefore considered a related party to the

Funds. The following is a summary of the investments by Sun Life in the Funds

at December 31, 2002.

Fund Names Net Asset Value ($ooo’s)

CI TACTONICS Fund Class F 1,167

CI American Value Fund Class F 934

CI Asian Dynasty Fund Class F 294

CI Canadian Small Cap Fund Class F 177

CI TACTONICS RSP Fund Class F 47

7 . PORTFOLIO TRANSACTIONS

A copy of the Statement of Portfolio Transactions (unaudited) for any Fund

for the period ended December 31, 2002 is available without charge upon writ-

ten request to the manager, CI Mutual Funds Inc., CI Place, 151 Yonge Street,

Eleventh Floor, Toronto, Ontario M5C 2W7.

N o t e s t o t h e F i n a n c i a l S t a t e m e n t 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

Notes to the Financial Statement

MANAGEMENT’S RESPONSIBILITY

FOR FINANCIAL REPORTING

The accompanying financial statements have been prepared by CI Mutual

Funds Inc., the manager of the Funds, and approved by the Board of

Directors of the manager. The Funds’ manager is responsible for the infor-

mation and representations contained in these financial statements and

other sections of the Annual Report.

CI Mutual Funds Inc. maintains appropriate processes to ensure that

relevant and reliable financial information is produced. The financial

statements have been prepared in accordance with accounting principles

generally accepted in Canada and include certain amounts that are based

on estimates and judgments. The significant accounting policies which

management believes are appropriate for the Funds are described in Note 2

to the financial statements.

Deloitte & Touche LLP are the external auditors of the Funds, appointed

by the unitholders. They have audited the financial statements in

accordance with Canadian generally accepted auditing standards to enable

them to express to the unitholders their opinion on the financial state-

ments. Their report is set out at the right.

President Chief Financial Officer

CI MUTUAL FUNDS INC. CI MUTUAL FUNDS INC.

AUDITORS’ REPORTS

To the unitholders of each of the CI Funds (as defined in Note 1)

(“the Funds”):

We have audited the Investment Portfolio of each of the CI Funds as at

December 31, 2002, their Statements of Net Assets as at December 31,

2002 and September 30, 2001, their Statements of Operations and

Changes in Net Assets for the periods then ended and the Statements of

Financial Highlights for the period ended December 31, 2002 and each of

the years in the four-year period ended September 30, 2001. These finan-

cial statements are the responsibility of each of the Fund’s management.

Our responsibility is to express an opinion on these financial statements

based on our audits.

We conducted our audits in accordance with Canadian generally accepted

auditing standards. Those standards require that we plan and perform an

audit to obtain reasonable assurance whether the financial statements are

free from material misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used

and significant estimates made by management, as well as evaluating the

overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material

respects, the financial position of each of the CI Funds as at December 31,

2002 and September 30, 2001, the results of their operations and changes

in their net assets for the periods then ended and their financial highlights

for the period ended December 31, 2002 and each of the years in the

four-year period ended September 30, 2001 in accordance with Canadian

generally accepted accounting principles.

Toronto, Ontario DELOITTE & TOUCHE LLP

February 21, 2003 Chartered Accountants

M a n a g e m e n t a n d A u d i t R e p o r t s 2 0 0 2 A n n u a l R e p o r t a s a t D e c e m b e r 3 1 , 2 0 0 2

Management and Audit Reports

NOTICE: Should you require additional copies of this Annual Report or havereceived more than one copy, please contact CI Mutual Funds Inc. (the“Manager”) or your financial adviser.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus beforeinvesting. 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 perform-ance data assume reinvestment of all distributions or dividends and do not takeinto account sales, redemption, distribution or optional charges or income taxespayable by any securityholder that would have reduced returns. Mutual fundsare not guaranteed, their values change frequently and past performance maynot be repeated. Mutual fund securities are not covered by the Canada DepositInsurance Corporation or by any other government deposit insurer.

The commentaries contained herein are provided as a general source of information and should not be considered personal investment advice or anoffer or solicitation to buy or sell securities. Every effort has been made toensure that the material contained in these commentaries is accurate at thetime of publication. However, the Manager cannot guarantee its accuracy orcompleteness and accepts no responsibility for any loss arising from any use ofor reliance on the information contained herein.

SIMPLIFIED PROSPECTUS: The Simplified Prospectus and AnnualInformation Form of a Fund are renewed annually. The Manager would bepleased to provide, without charge, the most recent Simplified Prospectus uponrequest to its Toronto office.

DISTRIBUTION OR DIVIDEND REINVESTMENT: Distributions or dividends from the Funds are automatically reinvested, free of any sales commissions or charges, in additional securities of the relevant Fund, unlessyou otherwise direct. You may withdraw from participation in the reinvestmentplan at any time by delivering a written request to your financial adviser or tothe Manager.

REDEMPTION OF SECURITIES: Securities may be redeemed by security-holders on any business day by delivering to your financial adviser or the Managera redemption request in writing, or in such other form as permitted by yourfinancial adviser. If your redemption request is received by the Manager on anyValuation Date prior to 4:00 p.m. (Eastern time), then your securities beingredeemed will be priced at the next valuation time following receipt by theManager of the redemption request. If the proceeds of redemption exceed$10,000 or are to be paid to someone other than the registered owner, your signature must be guaranteed by a bank, trust company, investment dealer, orbroker. If certificates representing the securities to be redeemed have beenissued, the redemption request must be accompanied by the certificates, properly endorsed for redemption with the signature guaranteed in the mannerdescribed above. If the registered owner is a corporation, partnership, agent,fiduciary or surviving joint owner, additional documentation may be required.

®Boomernomics, Harbour Funds, CI Funds, the CI Funds logo design, BPIFunds, CI Sector Funds and Global Managers are registered trade marks of CI Mutual Funds Inc. ™Landmark Funds, Signature Funds and AmericanManagers are trademarks of CI Mutual Funds Inc.

Board of Governors’ Letter

Legal Notice

Your CI Funds’ Board of Governors is pleased to report on its activities inrespect of the year ended December 31, 2002. The Governors are appointedpursuant to the Declarations of Trust governing the Funds that are trusts, andconstitute the board of directors of CI Sector Fund Limited.

The Governors’ mandate is to consult with CI Mutual Funds Inc. (the “Manager”) and any investment advisers (referred to as “Subadvisers”) in matters pertaining to investment policy; receive and review periodic reports concerning the investment of the Funds’ assets, the issue and redemption of securities and distributions to securityholders; and to review and advise or consent, if appropriate, with respect to any other matter required by theDeclarations of Trust and by applicable securities laws, regulations and rules. The Governors met quarterly.

The Governors have reviewed, commented on and approved the CI Code ofEthics and Conduct, which establishes rules of conduct designed to ensure fairtreatment of the Funds’ securityholders and that, at all times, the interests of thethe Funds and their securityholders are placed above personal interests of employees, officers and directors of the Manager and each of its subsidiaries and affiliates, the Subadvisers, and the Governors, through the application ofthe highest standards of integrity and ethical business conduct. The objectiveis not only to remove any potential for real conflict of interest but to avoid any perception of conflict.

The independent Governors report that management has been open and cooperative, permitting the Governors to meet with Subadvisers, to meet withindividual department heads and personnel to review control mechanisms andcompliance procedures, including those relating to the personal securities

trading activity of employees, and to consider other matters that affect theFunds, such as customer complaints. The personal trading rules under the CI Code of Ethics and Conduct require prior clearance of personal trades andrestrict the ability of staff to trade any securities held by the Funds. The three independent Governors comprise the Audit Committee of the Boardof Governors. The Audit Committee independently reviewed, with the Fund’s auditors, the planning, scope and results of the audit of the financial statementsof the Funds for the year 2002, and reported to the Board of Governors. The Board of Governors has received and accepted the 2002 Annual Reports of the Funds.

The Manager's year 2002 report on compliance with the CI Code of Ethics andConduct has been provided to the Governors in a timely and satisfactory manner.

Stephen T. MooreCHAIR, CI FUNDS BOARD OF GOVERNORS

March 6, 2003

Members of the Board of GovernorsStephen T. Moore, ChairJasmine HerltThomas L. JarmaiPeter W. Anderson, President, CI Mutual Funds Inc. (commencing February 2003)

Head OfficeCI Place, 151 Yonge Street, Eleventh FloorToronto, Ontario M5C 2W7Tel: 416-364-1145Toll Free: 1-800-268-9374Client Services Team: 1-888-771-2999

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